Full Year Results Presentation For the twelve months to 31 March 2017 24 May 2017
FY17 MILESTONES Significant Progress Achieved Joint analysis of Kaiser Permanente study completed with positive and compelling results Approved provider to Official US launch of TRICARE Cxbladder Monitor APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR Cxbladder Monitor MTANZ Award Insurance coverage NZ Launch Cxbladder presentation at AUA winner with nib Resolve Insurance coverage Added to standard of Official launch of Successful $8m share with Sovereign care for Waitemata DHB bladdercancer.me site placement Named in TIN100 Top Ten Hot Emerging Companies Slide 2 Pacific Edge 2017 Full Year Results Presentation
FY17 HIGHLIGHTS Significant commercial progress being made; Continued sales growth expected in FY18 Significant progress Increasing adoption by Multiple clinical studies and Expanded suite of achieved with healthcare providers and papers validating the superior Cxbladder tests transformational large scale insurers performance of Cxbladder customers Insurance coverage by nib Presentations/publications: Official launch of In contract with VA and by S overeign in New American Urological Cxbladder Monitor in Zealand Association 2016 Conference the US in December In contract with TRICARE 2016 American Journal of Urology Added to Standard of Care Urological Oncology Completed Kaiser for Waitemata DHB Launch of fourth Advances in Therapy Permanente User product, Cxbladder Programme and now in Added to Standard of Care Resolve, in New Zealand commercial discussions for Canterbury DHB in December 2016 Urology specific media Genome Web Well progressed with CMS Urology Times regulatory process Slide 3 Pacific Edge 2017 Full Year Results Presentation
FY17 REVENUE 62% Uplift in Product Sales OPERATING REVENUE In the past four years, operating revenue has grown from Positive growth in product sales from new and existing customers, 10 $150,000 to $8.1 million particularly in North America. 62% increase 8 in operating 6 FY17 excludes any revenue from transformational customers. revenue NZ$Million 4 compared to the Other revenue includes funding from Callaghan Innovation Grant, previous year 2 with an additional $3m grant received in March 2017, to be spread 0 over two years. FY15 FY16 FY17 IH Op Revenue 2H Op Revenue Total Revenue LABORATORY THROUGHPUT FY17 FY16 Change NZ$(000) NZ$(000) (%) Includes User Programmes and commercial tests 12000 Operating Revenue 8,062 4,976 62% 10000 35% increase 8000 Other revenue 1,473 2,217 in test throughput 6000 Total Revenue 9,535 7,193 33% compared to the 4000 previous year 2000 0 FY14 FY15 FY16 FY17 1H 2H Six month financial reporting period Slide 4 Pacific Edge 2017 Full Year Results Presentation
FY16: FY17 REVENUE BRIDGE REVENUE GROWTH Positive growth in product sales: No contribution yet +62% from new large scale customers – VA and TRICARE FX, Interest, Grant FY17 sales restrained by: Other funding Timing of commercialisation of scale customers • Timing of launch of new products in the US • Operating Political uncertainty in the US which negatively • Revenue impacted on the wider healthcare sector in the Growth US in the second half of the year. Changes in Callaghan Innovation Growth Grant scheme means that international investment in R&D is no longer claimable FY16 FY17 Slide 5 Pacific Edge 2017 Full Year Results Presentation
FY17 INVESTMENT INTO GROWTH FY1 FY17 FY16 FY1 % Change % OPERATING EXPENSES $NZ’000 $N 000 $NZ’000 $N 000 9,535 7,193 TO TOTAL REVENUE 33% 33% Continued investment into four strategic areas: People – expanded sales team from 12 to 18 sales executives • Laboratory Expenses 996 1,047 Products – development and launch of Cxbladder Resolve • Market expansion – investment into South East Asia and US • Research 4,908 4,442 Intellectual Property • Sales and Marketing 1,923 1,021 Expenses include non-cash, non-recurring expense of $2.9m in relation to the wind up of the Employee Incentive Scheme Other 16,517 16,358 Conservative approach taken to bad debt provisioning To Total Recurring Operating 24,342 22,870 6% 6% Ex Expendit iture Operating revenue outgrowing expenses: Bad and Doubtful Debts 3,248 - Operating Revenue +62%; Operating Expenses +6% Expenditure Note: Operating Expenses compared on a like-for-like basis Wind up of Employee Incentive 2,925 - Overall, Pacific Edge repor Ov orted a $21.0 million on los oss for or the year, in Scheme (non-cash) line lin e wit ith growth strateg egy an and man manag agemen ement expec ectatio ions. (21,048) (15,453) NE NET (L (LOSS) ) BEFORE TAX 36% 36% Slide 6 Pacific Edge 2017 Full Year Results Presentation
FY17 CASHFLOW NET OPERATING CASHFLOW NE NET OPERATING NG CASHFLOWS FY1 FY17 FY1 FY16 $N $NZ’000 000 $NZ’000 $N 000 Net operating cashflow at a similar level to the previous Receipts from customers and grant providers 7,864 3,648 year Interest received 732 319 116% increase in receipts from customers and grant Payments to suppliers and employees 26,458 20,908 income compared to FY17, offsetting the higher FY17 Net GST change (25) 12 expenses NE NET CA CASH FLOWS FROM OPE PERATING (17,837) (16,952) AC ACTIVITIES Slide 7 Pacific Edge 2017 Full Year Results Presentation
FY17 FINANCIAL POSITION – BALANCE SHEET Debt free – Shareholder Capital the Main Source of Funding For Growth FY17 FY1 FY1 FY16 Cash and cash equivalents $14.6 million as at 31 $NZ’000 $N 000 $NZ’000 $N 000 March 2017 Cash, Cash Equivalents and Short 14,564 24,160 Term Deposits Debt free with funding from sales revenue, shareholder capital and technology grants for new Trade Receivables, Inventory and 7,833 6,933 product development, commercialisation and Other Current Assets investigation into South East Asia Property, Plant and Equipment 837 990 Intangible Assets 329 248 Successful $8.75 million share placement to institutional and other investors completed in Total Assets 23,563 32,331 February 2017 Payables and Accruals 2,734 2,523 Funds are being invested into commercial growth Total Liabilities 2,734 2,523 as the company works towards attaining a cashflow Equity 20,829 29,807 positive position. Slide 8 Pacific Edge 2017 Full Year Results Presentation
Incidence ranking for the USA Pacific Edge 2017 Full Year Results Presentation
CXBLADDER NOW DOMINATES THE CLINICAL PATHWAY Pacific Edge is the only company in the world to offer a suite of proprietary molecular diagnostic tests for bladder cancer, from assessment and detection to management and monitoring for recurrence of the disease • Delivering innovative solutions for the early detection and better management of bladder cancer • Four products serving multiple clinical needs, across the haematuria and bladder cancer clinical pathways • Provides a huge opportunity and significant competitive advantage for Pacific Edge • Cxbladder leading to a step change in the clinical pathways for haematuria and bladder cancer • Benefits: Accurate, Non-invasive, Simple to Use, Cost Effective • Primary market is the US, the world’s largest healthcare market. • Four main areas of investment - People, Intellectual Property, Market Expansion and Product Development Slide 10 Pacific Edge 2017 Full Year Results Presentation
TARGET MARKETS Slide 11 Pacific Edge 2017 Full Year Results Presentation
MARKETS Growing adoption of Cxbladder Tr Transformational clients Na Nation onal Pr Provider Networks Private Insurance Pr Pr Providers Adopti Ad ption by by Distr trict t Health th (U (Unit ited ed States es) (Unit (U ited ed States es) (New Zealan (N ealand) ) Bo Boards s (New Zealand) Veterans Administration – In Stratose Sovereign Insurance Bay of Plenty and Lakes contract FedMed Nib health insurance Canterbury TRICARE – In contract America’s Choice Provider Waitemata Kaiser Permanente – In Network commercial discussions MultiPlan CMS – Well progressed in regulatory process Slide 12 Pacific Edge 2017 Full Year Results Presentation
MARKETS US Remains the Primary Focus United States: The world’s largest FY17 OBJECTIVES AND PROGRESS: US Remains the Primary Focus healthcare market COMPLETED √ 18 sales executives focused on 19 targeted sales regions CO Over 11,000 urologists and millions of potential clinical opportunities for use COMPLETED √ Identified Veterans Administration (VA), TRICARE, Kaiser CO of Cxbladder products Permanente and Centres for Medicare and Medicaid as transformational large scale customers COMPLETED √ In contract and agreed pricing with VA and TRICARE In Progress In commercial discussions with Kaiser Permanente; Well progressed in CMS regulatory process Ongoing Large Urology Group practices - Key target for scale sales, now moving at pace, sales are starting to meet company expectations Ongoing Primary focus on establishing new User Programmes with large institutional customers as we build momentum Ongoing Transitioning existing User Programmes to commercial customers Slide 13 Pacific Edge 2017 Full Year Results Presentation
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