Highlights

  • Pacific Edge launched a NZ$24 million Capital raise to support operations, Medicare re-coverage efforts, and future growth.
  • FY26 Revenue declined sharply after Medicare stopped reimbursing Cxbladder tests in the US.
  • The company expects a potential Medicare policy breakthrough before September 2026 that could significantly improve revenues.

Overview

Cancer diagnostics company Pacific Edge Limited (NZX:PEB) has announced a NZ$24 million capital raising initiative as it seeks to strengthen its Balance Sheet and position itself for future growth following major Medicare reimbursement challenges in the US market. The raise includes a NZ$18 million institutional Placement and a NZ$6 million retail offer priced at NZ$0.170 per share. The company said the funding will help support ongoing operations, product development, evidence generation, and efforts to regain Medicare coverage for its Cxbladder diagnostic tests. Pacific Edge also released preliminary FY26 financial information showing Operating Revenue fell to NZ$11.5 million from NZ$21.8 million in FY25 after Medicare ceased reimbursement for certain tests. Despite the revenue decline, the company reduced expenses and lowered cash burn through cost-control measures. Management remains optimistic that a potential new Medicare coverage determination expected later in 2026 could become a major commercial turning point.

Why Did Pacific Edge’s Revenue Fall Sharply in FY26?

Pacific Edge experienced a substantial decline in FY26 revenue primarily because Medicare stopped reimbursing its Cxbladder tests following a non-coverage determination introduced in 2025. The decision significantly impacted US laboratory volumes, which dropped more than 21% year-over-year. The company also faced challenges transitioning customers from Cxbladder Detect to its newer Triage product while attempting to market tests without Medicare support. As a result, FY26 operating revenue nearly halved compared with the previous year. However, Pacific Edge managed to reduce operating expenses and monthly cash burn through cost-saving initiatives aimed at preserving cash while maintaining its core commercial and research capabilities.

Could Medicare Re-Coverage Become a Major Turning Point for Pacific Edge?

Pacific Edge believes it may be approaching a major commercial milestone as US Medicare contractor Novitas is expected to release a draft Local Coverage Determination (LCD) for hematuria evaluation before September 2026. The company expects the proposed policy could include coverage for its Cxbladder Triage and potentially Triage Plus tests. If approved, the new Medicare coverage could significantly improve reimbursement prospects, boost revenues, and help reduce cash burn. Management believes positive Medicare policy changes would also improve adoption among commercial insurers and strengthen Pacific Edge’s Leadership position in bladder cancer diagnostics. The capital raise is intended to ensure the company has sufficient financial flexibility to Capitalize on this potential opportunity.