Novatis said the cancer test was "not considered medically reasonable and necessary". Photo: Supplied / Pacific Edge
Bladder cancer diagnostics company Pacific Edge says the dice was loaded against it following the news its CX Bladder test will no longer be covered by US Medicare provider, Novatis, which sent the former's shareprice plunging.
Novatis has pulled Medicare health insurance reimbursement for the cancer test, which it said was "not considered medically reasonable and necessary", from 17 July.
The Dunedin-based company sought and was given a halt in the trading of its shares as it digested the news yesterday, with the US sales of the CX test accounting for around two-thirds of Pacific Edge's income.
The company shares slumped 86 percent in early trading to a low of 5 cents before it regained some lost ground to settle 69 percent lower at 15.2 cents a share.
Chief executive Dr Peter Meintjes said the company was "surprised and disappointed" at the news, and said the determination appeared to materially misunderstand the role biomarkers can play in diagnosing early-stage patients.
"While Novitas appears to have reviewed all available evidence for Cxbladder, we believe that Novitas' analysis has sought to predominantly emphasise negative comments in Cxbladder publications," he said.
"We believe that focusing predominantly on only negative comments likely mischaracterises issues or confounding factors with our evidence that were addressed in subsequent publications and routine commercial testing, while also dismissing the support Cxbladder receives from key opinion leading urologists, and the US patient advocacy group BCAN [Bladder Cancer Advocacy Network]."
Meintjes said the record growth in Cxbladder testing over the past two years proved that many urologists viewed the tests as worthwhile.
He said the company was exploring its available legal options, including a potential appeal.
The decision meant Pacific Edge's revenue would reduce substantially from its current levels until the tests regained coverage, Meintjes said.
Medicare's coverage accounted for 77 percent of its total operating revenue in 2023, generating $15.3 million, he said.
However, Pacific Edge's chairman Chris Gallaher was optimistic about the company's prospects.
"Pacific Edge is well funded with cash and cash equivalents and short-term deposits of $77.8 million at the end of March 2023," he said.
"Despite this current setback, the company believes that it can still deliver on the significant opportunities we see for Cxbladder in the US and around the world."