Pacific Edge shares fall on risk of losing ‘significant’ revenue stream

Pacific Edge could see its cancer screening tests scrapped by a major US health insurance company that is considering a new way to choose which tests are covered.

Health insurance provider Novitas currently reimburses the use of
Cxbladder but would not be under a new process it has proposed.

Currently, the health insurer reviews clinical evidence for each individual product, but has proposed relying on third-party lists instead.

Pacific Edge said that if the proposal passes, Cxbladder would no longer receive reimbursement from Novitas, which represents “a significant portion” of current testing revenue.

The company’s shares almost halved when the trading halt was lifted at the market open, falling 48% to just 40 cents – their lowest price since 2020.

In a statement to NZX, the company said it believes the proposed changes are unlikely to survive an ongoing review process in their current form.

“The consensus we received was that the proposed changes to the LCD [local coverage determinations] are contrary to US legal requirements and precedents,” he said.

Medicare LCDs are formal determinations of whether a particular item or treatment is covered in that provider’s jurisdiction. The proposed LCD specifically excludes Cxbladder.

Novitas has jurisdiction over the Pacific Edge lab in Pennsylvania and provides coverage in 11 states.

Since Cxbladder gained coverage in 2020, Pacific Edge has received reimbursement for over 10,000 tests.

The test has also been adopted by some of the largest integrated care networks in the United States and has been incorporated into their clinical treatment guidelines, he said.

Repel

Pacific Edge chief executive Peter Meintjes said the company would advocate for changes to the proposal to ensure continued coverage for its non-intrusive cancer test.

“We welcome the broader initiative to simplify and streamline the coverage process. However, given the explicit prior coverage and payment history for Cxbladder testing, we have presented our initial concerns to Novitas,” did he declare.

The society also encourages clinicians who use the tests to back up their case. Novitas consults the public on proposals until September 6 and generally must confirm or withdraw an LCD project within one year of the public comment period.

Pacific Edge President Chris Gallaher said the company remains well capitalized and able to pursue its long-term goals.

– Business office