Pacific Edge Limited · NZX:PEB
Pacific Edge — H1 2023 Earnings Presentation
34 slides from Pacific Edge's earnings presentation, Nov 24, 2022
Slide 1: 1H FY23 Investor Presentation
PACIFIC EDGE 1H FY 23 Investor Presentation 24 November 2022
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Important Notice statements, by their very nature, involve inherent risks and Investment risk This presentation has been prepared by Pacific Edge Limited (PEL) solely uncertainties. Many of those risks and uncertainties are matters which An investment in securities of
Slide 3: Presenters: Dr Peter Meintjes and Grant Gibson
DR PETER MEINTJES GRANT GIBSON Chief Executive Officer Chief Financial Officer
Slide 4: Agenda
AGENDA 1. 1H FY 23 HIGHLIGHTS 2. PACIFIC EDGE SNAPSHOT 3. DELIVERING ON STRATEGY 4. FINANCIAL RESULTS DETAIL 5. OUTLOOK
Slide 5: 1H FY23 Highlights: Building Momentum Despite CMS Uncertainty
1H FY23 HIGHLIGHTS: BUILDING MOMENTUM DESPITE CMS UNCERTAINTY 34%1 35% 62% ($10.6M) $93.5M GLOBAL TESTING COMMERCIAL GROWTH IN NET LOSS AFTER CASH, CASH VOLUMES TEST VOLUMES OPERATING TAX EQUIVALENTS3 (TLT2) on 1H22 on 1H22 REVENUE on 1H22 Global TLT of 14,917 Commercial Tests of 12,422 Operating re
Slide 6: Pacific Edge at a Glance: Growing Globally
PACIFIC EDGE AT A GLANCE: GROWING GLOBALLY FROM IP DEVELOPMENT TO PATIENT • IP: 4x patent families in bladder cancer, with >80 patents including RNA biomarkers and their analysis algorithms • Cxbladder: Advanced genomic biomarker tests from a non-invasive urine CANADA sample for the early detection
Slide 7: Cxbladder in the Patient Care Pathway
CXBLADDER IN THE PATIENT CARE PATHWAY VALUE PROPOSITION Cxbladder Cxbladder Cxbladder TRIAGE DETECT MONITOR Typical Primary Care Physician Urologist Urologist (CxbT) (CxbD) (CxbM) standard of Patient presents with Current guidelines for Monitor for recurrence hematuria and clinician hematuria evalua
Slide 8: Bladder Cancer Is a Significant Global Healthcare Challenge
BLADDER CANCER IS A SIGNIFICANT GLOBAL HEALTHCARE CHALLENGE ~550K ~200K 6TH ~70% Annual cases Annual Most common Recurrence and growing1 deaths1 cancer in men1 • Hematuria evaluation for suspected urothelial cancer has high detection and surveillance costs2 • Current American Urological Association
Slide 9: Our Investment Program for Growth
OUR INVESTMENT PROGRAM FOR GROWTH INPUTS OUTPUTS ADOPTION, RETENTION AND EXCELLENT PATIENT EXPERIENCE OUR PEOPLE REVENUE AND ACCURATE RESULTS GENERATION EARLY DETECTION AND Mission OUR PROCESSES Vision CLINICALLY ACTIONABLE CARE To help improve A world where the early lives and patient diagnosis and
Slide 10: Global: Commercial Tests Growing Strongly as US Accelerates
GLOBAL: COMMERCIAL TESTS GROWING STRONGLY AS US ACCELERATES PEL: Global Testing Volumes (TLT*) 25,000 23,086 Total Lab Throughput (TLT) has increased 34% to 14,917 tests in 1H23 20,000 16,861 15,814 11,950 • US market driving growth in commercial test volumes with new hires 15,000 ▲ TESTS 8,714 34%
Slide 11: Strong Growth in the US: Pacific Edge's Largest Market
STRONG GROWTH IN THE US: PACIFIC EDGE’S LARGEST MARKET KEY US PAYORS ACTIVATED USA test volumes1 • The Kaiser Health Plan covers over 12.5m members, with 83% of TLT in 1H23 performed in the USA >85% of those members in California • 2 Kaiser accounts in PEB’s Top 20 Accounts. 11 Kaiser 20,000 18,864
Slide 12: Investments Already Driving US Adoption and Retention: Physicians
INVESTMENTS ALREADY DRIVING US ADOPTION AND RETENTION Unique physicians ordering Cxbladder 1200 ▲ 46% 1000 CAGR 979 894 782 800 740 689 657 PHYSICIANS 600 516 530 462 400 200 Distribution of Current U.S. Customers Pacific Edge Diagnostics 0 USA, Hershey, Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY
Slide 13: Investments Already Driving US Adoption and Retention
INVESTMENTS ALREADY DRIVING US ADOPTION AND RETENTION Prudent implementation of May 2022 investment program* COMMERCIAL DEPARTMENT HIRING PLAN DIRECT SALES AND MARKETING Sales - Account Executives, Regional Sales Directors, National Accounts & Virtual Sales (contractors) [+9] Marketing and Sales Sup
Slide 14: Building the Cxbladder Brand with Clinicians and Healthcare Providers
BUILDING THE CXBLADDER BRAND WITH CLINICIANS AND HEALTHCARE PROVIDERS TARGET US RELATIONSHIPS AUA Annual Meeting, New Orleans May 2022 Largest and most prestigious event in the global 50 urological calendar Urology • Sponsorship of International Bladder Cancer conferences Group Expert Forum, VA sess
Slide 15: APAC: New Zealand at the Forefront with Adoption by Primary Care
APAC: NEW ZEALAND AT THE FOREFRONT WITH ADOPTION BY PRIMARY CARE APAC QUARTERLY TEST VOLUMES1 Commercial tests represent 84% of TLT in 1H23 for APAC 4,500 4,000 3,500 2,069 3,000 2,016 Test volumes 1,725 2,500 (0.2%) 2,000 ▼ 1,500 1,000 1,940 2,153 2,148 1,896 500 - FY20 FY21 FY22 FY23 1H 2H • Volum
Slide 16: Medicare Coverage Update
MEDICARE COVERAGE UPDATE Novitas Proposed LCD (released on July 28, 2022 in the USA) 1. Outlines a new methodology for covering molecular biomarker tests 2. Mentions codes for Cxbladder Detect and Monitor as ‘not covered’ 3. If adopted Pacific Edge will receive 45 days' notice of its effect CMS dele
Slide 17: Global Guidelines Pivotal to the Widespread Adoption of Cxbladder
GLOBAL GUIDELINES PIVOTAL TO THE WIDESPREAD ADOPTION OF CXBLADDER Recognition in national guidelines deepens and accelerates commercial use of Cxbladder tests and entrenches coverage by nationally relevant healthcare institutions. • Most influential and largest • Leading urologic authority in Europe
Slide 18: Clinical Evidence Generation Towards Guideline Inclusion (1/2)
CLINICAL EVIDENCE GENERATION TOWARDS GUIDELINE INCLUSION (1/2) STUDY AIM LOCATIONS ENROLLED SITES* STATUS** US Primary Prospective, single-arm, observational study to develop clinical evidence for USA 12/12 - Enrolment complete Study Cxbladder tests, accurate risk stratification, intensifying or de-
Slide 19: Clinical Evidence Generation Towards Guideline Inclusion (2/2)
CLINICAL EVIDENCE GENERATION TOWARDS GUIDELINE INCLUSION (2/2) STUDY AIM LOCATIONS ENROLLED STATUS** SITES* DEDUCT DEtection of Disease in the Upper traCT USA 1/3 - One site is open for this pilot Prospective, single-arm, observational study to validate performance of Cxbladder for the study and the
Slide 20: Investigator Initiated Trials – Supplementing Our Evidence Program
INVESTIGATOR INITIATED TRIALS – SUPPLEMENTING OUR EVIDENCE PROGRAM What are Investigator Initiated Trials? • Investigator Initiated Studies (IITs) are proposed by investigators and supported by Pacific Edge • IITs typically provide clinical utility evidence at modest scale • They promote familiarity
Slide 21: Research and Innovation
RESEARCH AND INNOVATION Christchurch Hospital DRIVING IP TO TECHNOLOGY • Evaluate ‘product concepts’ to address unmet clinical needs • +2 scientists to explore market potential of various product concepts including: • Prognostics or companion diagnostics in urology • Adjacent disease (with molecular
Slide 22: Financial Results: Overview
FINANCIAL RESULTS: OVERVIEW ; S| PACIFIC EDGE Cbiadder — |x
Slide 23: US Test Commercial Test Volume Growth and FX Driving Revenues
US TEST COMMERCIAL TEST VOLUME GROWTH AND FX DRIVING REVENUES Pacific Edge Operating Revenue Regional Revenue Split $14,000 5% $11,445 $12,000 $10,000 $7,701 1H23 ▲ $8,000 $6,067 62% $(000) $4,370 95% $6,000 $3,817 $3,400 $4,375 $8,707 USA APAC $4,000 $2,085 $1,784 $5,378 $1,975 $2,000 7% $3,326 $2,
Slide 24: US Test Volume Growth and FX Gains Lift Revenue
US TEST VOLUME GROWTH AND FX GAINS LIFT REVENUE STRONG BALANCE SHEET SUPPORTS GROWTH INVESTMENTS • Total income lifted by increase in interest Half year to 30 September 2022 2021 Variance Change income and FX gains on mark to market of US cash balances (~$3.0m) $000 $000 $000 % • Expense rise lifted
Slide 25: Operating Costs Rise as Investment for Growth Continues
OPERATING COSTS RISE AS INVESTMENT FOR GROWTH CONTINUES INVESTING IN FY23 TO DELIVER IN FY24 Operating Expenses 2022 2021 Variance Change Half year to 30 September $000 $000 $000 % • Investment in people accounted for ~56% Laboratory operations $4,467 $3,076 $1,391 45% of the uplift in expenses (hea
Slide 26: Outlook
OUTLOOK • Cautious optimism for the final four months of FY23 as we continue to implement our strategy recognizing the potential for disruption • We are delivering growth in line with our expectations and investing prudently • The proposed Novitas LCD has not impacted commercial or clinical trial th
Slide 27: Questions
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Slide 28: Appendix
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Slide 29: Strategy: Adoption, Retention and Revenue Generation
STRATEGY: ADOPTION, RETENTION AND REVENUE GENERATION FOCUS AREAS: 1. Diversify sales process to target Strategic Accounts differently, including education and Key Opinion Leader (KOL) engagement activities ADOPTION, by our Medical Affairs team RETENTION AND 2. Drive protocolized adoption of Cxbladde
Slide 30: Bladder Cancer in the US Market
BLADDER CANCER IN THE US MARKET VALUE PROPOSITION Cxbladder Cxbladder Cxbladder TRIAGE DETECT MONITOR US$4.9B (CxbT) (CxbD) (CxbM) 90% US$220,000 Forecast direct costs Five-year survival Average lifetime associated with rate if detected cost2 per patient urothelial cancer early1 in 20202 Patient car
Slide 31: Strategy: Evidence, Coverage and Guidelines Change Clinical Practice
STRATEGY: EVIDENCE, COVERAGE AND GUIDELINES CHANGE CLINICAL PRACTICE FOCUS AREAS: Generate high-quality clinical validation and utility evidence through clinical studies Use Clinical Utility evidence to: EVIDENCE • Drive the adoption of Cxbladder by clinicians, COVERAGE AND insurers and hospitals ah
Slide 32: Strategy: Research and Innovation: Understanding the Entire Commercialisation Pathway
STRATEGY: RESEARCH AND INNOVATION: UNDERSTANDING THE ENTIRE COMMERCIALISATION PATHWAY RESEARCH & INTELLECTUAL TECHNOLOGY PRODUCT INNOVATION PROPERTY COMMERCIALISATION FOCUS AREAS: 1. Evaluate ‘product concepts’ to address unmet clinical needs through market research and scientific/clinical advisory
Slide 33: Pacific Edge: A History of Research-Led Innovation and Growth
PACIFIC EDGE: A HISTORY OF RESEARCH-LED INNOVATION AND GROWTH Aug 2021 Cxbladder reaches 70% public healthcare 2012 coverage in NZ O’Sullivan et al: Aug 2019 Cxbladder Detect Konety et al: Oct 2021 performance Clinical Utility of PEB raises $103.5m 2008 CxbD in validation (~US$72.5m) Holyoake et al:
Slide 34: For More Information
FOR MORE INFORMATION: Dr. Peter Meintjes Chief Executive Officer email: peter.meintjes@pelnz.com Grant Gibson Chief Financial Officer email: grant.gibson@pelnz.com Pacific Edge 87 St David Street, PO Box 56, Dunedin, New Zealand P +64 3 479 5800 F +64 3 479 5801 email: investors@pacificedge.co.nz ww