Medicare Coverage Loss Forces Pacific Edge into NZ$20M Capital Raise to Sustain Operations
Pacific Edge Limited has launched a NZ$20 million capital raise to bolster its cash reserves amid the loss of Medicare coverage for its bladder cancer diagnostic tests, aiming to accelerate US market adoption and support new product development.
- NZ$20 million capital raise via NZ$15 million placement and NZ$5 million retail offer
- Share price set at NZ$0.10, a premium to recent trading levels
- Medicare coverage ceased in April 2025, impacting majority of US revenue
- Funds to extend cash runway beyond 12 months and support Medicare re-coverage efforts
- Focus on accelerating US adoption of Cxbladder Triage and advancing new diagnostic products
Capital Raise to Navigate Medicare Setback
Pacific Edge Limited (NZX/ASX: PEB), a New Zealand-based cancer diagnostics company, announced a NZ$20 million capital raising initiative designed to strengthen its financial position following the loss of Medicare coverage for its flagship bladder cancer tests. The raise comprises a NZ$15 million placement to selected investors and a NZ$5 million share purchase plan for existing shareholders, priced at NZ$0.10 per share, a premium to recent market prices.
The cessation of Medicare reimbursement in April 2025 represents a significant challenge, as Medicare had accounted for approximately 61% of the company’s US revenue. Pacific Edge is actively pursuing reconsideration and appeals processes, leveraging new clinical evidence and the recent inclusion of its Cxbladder Triage test in the American Urological Association’s (AUA) 2025 microhematuria guideline, which provides strong clinical validation and a potential pathway back to coverage.
Strategic Focus on Growth and Innovation
The capital raised will extend Pacific Edge’s cash runway to support operations for over 12 months without Medicare reimbursement, allowing the company to maintain momentum in non-Medicare channels such as Kaiser Permanente and private payers. The funds will also accelerate the adoption of Cxbladder Triage in the US, where it is now the only urine-based biomarker test with ‘Grade A’ evidence per the AUA guideline.
Beyond immediate reimbursement challenges, Pacific Edge plans to continue clinical evidence generation for its next-generation products, Triage Plus and Monitor Plus, within a rigorous analytical and clinical validation framework. The company is also investing in the development of in-vitro diagnostic (IVD) kits to facilitate international market expansion through decentralized testing models.
Operational Resilience and Market Position
Despite the Medicare setback, Pacific Edge reported resilient financial performance for the fiscal year ending March 2025. Operational efficiencies have improved, with a leaner US sales force delivering higher sales productivity and increased average sales prices. The company’s strong relationships with key partners, including Kaiser Permanente, continue to validate the clinical utility of its tests and support ongoing growth in non-Medicare segments.
Pacific Edge’s management and board have signaled their confidence by participating in the equity raise, underscoring their commitment to the company’s strategic direction. Shareholder approval and regulatory consents remain prerequisites for completing the placement, with allotment expected by mid-August 2025.
Outlook Amid Uncertainties
While the capital raise provides a vital financial buffer, the timing and success of Medicare reconsideration remain uncertain. The company’s ability to regain coverage will be critical to unlocking the full commercial potential of its products and achieving profitability. Meanwhile, Pacific Edge is leveraging its clinical evidence and guideline endorsements to expand adoption and reimbursement in other markets, including Asia Pacific and international territories.
Bottom Line?
Pacific Edge’s capital raise buys time and fuels growth, but Medicare’s reimbursement decision will be the defining test ahead.
Questions in the middle?
- How quickly will Medicare reconsideration and appeals restore coverage for Cxbladder tests?
- What impact will the capital raise have on Pacific Edge’s share price and investor confidence?
- Can Pacific Edge’s new IVD product strategy successfully expand its international market footprint?