PEB - Pacific Edge Ltd

[Minerbarejet]

Regarding the 100M target, has anyone ever questioned how this came about? Was it a "we estimate the accessable market is X, our penetration will be Y (based on factors 1, 2, 3) and based on similar companies and known hurdles this should take 5 years" or was it "this number looks impressive, investors will like it, lets go with that" *pats on back all round*.

Check out Annual Reports 2011 and 2012 for starters. The Chairman and CEO reports on what were known factors at the time are particularly interesting with the advantage of hindsight. It seems to me that the shapeshifting US Healthcare system and associated regulatory quagmire are PEB's biggest problem. Now that Congress are trying to unfund AHRQ does this open another can of worms elsewhere? These barriers were noted as possible regulatory risks in the reports but I think they may have underestimated the possible effects and therefore the delays. There was a chart, which I can no longer find, regarding the estimated market penetration which showed a 10 percent MP raising 100 mill GR anually in the 5th year. Someone may be able to help.
Regardless, PEB did a lot of homework on this and based their projections on known factors at the time.
What else would you use?
They definitely did not just pluck it out of the sky and there are plenty of warnings to all concerned that there are risks involved in many areas, some unknown.

[blobbles]

Regarding the 100M target, has anyone ever questioned how this came about? Was it a "we estimate the accessible market is X, our penetration will be Y (based on factors 1, 2, 3) and based on similar companies and known hurdles this should take 5 years" or was it "this number looks impressive, investors will like it, lets go with that" *pats on back all round*.

Actually, the first one. The company has stated numbers backed up by others for years. The basics are:

US market potential is approx 2m tests per year.
Full price per test is ~$500 USD.
Potential market size = ~$1b
Hopeful market penetration in 5y = ~10% @$100m

That's pretty doable if Kaiser sign up and a couple of others. If PEB gets written into the SOP (I can't remember what this is called in the US medical world!) of how they test for bladder cancer in the US, obviously that is going to have a huge impact and would give them a much bigger market share. That is what they are hoping for, but the politics and testing involved are huge.

[pierre]

I'm pretty heavily invested in PEB so have booked flights to attend the AGM on August 13.
If you would like me to ask a question or two at the meeting send them in on this thread. I'll package them up and submit to the company in advance so they have time to research their answers. I'll report back after the meeting.
Might be a good way to get clarity on issues of concern.
What do you reckon?

[trader_jackson]

Very nice of you to do that Pierre, as a % of my portfolio I am also rather heavily invested... so maybe a question around what year they expect to reach their 100m target and their side of the story on how they are going to get there? (thoughts?)

[Balance]

I'm pretty heavily invested in PEB so have booked flights to attend the AGM on August 13.
If you would like me to ask a question or two at the meeting send them in on this thread. I'll package them up and submit to the company in advance so they have time to research their answers. I'll report back after the meeting.
Might be a good way to get clarity on issues of concern.
What do you reckon?

Great idea, Pierre and thanks. Questions : How many tests have PEB sold vs how many have they provided via the user programs? What is the average cost per test they have achieved in US, NZ and Australia.

[Carpenterjoe]

Great idea, Pierre and thanks. Questions : How many tests have PEB sold vs how many have they provided via the user programs? What is the average cost per test they have achieved in US, NZ and Australia.

Franco man, I can see where your brain is going. But try not embarrass Pierre with questions that have already been covered.

[Balance]

Franco man, I can see where your brain is going. But try not embarrass Pierre with questions that have already been covered.

Really appreciate if you can explain where the questions have been covered and answered, and why there will be embarrassment? Are them not questions that any investor in PEB (shareholders and prospective shareholders) can and should ask?

[kiwidollabill]

So there were a few helpful (and no so helpful) answers to my question (which was an honest one) around formulation of the 100M number.

Another (serious) question around test pricing, $500USD is quoted above but the 2011 report states $300NZD retail, any market competitor comparisons? FYI direct cost for a melanoma DNA assay in a NZ hospital is ~$150+overheads+provider margin, DNA assays for HPV,CT etc are an order of magnitude lower.

[psychic]

Yup, noble gesture Pierre, but you are likely to be bombarded here with numpty questions by non-holders.
It's odd how this thread attracts and holds them.

[pierre]

Can I suggest that if you know the answer to a question that a ST member proposes, you should give the answer. That will assist everyone and avoid wasting time at the meeting. Oblique references are not especially helpful.