full year results presentation for the twelve months to 31 ......full year results presentation for...
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FullYearResultsPresentationForthetwelvemonthsto31March2017
24May2017
PacificEdge2017FullYearResultsPresentation
JointanalysisofKaiserPermanentestudycompletedwithpositiveandcompellingresults
OfficialUSlaunchofCxbladderMonitor
NZLaunchCxbladderResolve
Successful$8mshareplacement
NamedinTIN100TopTenHotEmergingCompanies
FY17MILESTONESSignificantProgressAchieved
Officiallaunchofbladdercancer.mesite
Cxbladder MonitorpresentationatAUA
MTANZAwardwinner
InsurancecoveragewithSovereign
Insurancecoveragewithnib
ApprovedprovidertoTRICARE
AddedtostandardofcareforWaitemata DHB
APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR
Slide2
PacificEdge2017FullYearResultsPresentation
Significantprogressachievedwithtransformationallargescalecustomers
IncontractwithVA
IncontractwithTRICARE
CompletedKaiserPermanenteUserProgrammeandnowincommercialdiscussions
WellprogressedwithCMSregulatoryprocess
Increasingadoptionbyhealthcareprovidersandinsurers
InsurancecoveragebynibandbySovereigninNewZealand
AddedtoStandardofCareforWaitemata DHB
AddedtoStandardofCareforCanterburyDHB
MultipleclinicalstudiesandpapersvalidatingthesuperiorperformanceofCxbladder
Presentations/publications:AmericanUrologicalAssociation2016Conference
AmericanJournalof Urology
UrologicalOncologyAdvancesinTherapy
UrologyspecificmediaGenomeWeb
UrologyTimes
Expanded suiteofCxbladdertests
OfficiallaunchofCxbladderMonitorintheUSinDecember2016
Launchoffourthproduct,CxbladderResolve,inNewZealandinDecember2016
FY17HIGHLIGHTSSignificantcommercialprogressbeingmade;ContinuedsalesgrowthexpectedinFY18
Slide3
PacificEdge2017FullYearResultsPresentation
FY17REVENUE62%UpliftinProductSales
FY17NZ$(000)
FY16NZ$(000)
Change(%)
Operating Revenue 8,062 4,976 62%
Other revenue 1,473 2,217
Total Revenue 9,535 7,193 33%
Positivegrowthinproductsalesfromnewandexistingcustomers,particularlyinNorthAmerica.
FY17excludesanyrevenuefromtransformationalcustomers.
OtherrevenueincludesfundingfromCallaghanInnovationGrant,withanadditional$3mgrantreceivedinMarch2017,tobespreadovertwoyears.
OPERATINGREVENUE
LABORATORYTHROUGHPUTIncludesUserProgrammesandcommercialtests
35%increaseintest
throughputcomparedtothepreviousyear
Sixmonthfinancialreportingperiod
62% increasein operatingrevenue
comparedtothepreviousyear
0
2000
4000
6000
8000
10000
12000
FY14 FY15 FY16 FY171H 2H
0
2
4
6
8
10
FY15 FY16 FY17
NZ$Million
IHOpRevenue 2HOpRevenue TotalRevenue
Inthepastfouryears,operatingrevenuehasgrownfrom$150,000to$8.1million
Slide4
PacificEdge2017FullYearResultsPresentation
FY16:FY17REVENUEBRIDGE
FY16
OperatingRevenueGrowth
Grantfunding
FX,Interest,Other
FY17
REVENUEGROWTH
Positivegrowthinproductsales:Nocontributionyetfromnewlargescalecustomers– VAandTRICARE
FY17salesrestrainedby:• Timingofcommercialisationofscalecustomers• TimingoflaunchofnewproductsintheUS• PoliticaluncertaintyintheUSwhichnegatively
impactedonthewiderhealthcaresectorintheUSinthesecondhalfoftheyear.
ChangesinCallaghanInnovationGrowthGrantschememeansthatinternationalinvestmentinR&Disnolongerclaimable
Slide5
+62%
PacificEdge2017FullYearResultsPresentation
FY17INVESTMENTINTOGROWTH
OPERATINGEXPENSES
Continuedinvestmentintofourstrategicareas:• People– expandedsalesteamfrom12to18salesexecutives• Products– developmentandlaunchofCxbladderResolve• Marketexpansion– investmentintoSouthEastAsiaandUS• IntellectualProperty
Expensesincludenon-cash,non-recurringexpenseof$2.9minrelationtothewindupoftheEmployeeIncentiveScheme
Conservativeapproachtakentobaddebtprovisioning
Operatingrevenueoutgrowingexpenses:OperatingRevenue+62%;OperatingExpenses+6%Note:OperatingExpensescomparedonalike-for-likebasis
Overall,PacificEdgereporteda$21.0millionlossfortheyear,inlinewithgrowthstrategyandmanagementexpectations.
Slide6
FY17$NZ’000
FY16$NZ’000
%Change
TOTALREVENUE 9,535 7,193 33%
Laboratory Expenses 996 1,047
Research 4,908 4,442
SalesandMarketing 1,923 1,021
Other 16,517 16,358
TotalRecurringOperatingExpenditure
24,342 22,870 6%
BadandDoubtfulDebtsExpenditure
3,248 -
Wind upofEmployeeIncentiveScheme(non-cash)
2,925 -
NET(LOSS)BEFORETAX (21,048) (15,453) 36%
PacificEdge2017FullYearResultsPresentation
FY17CASHFLOW
NETOPERATINGCASHFLOW
Netoperatingcashflowatasimilarleveltothepreviousyear
116%increaseinreceiptsfromcustomersandgrantincomecomparedtoFY17,offsettingthehigherFY17expenses
NETOPERATINGCASHFLOWS FY17$NZ’000
FY16$NZ’000
Receipts fromcustomersandgrantproviders 7,864 3,648
Interestreceived 732 319
Paymentstosuppliersand employees 26,458 20,908
NetGSTchange (25) 12
NET CASHFLOWSFROMOPERATINGACTIVITIES
(17,837) (16,952)
Slide7
PacificEdge2017FullYearResultsPresentation
FY17FINANCIALPOSITION– BALANCESHEETDebtfree– ShareholderCapitaltheMainSourceofFundingForGrowth
Cashandcashequivalents$14.6millionasat31March2017
Debtfreewithfundingfromsalesrevenue,shareholdercapitalandtechnologygrantsfornewproductdevelopment,commercialisationandinvestigationintoSouthEastAsia
Successful$8.75millionshareplacementtoinstitutionalandotherinvestorscompletedinFebruary2017
Fundsarebeinginvestedintocommercialgrowthasthecompanyworkstowardsattainingacashflowpositiveposition.
FY17$NZ’000
FY16$NZ’000
Cash,CashEquivalentsandShortTermDeposits
14,564 24,160
Trade Receivables,InventoryandOtherCurrentAssets
7,833 6,933
Property, PlantandEquipment 837 990
IntangibleAssets 329 248
TotalAssets 23,563 32,331
Payables andAccruals 2,734 2,523
TotalLiabilities 2,734 2,523
Equity 20,829 29,807
Slide8
PacificEdge2017FullYearResultsPresentation
IncidencerankingfortheUSA
PacificEdge2017FullYearResultsPresentation
CXBLADDERNOWDOMINATESTHECLINICALPATHWAY
• Delivering innovative solutions for the early detection and bettermanagement of bladder cancer
• Four products serving multiple clinical needs, across thehaematuria and bladder cancer clinical pathways
• Provides a huge opportunity and significant competitive advantagefor Pacific Edge
• Cxbladder leading to a step change in the clinical pathways forhaematuria and bladder cancer
• Benefits: Accurate, Non-invasive, Simple to Use, Cost Effective
• PrimarymarketistheUS,theworld’slargesthealthcaremarket.
• Fourmainareasofinvestment- People,IntellectualProperty,MarketExpansionandProductDevelopment
Pacific Edge is the only company in the world to offer a suite of proprietary molecular diagnostic tests forbladder cancer, from assessment and detection to management and monitoring for recurrence of the disease
Slide10
PacificEdge2017FullYearResultsPresentation Slide11
TARGETMARKETS
PacificEdge2017FullYearResultsPresentation
MARKETSGrowingadoptionofCxbladder
Transformationalclients(UnitedStates)
National ProviderNetworks(UnitedStates)
PrivateInsuranceProviders(NewZealand)
Adoption byDistrictHealthBoards(NewZealand)
Veterans Administration– Incontract
TRICARE– Incontract
KaiserPermanente– Incommercialdiscussions
CMS– Wellprogressedinregulatoryprocess
Stratose
FedMed
America’sChoiceProviderNetwork
MultiPlan
SovereignInsurance
Nibhealthinsurance
Bay ofPlentyandLakes
Canterbury
Waitemata
Slide12
PacificEdge2017FullYearResultsPresentation
MARKETSUSRemainsthePrimaryFocus
COMPLETED √ 18salesexecutivesfocusedon19targetedsalesregions
COMPLETED √ Identified VeteransAdministration(VA),TRICARE,KaiserPermanenteandCentresforMedicareandMedicaidastransformationallargescalecustomers
COMPLETED √ Incontract andagreedpricingwithVAandTRICARE
InProgress Incommercial discussionswithKaiserPermanente;WellprogressedinCMSregulatoryprocess
Ongoing LargeUrologyGrouppractices- Keytargetforscale sales,nowmovingatpace,salesarestartingtomeet companyexpectations
Ongoing PrimaryfocusonestablishingnewUserProgrammeswithlargeinstitutionalcustomersaswebuildmomentum
Ongoing TransitioningexistingUserProgrammestocommercialcustomers
UnitedStates:Theworld’slargesthealthcaremarketOver11,000urologistsandmillionsofpotentialclinicalopportunitiesforuseofCxbladderproducts
Slide13
FY17OBJECTIVESANDPROGRESS:USRemainsthePrimaryFocus
PacificEdge2017FullYearResultsPresentation
COMPLETED√ SignedFederalSupplySchedule Agreement(Feb2016)
COMPLETED√ Negotiatedcontractpricefortests(2016)
COMPLETED√ Identified leadingVAcentreswithvolumehaematuria
COMPLETED√ CxbladdertestaddedtotheVAscheduleapproved forsaletoveterans:• Cxbladderhasacodewhich ensureseaseofuseand
speedyrecoveryofrevenue• Cxbladderhasacontracted pricewiththeF.S.Sforthe
VA.Sitesmaynegotiateto obtainabetterrate(Volume).
InProgress Targeting fivelargeVAclinics.SeveraloftheseclinicsexpectedtoincorporateCxbladderintotheirclinicalpracticeinthenearfuture.AnticipateUserProgrammes forthelarger keysitesasperotherlargenon-VA customers
VETERANSADMINISTRATION(VA)OneofPacificEdge’sKeyCustomers
VETERANSADMINISTRATION
• Federalfundedhealthcareforveteransandtheirfamilies
• BeingincontractprovidestheabilitytomarketandsellCxbladderproductstotheVA’scliniciansandhealthproviders
• Approximately20millionpeopleundercoverincludingfamilymembers
• Networkofitsownclinics,hospitalsanddedicatedstaff
Slide14
FY17OBJECTIVESANDPROGRESS:ContinuetotargetselectedVAsites
PacificEdge2017FullYearResultsPresentation
TRICAREOneofPacificEdge’sKeyCustomers
TRICARE
• Healthcareprogramme forUSuniformedservicemembersandtheirfamiliesaroundtheworld
• ManagedbytheDefenseHealthAgency
• 9.4millionbeneficiarieswith70.5millionoutpatientvisitsin2015
• 55Militaryhospitals
• 373militarymedicalcentres
COMPLETED√ Approved asaprovider(October2016)
COMPLETED√ Negotiatedcontractpricefortests(October2016)
InProgress ThePacificEdgeUSsalesteamareleveragingexistingrelationshipswithhighvolumesitesintargeted areas
AnticipateUserProgrammes for thelarger keysitesasperotherlargecustomers
Slide15
PacificEdge2017FullYearResultsPresentation
KAISERPERMANENTEPotentiallyTransformationalForTheCompany
KAISERPERMANENTE
• Anintegratedmanagedcareprovider,headquarteredinCalifornia
• Fullyintegratedhealthcareincludinginsurancecoverageofitspatients
• Oneofthenation’slargestnot-for-profithealthplans,servingmorethan10.6millionmembers(approx.twicethesizeofNewZealand)
• Morethan18,000physiciansemployedacross38hospitalsandmorethan600medicalofficesandotherfacilities
COMPLETED√ Completionof largescaleUserProgrammeinfirsthalfFY17
COMPLETED √ Jointanalysisofdatacompletedwithpositiveandcompellingfindings
In Progress Study findingstobesubmittedforscientificandclinicalpublication
In Progress InfinaldiscussionswithKaiserPermanenteregardingwhereintheirclinicalpathwaytheywilldeployCxbladder
Slide16
FY17OBJECTIVESANDPROGRESS:CompleteKaiserPermanenteUserProgrammeandprogresstocommercialrelationship
PacificEdge2017FullYearResultsPresentation
CENTERSFORMEDICAREANDMEDICAID/OTHERCUSTOMERS
CENTERSFORMEDICAREANDMEDICAID
• USfederalagencywhichadministersMedicareandMedicaid
• Medicareisnationalsocialinsuranceprogramprovidinghealthinsuranceforover46millionAmericansaged65andolder
• MedicaidissocialhealthcareprogramforlowincomeAmericanfamiliesandindividuals
InProgress RegulatoryprocesstogainaLocalCoverageDecisionwiththeCMSiswellprogressed
Ongoing USsalesteamcontinuingtotargetindividualurologistsandlargeurologypracticestoinitiatenewUser Programmes,andtransitionearlyadoptersintocommercialcustomers.Thefocuswillbeonlargepracticesinacademiccentres
Workwithacademic centresand hospitalstogainacceptanceofCxbladderintotheircarepathways
Slide17
FY17OBJECTIVESANDPROGRESS:ProgressdiscussionswithCMS
ContinuetoinitiatenewUserProgrammeswithkeycustomers
PacificEdge2017FullYearResultsPresentation
OTHERMARKETSNewZealand,Australia,SouthEastAsia
AUSTRALIA WorkwithTolmar AustraliatobuildawarenessandincreasesalesofCxbladdertestsinAustralia• Tolmar Australia’sninededicatedurologysalesexecutivesleveragingtheirexistingnetworks;
targetinglargehospitalsaswellasindividualurologists• ThreeproductsnowavailableinAustralia
SOUTHEASTASIA EstablishabaseinSingaporeforfurtherinvestigationintoSouthEastAsia,continuetosupportcurrentUserProgrammeinSingaporeandinitiatenewUserProgrammeswithtargetedhealthcareproviders• CommercialbasenowestablishedinSingaporeincludingdistributionandlogisticsprocesstoallow
testanalysisinNewZealand• WorkingonsigningupnewUserProgrammeswithlargehospitals.SecondUserProgramme
commenced,withSingapore’slargesthospital
NEWZEALAND ContinuetoworkcloselywithhealthcareprovidersandurologistsinNewZealandtoencourageuptakeofCxbladder• AgreementswithseveralDistrictHealthBoardstoincludeCxbladderinclinicalpathway• Cxbladderundercoverbytwohealthcareinsuranceproviders
Slide18
PacificEdge2017FullYearResultsPresentation
CXBLADDERDETECTIn-Market2013/14
CXBLADDERTRIAGEIn-Market2015/2016
CXBLADDERMONITORNZLaunchDec2015
OfficialUSLaunchDec2016
CXBLADDERRESOLVENZLaunchDec2016USARollout2018
PRODUCTSOurProductsNowSpanTheEntireClinicalPathway- AWorldFirst
FY17OBJECTIVESANDPROGRESS
RolloutofCxbladderMonitorintotheUnitedStatesandAustralia• Australiarolloutcompleted• FullUSAlaunchinDecember2016tocoincidewith
publicationofscientificpaper
LaunchCxbladderResolveinNewZealand• LaunchedinNewZealandinDecember2016
CxbladderincludedinStandardofCareandguidelines• IncludedinAUAguidelinesasanalternativetest• AddedtoStandardofCareforpubliclyfundedCanterbury
DistrictHealthBoard(CDHB)andWaitemata DHB
Slide19
PacificEdge2017FullYearResultsPresentation
GROWINGCLINICALEVIDENCEINSUPPORTOFCXBLADDER
Slide20
84%
97%
13%
23%
20% 29
%
4%
14%
0%
20%
40%
60%
80%
100%
Low Grade High Grade
Sensitivity by Tumour Grade
Cxbladder Monitor Urine Cytology
NMP22 ELISA NMP22 BladderChek
93% 98
%
33%
92%
0%
20%
40%
60%
80%
100%
Sensitivity NPV
Sensitivity of Cxbladder Monitor vs UroVysion FISH
Cxbladder Monitor UroVysion FISH
SUPERIORSENSITIVITYOFCXBLADDERMONITORINCLINICALSTUDYLotanetal:Clinicalcomparisonofnon-invasiveurinetestforrulingoutrecurrenturothelialcarcinoma.UrologicOncology(2017)
89% 97
%
100%
16%
31%
26%
21%
41%
32%
5%
31%
11%
0%
20%
40%
60%
80%
100%
Ta Tis ≥T1
Sensitivity by Tumour Stage
SUPERIORPERFORMANCEOFCXBLADDERMONITORINRULINGOUTRECURRENCEOFBLADDERCANCER“PerformanceCharacteristicsofaMultigeneUrineBiomarkerTestforMonitoringforRecurrentUrothelialCarcinomainaMulticenter Study”
93%Sensitivity
97%Negative PredictiveValue
COMPELLINGCHANGESINCLINICALDECISIONSWITHUSEOFCXBLADDERTRIAGEANDCXBLADDERDETECT396clinicianbypatientinteractionstotalling792separateclinicaldecisions
• Allurologistschangedtheirclinicaldecisionmaking• 25%reductionintotalnumberofdiagnosticproceduresrequired• 31%reductionininvasivetests
CXBLADDERMONITORSIGNIFICANTLYOUTPERFORMEDALLCOMPAREDFDAAPPROVEDURINETESTSFORBLADDERCANCER“ClinicalComparisonofNon-invasiveUrineTestsforRulingOutRecurrentUrothelialCarcinoma”
PacificEdge2017FullYearResultsPresentation
SALESCHANNELSBuildAwareness,EncourageAdoption,TransitionToCommercialCustomer
FY17OBJECTIVESANDPROGRESS
In Progress ContinuetoinitiatenewUserProgrammesandtransitionearlyadoptersintocommercialcustomers
• NowstartingtoseetractionasUserProgrammestransitiontocommercialcustomers
InProgress Identifyandinvestigatenewsaleschannels
• Continuetoidentifynewsaleschannels• Enhanced e-commerceplatform
InProgress Increaseonlinemarketingandproductawareness,includingongoingsupportforpatientcommunity,bladdercancer.me
Slide21
PacificEdge2017FullYearResultsPresentation
LOOKINGFORWARDPrioritiesForFY18
MARKETS
• UnitedStatesremainstheprimaryfocus• NewZealand:ContinuetoencourageuptakebyDHBs• Australia:ConversionofUserProgrammeswithearly
adopters• Singapore:GrowUserProgrammebasewithnewurology
practicesandhospitals
PRODUCTS
• RolloutofCxbladderResolveinAustralia,withsoftlaunchinUSbyyear-end
• LeveragethecombinedpoweroftheCxbladdersuiteacrossthehaematuriaandurologypathwaysaffectingtheStandardofCare
CUSTOMERS
• BringKaiserPermanenteonboardascommercialcustomer• BuildcommercialrelationshipswithtargetedlargescaleVA
facilitiesandurologypracticesthatservicetheactivemilitary• InitiateUserProgrammeswithtargetedVeterans
Administrationsites• CompletetheregulatoryprocessforCenters forMedicare
andMedicaidServices• Transitionearlyadoptersintocommercialcustomers
SALESCHANNELS
• ContinuetoinitiatenewUserProgrammes• Increasedmarketinginvestment,particularlyintodigital
media• Targetinginstitutionalandlargepracticeacademicsitesinthe
US
Slide22
PacificEdge2017FullYearResultsPresentation
QUESTIONANDANSWER
PacificEdge2017FullYearResultsPresentation
www.pacificedge.co.nzwww.cxbladder.comwww.pacificedgedx.com
DavidDarlingChiefExecutiveOfficerPacificEdgeLimitedTel:+6434795802Mobile:+6421797981Email:[email protected]
PacificEdge2017FullYearResultsPresentation
DISCLAIMER
InformationTheinformationinthispresentationisanoverviewanddoesnotcontainallinformationnecessarytomakeaninvestmentdecision.ItisintendedtoconstituteasummaryofcertaininformationrelatingtotheperformanceofPacificEdgeLimited.Theinformationinthispresentationisofageneralnatureanddoesnotpurporttobecomplete.ThispresentationshouldbereadinconjunctionwithPacificEdge'sotherperiodicandcontinuousdisclosureannouncements,whichare availableatnzx.com.NotfinancialproductadviceThispresentationisforinformationpurposesonlyandisnotfinancialorinvestmentadviceorarecommendationtoacquirePacificEdgesecurities,andhasbeenpreparedwithouttakingintoaccounttheobjectives,financialsituationorneedsofindividuals.PacificEdge,itsdirectorsandemployeesdo notgiveormakeanyrecommendationoropinioninrelationtoacquiringordisposingofshares.Inmakinganinvestmentdecision,investorsmustrelyontheirownexaminationofPacificEdge,includingthemeritsandrisksinvolved.Investorsshouldconsultwiththeirownlegal,tax,businessand/orfinancialadvisorsinconnectionwithanyacquisitionofsecurities.FutureperformanceThispresentationcontainscertain'forward-lookingstatements',forexamplestatementsconcerningthedevelopmentandcommercialisationofnewproducts,regulatoryapprovals,customeradoptionandresultsoffutureclinicalstudies.Forward-lookingstatementscangenerallybeidentifiedbytheuseofforward-lookingwordssuchas,'expect','anticipate','likely','intend','could','may','predict','plan','propose','will','believe','forecast','estimate','target','outlook','guidance'andothersimilarexpressions.Theforward-lookingstatementscontainedinthispresentationarenotguaranteesorpredictionsoffutureperformanceandinvolveknownandunknownrisksanduncertaintiesandotherfactors,manyofwhicharebeyondthecontrolofPacificEdgeandmayinvolvesignificantelementsofsubjectivejudgementandassumptionsastofutureeventswhichmayormaynotbecorrect.Therecanbenoassurancethatactualoutcomeswillnotmateriallydifferfromtheseforward-lookingstatements.Anumberofimportantfactorscouldcauseactualresultsorperformancetodiffermateriallyfromtheforward-lookingstatements.Theforward-lookingstatementsarebasedoninformationavailabletoPacificEdgeasatthedateofthispresentation.Exceptasrequiredbylaworregulation(includingtheNZXMainBoardListingRules),Pacific Edgeundertakesnoobligationtoprovideanyadditionalorupdatedinformationwhetherasaresultofnewinformation,futureeventsorresultsorotherwise.NorepresentationTothemaximumextentpermittedbylaw,PacificEdgeanditsadvisers,affiliates,relatedbodiescorporate,directors,officers,partners,employeesandagentsmakenorepresentationorwarranty,expressorimplied,astothecurrency,accuracy,reliabilityorcompletenessofinformationinthis presentation.
ThispresentationshouldbeviewedinconjunctionwithPacificEdge’sFinancialStatementsforthe12monthsto31March2017 andtheaccompanyingmediareleasewhichwasreleasedtothemarketon24May2017
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