Pacific Edge Advances with Draft Medicare Coverage for Cxbladder Tests Targeting $10.2 Billion Market

Draft Medicare Coverage Signals Major Commercial Breakthrough

Pacific Edge (ASX:PEB, NZX:PEB) is on the cusp of a significant commercial inflection point with the May 2026 draft Local Coverage Determination (LCD) from Medicare contractor Novitas proposing coverage for its Cxbladder Triage and Triage Plus bladder cancer diagnostic tests. This draft policy, expected to be finalised by the end of 2026, would make these the only urine-based biomarkers reimbursable by Medicare for hematuria evaluation, a validation of Pacific Edge’s evidence-led strategy and a gateway to a US$10.2 billion global market opportunity.

Chairman Simon Flood, who assumed his role late last year, described the draft LCD as a "company-defining milestone" and a "hard-won recognition" of years of clinical and commercial groundwork. The coverage would provide a clearer reimbursement pathway, legitimising Cxbladder as the leader in non-invasive bladder cancer diagnostics and enabling the company to rebuild sales momentum in the US, its largest market.

Financial Impact of Medicare Non-Coverage and Strategic Response

FY26 financials reflected the drag of Medicare’s non-coverage period, with operating revenue falling 23.8% to NZ$11.5 million and net loss after tax increasing 19.5%. Commercial test volumes declined, particularly in the US, where a 27.7% drop in the second half was recorded. However, Pacific Edge managed to reduce its monthly cash burn to NZ$2.4 million in 2H26 through disciplined expense management and targeted sales force adjustments.

Supporting the company’s growth ambitions, a post-balance date capital raise of NZ$36.1 million was completed to strengthen the balance sheet and fuel revenue growth initiatives. The company is also focused on shifting its product mix toward Triage Plus, which commands a higher Medicare pricing of US$1,328 per test compared to US$760 for the original Triage, promising improved unit economics and margins.

Expanding Commercial Payer Momentum and Market Reach

Beyond Medicare, Pacific Edge is building commercial payer support in the US, with medical policies covering 10.5 million lives now in place. The company targets integrated delivery networks (IDNs), hospital systems, and large urology practices, focusing on intermediate-risk microhematuria patients, a segment where women predominate and which represents a significant volume opportunity.

In the Asia Pacific region, operations are advancing steadily toward profitability on a direct cost basis, contributing 19% of operating revenue in 2H26. The company is also developing kitted in vitro diagnostic (IVD) versions of its tests for international markets, aiming to decentralise testing and expand access beyond its CLIA-certified labs in New Zealand and the US.

Robust Clinical Evidence Pipeline Supports Long-Term Growth

Pacific Edge’s clinical evidence program remains a cornerstone of its strategy. The company has published over 30 peer-reviewed studies supporting Cxbladder’s analytical validity, clinical validity, and clinical utility. The American Urological Association’s inclusion of Cxbladder Triage in its 2025 Microhematuria Guideline with a Grade A evidence rating underscores its clinical acceptance.

Several ongoing and planned studies, including STRATA, DRIVE, AUSSIE, microDRIVE, and LOBSTER, aim to refine risk stratification thresholds and expand the serviceable market. Investigator-initiated trials at institutions like Kaiser Permanente and Mayo Clinic further validate real-world utility and patient satisfaction, enhancing payer and clinician confidence.

Board Resolutions and Governance Updates

The Annual Shareholders Meeting also ratified key governance matters, including the re-election of director Bryan Williams and the election of Simon Flood as Chair. Shareholders approved the issue of over 212 million shares related to recent placements and retail offers, reinforcing the company’s capital position for its next growth phase.

Pacific Edge’s leadership emphasised ongoing transparency and disciplined execution as critical to converting the draft LCD and clinical momentum into sustainable commercial success. The company’s pathway includes expanding Medicare and commercial coverage, advancing next-generation products like Surveillance Plus, and pursuing international regulatory approvals for IVD products.