Pacific Edge’s Revenue Halves to $5.9M Amid Medicare Coverage Loss
Pacific Edge reports a $19.1 million net loss for the first half of FY26 amid Medicare coverage loss but positions itself for a Medicare-led recovery with strong clinical evidence and a key advisory committee meeting set for February 2026.
- Operating revenue down 46% to $5.9 million due to Medicare non-coverage
- Net loss widens to $19.1 million as company invests in Medicare appeals and strategic positioning
- Contractor Advisory Committee convened by Novitas in February 2026 to review coverage
- CMS draft pricing for next-gen Triage Plus test set at $1,328, a 75% premium
- Company raised $20.7 million in August 2025 to support operations amid extended coverage delays
Financial Impact of Medicare Coverage Loss
Pacific Edge Limited, a global leader in bladder cancer diagnostics, has revealed its unaudited financial results for the six months ending 30 September 2025, reporting a net loss after tax of NZD 19.1 million. This represents a 32% increase in losses compared to the previous half-year period, largely driven by the loss of Medicare coverage for its flagship Cxbladder tests in the United States.
Operating revenue fell sharply by 46% to NZD 5.9 million, reflecting the immediate impact of Medicare’s non-coverage decision effective from April 2025. The company’s total laboratory throughput also declined by 10.1%, with commercial test volumes down 15.9%, underscoring the challenges faced in the US market where Medicare reimbursement historically accounted for about 60% of revenue.
Strategic Positioning for Medicare Reinstatement
Despite these setbacks, Pacific Edge is actively pursuing a Medicare-led recovery. The company is engaged in an appeals process for denied Medicare claims, a path expected to delay revenue recognition by 6 to 9 months. A pivotal moment is anticipated with the convening of a Contractor Advisory Committee (CAC) by Novitas, the Medicare Administrative Contractor, scheduled for 19 February 2026. This expert panel will review the clinical evidence supporting urine-based biomarkers like Cxbladder for hematuria evaluation, potentially leading to revised Medicare policy and reinstatement of coverage.
Pacific Edge has bolstered its clinical evidence portfolio with key publications, including the analytical and clinical validation of its next-generation test, Cxbladder Triage Plus, and expects further real-world evidence studies to be presented to the CAC. The American Urological Association’s (AUA) updated microhematuria guideline, which now supports the use of urine biomarkers, strengthens the company’s case for Medicare coverage.
Enhanced Pricing and Market Opportunity
Adding to the positive outlook, the Centers for Medicare and Medicaid Services (CMS) has set a draft price of US$1,328 for the Triage Plus test, a 75% increase over the previous US$760 price for existing tests. This pricing adjustment significantly enhances the long-term economics for Pacific Edge and expands the global addressable market to an estimated US$10.8 billion.
Commercial operations have been streamlined to focus on the most profitable territories and non-Medicare revenue streams, including partnerships with Kaiser Permanente and expansion in the Asia-Pacific region. The company also continues to develop its next-generation Surveillance Plus test for bladder cancer recurrence monitoring, aiming for further clinical validation and reimbursement pathways.
Capital and Cash Flow Management Amid Uncertainty
To support its strategic initiatives and navigate the extended Medicare re-coverage timeline, Pacific Edge successfully raised NZD 20.7 million in August 2025. Cash and cash equivalents stood at NZD 22.1 million at the end of September 2025, relatively stable compared to the prior period. However, net cash outflows from operating activities increased to NZD 19.0 million, reflecting the revenue decline and ongoing investment in positioning for Medicare appeals success.
The board acknowledges the pressure on capital due to delayed coverage but remains confident in the company’s ability to secure additional funding or implement cost reductions as needed. The company is actively considering various capital initiatives to ensure sustainability until Medicare coverage is restored.
Outlook and Market Implications
Pacific Edge’s management emphasizes the importance of the upcoming CAC meeting as a critical catalyst for Medicare policy change. While the timing of coverage reinstatement remains uncertain, the company’s strengthened clinical evidence, favorable pricing, and strategic focus on profitable markets position it well for accelerated growth once Medicare recognition is achieved.
Investors should watch closely for the outcomes of the Medicare appeals process and the CAC deliberations, which will be highly indicative of the company’s near-term revenue trajectory and long-term market potential.
Bottom Line?
Pacific Edge’s path to Medicare re-coverage is fraught with timing uncertainties, but its robust clinical evidence and strategic capital raise set the stage for a potential turnaround in 2026.
Questions in the middle?
- Will the Contractor Advisory Committee’s February 2026 meeting lead to a swift reinstatement of Medicare coverage?
- How successful will Pacific Edge’s Medicare appeals be in recovering unpaid claims and restoring revenue recognition?
- What capital initiatives or cost management strategies will the company implement if Medicare re-coverage delays extend further?
