PEB - Pacific Edge Ltd

[snigmac]

Excellent work by PEB management. Hopefully the research will be the turn around required to keep Medicare coverage. Hopefully we will see a price adjustment to 20cents-$1 per share soon.

Disc-holding.

[jonu]

Excellent work by PEB management. Hopefully the research will be the turn around required to keep Medicare coverage. Hopefully we will see a price adjustment to 20cents-$1 per share soon.

Disc-holding.

The quantum shift in share price won't happen until Novitas is sorted, but I'd be happy to see north of 12c by the end of the week!
I don't see how Novitas can decline them if the AUA is promoting the latest study as "practice changing research".

[snigmac]

The quantum shift in share price won't happen until Novitas is sorted, but I'd be happy to see north of 12c by the end of the week!
I don't see how Novitas can decline them if the AUA is promoting the latest study as "practice changing research".

Fingers crossed Novitas moves quickly after the research is published in May 2024 to give PEB certainty around coverage. The uncertainty around coverage is negatively impacting the health of Americans potentially.

[pierre]

The quantum shift in share price won't happen until Novitas is sorted, but I'd be happy to see north of 12c by the end of the week!
I don't see how Novitas can decline them if the AUA is promoting the latest study as "practice changing research".
Depends how much butt covering Novitas do to justify their current position. Hopefully, they will be brave enough to say that new evidence justifies continuation of coverage. I don't think I'd be brave enough to bet the farm on that outcome though.

[snigmac]

Depends how much butt covering Novitas do to justify their current position. Hopefully, they will be brave enough to say that new evidence justifies continuation of coverage. I don't think I'd be brave enough to bet the farm on that outcome though.

You might not bet the farm but betting some sheep or a corner section of the farm could work out well.

[pierre]

You might not bet the farm but betting some sheep or a corner section of the farm could work out well.
I already hold a 7 figure number of PEB shares so I have a significant interest in the outcome of the Novitas review but I wouldn't buy more based on the potential for a positive result from the release of the results of the STRATA research.

[snigmac]

I already hold a 7 figure number of PEB shares so I have a significant interest in the outcome of the Novitas review but I wouldn't buy more based on the potential for a positive result from the release of the results of the STRATA research.

I also hold a 7 figure number of PEB shares (lower end of the 7 figure spectrum). What PEB needs is a opinion or a disclosure to the market of a opinion from a US lawyer on what the impact of the STARTA research will have on the Novitas decision that is in addition to the basic reconsideration information. Surely they have already sought the advice and based on legal guidance, moved forward with the research timetable as they have?

[sunnysleeper11]

dunno if anyone read my post - i thought my email from PEB was released to the nzx

[snigmac]

dunno if anyone read my post - i thought my email from PEB was released to the nzx

This is a huge tease, can someone shed some light on this?

[jonu]

dunno if anyone read my post - i thought my email from PEB was released to the nzx

It was due to them mentioning the word "material", however they didn't consider it price sensitive. I suspect they then released to the exchange to cover their behind. Why sunnysleeper11 inferred it was removed is perhaps best explained by them.

Anyoldwho, the market has viewed the AUA news and Strata research favourably.

[snigmac]

It was due to them mentioning the word "material", however they didn't consider it price sensitive. I suspect they then released to the exchange to cover their behind. Why sunnysleeper11 inferred it was removed is perhaps best explained by them.

Anyoldwho, the market has viewed the AUA news and Strata research favourably.

Thanks, I thought it was some secret email that indicated that there would be a favorable Novitas decision. Yes anywho, just a matter of waiting and seeing. I think alot of the investment houses in NZ have this graded as uninvestiable like Jarden and will be playing catch up if there is a favorable Novitas decision.

[jonu]

PEB has wind in its sails again this morning. :)
The AUA conference just happens to be kicking off.

Discl: Holding

[850man]

PEB has wind in its sails again this morning. :)
The AUA conference just happens to be kicking off.


Kick off is 10:40 on 3 May CDT, that's 17 hours behind NZT. The big deal is the STRATA study, the results of which are hidden until then and available on this link (https://public-usa.mkt.dynamics.com/api/orgs/6912579a-9fa2-46d4-936f-fbced94d4ce2/r/k9SKwSvXdE6VroEwzx_2ZAAAAAA?target=%7B%22TargetUrl %22%3A%22https%253A%252F%252Fwww.auajournals.org%2 52Fdoi%252F10.1097%252FJU.0000000000003991%22%2C%2 2RedirectOptions%22%3A%7B%225%22%3Anull%2C%221%22% 3Anull%7D%7D&digest=h53TaWJHOWq6VPN%2Buj6X3lh3Jsh6d%2FJ4C6j4OQT 4Rqk%3D&secretVersion=a587597bbd2d4ba3bb4334f6d8be15ee) after that time.
Fingers crossed it's as pivotal to PEB as it's reported as being. Needs to be enough to overturn Novitas' desire not to fund CXB.

Disc: Also holding

[Retired Doc]

Kick off is 10:40 on 3 May CDT, that's 17 hours behind NZT. The big deal is the STRATA study, the results of which are hidden until then and available on this link (https://public-usa.mkt.dynamics.com/api/orgs/6912579a-9fa2-46d4-936f-fbced94d4ce2/r/k9SKwSvXdE6VroEwzx_2ZAAAAAA?target=%7B%22TargetUrl %22%3A%22https%253A%252F%252Fwww.auajournals.org%2 52Fdoi%252F10.1097%252FJU.0000000000003991%22%2C%2 2RedirectOptions%22%3A%7B%225%22%3Anull%2C%221%22% 3Anull%7D%7D&digest=h53TaWJHOWq6VPN%2Buj6X3lh3Jsh6d%2FJ4C6j4OQT 4Rqk%3D&secretVersion=a587597bbd2d4ba3bb4334f6d8be15ee) after that time.
Fingers crossed it's as pivotal to PEB as it's reported as being. Needs to be enough to overturn Novitas' desire not to fund CXB.

Disc: Also holding
It would be very interesting to hear the dialogue of the Q&A session which should follow the presentation. It is a podium presentation but I could not see that it was at a plenary session which would be a huge coup.

[pierre]

It would be very interesting to hear the dialogue of the Q&A session which should follow the presentation. It is a podium presentation but I could not see that it was at a plenary session which would be a huge coup.

To save you doing the calculation it will be presented at 3:40am NZST tomorrow, Saturday. May the fourth be with PEB!
I'm keen to know the results of the research but don't think I'll be getting up that early to find out.

[hey_homes]

All I need is the share price to increase by a multiple of 14 and I’m in the money.

[pierre]

All I need is the share price to increase by a multiple of 14 and I’m in the money.
Sadly, you may have to wait a while after tomorrow's release for that to occur.

[winner69]

To save you doing the calculation it will be presented at 3:40am NZST tomorrow, Saturday. May the fourth be with PEB!
I'm keen to know the results of the research but don't think I'll be getting up that early to find out.

What came of it …was the fourth with PEB

[jonu]

What came of it …was the fourth with PEB

The study and commentary is now up on tha AUA Journal link provided earlier by 850man. Still reading it.

https://www.auajournals.org/doi/10.1097/JU.0000000000003991#msdynmkt_trackingcontext=c18ad 493-d72b-4e74-95ae-8130cf1ff664

It appears you can read the study results, but to read the AUA editorial content you need to stump up with $39USD or be an AUA member.

[pierre]

What came of it …was the fourth with PEB
It contains a lot of technical jargon that's well above my pay grade but it does read very positively.

Here's the final paragraph:
Oops - just noted that all the content is copyright and cannot be published anywhere without consent. Have to delete this - sorry.

You can read the report online though at:

https://www.auajournals.org/doi/10.1097/JU.0000000000003991#msdynmkt_trackingcontext=c18ad 493-d72b-4e74-95ae-8130cf1ff664


Is it enough to sway the bureaucrats at Novitas? We will just have to wait and see

[Greekwatchdog]

Interesting info thank you for sharing.

I read a while ago that the FDA was unhappy with Novitas decision to say who and what they pay for as its was the FDA'a decision to make. Novitas just pay the bills..

[winner69]

Seems that PEB need to completar evisculate extensible services and it will be a game changer

[850man]

It's a Creative Commons and can be shared so long as it's cited and not altered. The last paragraph is pretty clear:
"In conclusion, in this prospective multicenter randomized controlled trial, use of CxbT to inform the decision for cystoscopy in patients with LR hematuria resulted in a 59% reduction in cystoscopy. This demonstrated clinical utility of CxbT to safely reduce the burden of unnecessary cystoscopies in this population, theoretically resulting in less patient morbidity and discomfort, improved access to care, and reduced environmental impact."

[barney]

I think this is good news and hopefully it will have some sway on the Novitas decision. However, it appears to show results regarding clinical utility when the original concern for Novitas was the perceived bias in PEB's early clinical trials for efficacy. I'm certainly no expert, but are the results of the STRATA study enough for Novitas to put aside those original concerns? It would be great if that was the case, but who would know. Even if it is enough for Novitas to change their minds, I don't think that will happen before the July deadline. Given what we know of how slowly things work in the USA health system, a positive outcome based on the STRATA study may still be some time away.

[snigmac]

My understanding is that efficacy is the ability to produce a desired result. The PEB result confirms that PEB's CxBladder can produce the desired result of safely identifying issues without the need for invasive surgery. The whole idea of doing a randomized control trial is to remove selection bias. I'm not sure whether the result is a king hit to secure Medicare
(as it was completed by PEB and not a independent research company), however it is peer reviewed and if it is supported by the urology community (I don't have access to the full research or info on this), I would be surprised if Novitas does not at least delay this current attempt to remove coverage, and give PEB another e.g. 12 months to get more research completed.

DYOR - Disc - holding

[jonu]

PEB looking to kick on from last week. Where's it all end? :D

[Sgt Pepper]

PEB looking to kick on from last week. Where's it all end? :D

I am somewhat surprised by the market being underwhelmed about the STRATA study endorsement on CX Bladder and the presentation to the American Urologist conference. To date SP up 4.8% this morning, but this stock has always news driven. I know patience is a virtue but this stock was first listed in 2003:(

[snigmac]

It is likely that none of the big broker firms will look at PEB until PEB releases further information on 21 May 2024. We will get bigger positive movements after 21 May 2024 or if Novitas confirm Medicare coverage.

[pierre]

I am somewhat surprised by the market being underwhelmed about the STRATA study endorsement on CX Bladder and the presentation to the American Urologist conference. To date SP up 4.8% this morning, but this stock has always news driven. I know patience is a virtue but this stock was first listed in 2003:(
The content of the presentation is "interesting", however it's whether that information or anything else influences a decision in PEB's favour by Novitas in July that will determine any real action in the SP.

[mr optimistic]

So a negative result requires no Cystoscopy and a positive result does??????

[850man]

So a negative result requires no Cystoscopy and a positive result does??????

Yes, to identify what type of cancer, where it is and to what extent it has developed.

The benefit of CXBT in the diagnosis process is that many people who have symptoms that might be bladder cancer (e.g. micro hematuria) are reluctant to have a cystoscopy as it's an unpleasant procedure and frequently negative for cancer. Accordingly some positive cases are not detected early when treatment would be more successful. CXBT with it 99% NPV gives a patient peace of mind that their symptoms are not bladder cancer.

[snigmac]

Here's to hoping that we get some strong comments or addtional information from PEB next Tuesday about the Novitas LCD.

[jonu]

Here's to hoping that we get some strong comments or addtional information from PEB next Tuesday about the Novitas LCD.

It would be nice, as a minimum, to have some feedback from the AUA conference. I wouldn't be anticipating any startling new info in the results. Anything material should be immediately released.

[winner69]

CASH BURN SLOWS Coverage Catalysts in Focus

Another big loss taking Accumulated Losses to $246m …that’s a big number

One day things might be positive

Good luck to PEB getting the approvals they are after


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/PEB/431369/418809.pdf

[jonu]

CASH BURN SLOWS Coverage Catalysts in Focus

Another big loss taking Accumulated Losses to $246m …that’s a big number

One day things might be positive

Good luck to PEB getting the approvals they are after


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/PEB/431369/418809.pdf

This bit is encouraging

"End of period cash and cash equivalents of $50.3 million down from $62.2 million in
September 2023; a runway expected to be sufficient to support the company through to
regaining coverage in the event of a Medicare non-coverage determination."

Discl: holding

[whatsup]

CASH BURN SLOWS Coverage Catalysts in Focus

Another big loss taking Accumulated Losses to $246m …that’s a big number

One day things might be positive

Good luck to PEB getting the approvals they are after


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/PEB/431369/418809.pdf

Under the circumstances I think a reasonable result, points to keep in mind July 26 ann, cash burn, cash runway but on the whole the fish heads have done a very good job.

[snigmac]

Alot of promising and indicative words used in the presentation re guideline inclusion. Good to see that Novitas has been provided with a copy of the Strata Cxbladder research. I'm not sure how Novitas can say no to PEB, they could surely come up with something but reading between the lines, PEB are showing alot of confidence that they will get there eventually, it doesn't make sense to pull the rug if PEB will get their eventually...

[Greekwatchdog]

For Bars Review of the result
NEUTRAL


Pacific Edge's (PEB) FY24 result had no material surprises. Net cash of ~NZ$50m was slightly ahead of our expectations. The continued improvement in revenue per billable test (helped by a solid Kaiser contribution) was a small positive which offset slightly higher opex. We retain our NEUTRAL rating given the LCD outcome is binary and therefore high-risk, lab throughput is subdued, and under any scenario the risk of an equity raise within the next two years is elevated.

What's changed?
Earnings: FY25/FY26/FY27 EBITDA +NZ$0.7m/+NZ$3.0m/+NZ$1.6m with lower revenue offset by lower costs.
Target price: Increased to NZ$0.12 from NZ$0.11 given the modest earnings upgrades.
Pricing growth a positive in 2H24
A positive surprise was the continued strength in revenue per billable test, up +18% in 2H24 versus 2H23 and +6% sequentially. The two drivers are: (1) improved Kaiser performance — we estimate FY24 Kaiser revenue more than doubled versus FY23 to ~NZ$3.5m, and (2) an increase in proportion of tests paid for outside of CMS and Kaiser. At FY24 we estimate PEB's Southern California Kaiser population penetration is 0.05% (Southern California is ~37% of Kaiser's population) versus NZ at 0.08%. PEB's commentary suggested all 15 Kaiser Southern California sites volumes are increasing steadily, albeit it was conservative on the roll-out speed into other jurisdictions near term. Northern California is the likely next step, where its share of Kaiser's population is only modestly below Southern California. We had been sceptical of the patient pay strategy but early signs are positive, and we take comfort that the pricing uptick provides some insulation against the possible loss of CMS revenue (CMS was ~NZ$17m of revenue in FY24).


Solid opex control in 2H24


2H24 opex declined -NZ$4.8m sequentially to NZ$27.0m, with sales & marketing declining -NZ$3.0m, and G&A -NZ$2.4m. While this was less than we expected, PEB continues to accelerate the clinical research development which is the right strategy. For the time being, we see the 2H24 opex run rate as an appropriate base, but note PEB has levers to pull should the LCD decision require it.


Asymmetric upsides in the event of a favourable LCD outcome, but the uncertainty is very high
There were no new updates on the LCD decision which is due before 26 July 2024. PEB currently trades on ~1x EV/12 month forward sales. On a EV/sales multiple basis broadly consistent with biotech peers (5–6x), should the LCD decision be favourable, we derive a ~NZ25-30cps price. More comparable genomic peers, which have meaningfully lower revenue growth trade on ~3.2x EV/sales. Our discounted cash flow valuation scenario that assumes CMS coverage continues is NZ$0.24. We acknowledge PEB was trading between NZ$0.40 and NZ$0.50 prior to the recent unfavourable decision, but given the net cash deterioration and soft lab throughput trends, the share price may not recover to these levels (at least in the near term).

Earnings changes
We make minor earnings changes across our forecast horizon. We again downgrade our revenue expectations with lower CMS and ‘other US’ volumes slightly offset by higher Kaiser volumes and stronger pricing (combination of stronger Kaiser volumes and a higher share of US volumes, ex CMS and Kaiser paid for).


Our presented forecasts use our scenario that CMS coverage remains.


Our target price increases to NZ$0.12 (from NZ$0.11) reflecting the modest earnings upgrades. Our target price methodology is a probability weighted DCF scenario of: (1) no change to CMS coverage (PEB continues to be covered), (2) coverage resumes in FY27, and (3) coverage resumes in FY29. We acknowledge a tail risk that coverage isn't achieved at all, but we see this as very unlikely. Our valuation scenario that assumes CMS coverage continues is NZ$0.24.

[snigmac]

It is interesting that For Bars set out that "We acknowledge a tail risk that coverage isn't achieved at all, but we see this as very unlikely". In a world where the business will get there or is very likely to get there to meet requirements, why would Novitas cut funding when there are cost savings provided by PEB :o

[850man]

It is interesting that For Bars set out that "We acknowledge a tail risk that coverage isn't achieved at all, but we see this as very unlikely". In a world where the business will get there or is very likely to get there to meet requirements, why would Novitas cut funding when there are cost savings provided by PEB :o

My concern is with Novitas' ego. They cocked up the initial funding removal because they failed to follow process. This second round is really about following process. Do they want egg on their faces if it also shows they made a bad call 1st time to cut funding? As a supplier to the US government, I'd say not.

[snigmac]

My concern is with Novitas' ego. They cocked up the initial funding removal because they failed to follow process. This second round is really about following process. Do they want egg on their faces if it also shows they made a bad call 1st time to cut funding? As a supplier to the US government, I'd say not.

But if PEB meet guideline requirements in future and there is weakish indicative information on this now, is it a matter of egg on face now or egg of face in e.g. 2 or 3 years time? How would Novitas dispute the research that has been completed and supported?

[850man]

But if PEB meet guideline requirements in future and there is weakish indicative information on this now, is it a matter of egg on face now or egg of face in e.g. 2 or 3 years time? How would Novitas dispute the research that has been completed and supported?
Agree, the STRATA study is compelling and it would appear accepted by the AUA. I would say Novitas would be getting it right to continue to fund CXB as they can go back to the US government and show savings and improvements in patient outcomes. A double win for them. Let's hope it plays out that way

[kiora]

"Urine Tests Could Be 'Enormous Step' in Diagnosing Cancer"
https://www.medscape.com/viewarticle/urine-tests-could-be-enormous-step-diagnosing-cancer-2024a10009km?ecd=wnl_recnlnew1_ous_240523_MSCPEDIT _etid6539588&uac=426896AZ&impID=6539588

[davflaws]

"Urine Tests Could Be 'Enormous Step' in Diagnosing Cancer"
https://www.medscape.com/viewarticle/urine-tests-could-be-enormous-step-diagnosing-cancer-2024a10009km?ecd=wnl_recnlnew1_ous_240523_MSCPEDIT _etid6539588&uac=426896AZ&impID=6539588

Nothing about bladder cancer or the Pacific Edge Suite.

[850man]

Nothing about bladder cancer or the Pacific Edge Suite.
The author almost seems out of touch with the topic. Urine tests have been around and is use for some time, she almost reports it as revolutionary.

[bulltrap]

Interesting to see that there's 5M shares on offer for $0.195. But at almost twice the market price it doesn't seem likely to trade any time soon.

Presumably with a holding that large, it'd be an institutional player who knows what they're doing.

Does anyone have a read on the tea leaves? Could this be a big boy convention for signalling an acceptable price for a buyout perhaps?

(I'm not sure if offers like this are unusual, as Jarden Direct depth only shows me the first 15 price points.)

[snigmac]

I don't think 5m shares is a huge number. If PEB keeps Medicare cover, the price of this share will fly to around 25c minimum at least with more upside. All the institutions would be aware that this one is abit of a gamble with huge upside.