Pacific Edge Enters Medicare Draft Coverage Pathway With Triage Plus
Pacific Edge returns to Medicare coverage pathway as FY26 results reflect a year of disruption
Pacific Edge (ASX: PEB) has released audited financial results for the year ended 31 March 2026, with the headline news arriving post-balance date: Novitas, the Medicare Administrative Contractor responsible for the company’s US laboratory, published draft Local Coverage Determination (LCD) DL40378 titled ‘Urine-based Biomarkers in Patients with Microhematuria’ on 14 May 2026. The draft proposes Cxbladder Triage and Triage Plus as the only urine-based biomarkers eligible for Medicare reimbursement, establishing hematuria evaluation as a covered Medicare benefit for the first time.
Novitas has further confirmed that Pacific Edge can commence claim-by-claim reimbursement for intermediate risk microhematuria patients in alignment with the draft LCD, meaning revenue-generating activity is already underway ahead of finalisation.
The audited FY26 financials reflect the full impact of Medicare non-coverage from 24 April 2025 and are largely unchanged from the unaudited results announced 11 May 2026. Key metrics for the period are summarised below:
- Operating revenue: $11.5 million (FY25: $21.8 million), down 47.4%
- Total revenue: $13.6 million (FY25: $24.6 million), down 44.8%
- Net loss after tax: $35.8 million (FY25: $29.9 million)
- Total Laboratory Throughput (TLT): 24,190 tests, down 16.3%
- Commercial tests: 18,783, down 23.8%
- Cash at 31 March 2026: $7.8 million
Chairman Simon Flood
“Pacific Edge exits the year in a materially stronger strategic position than it entered it. The long-term opportunity ahead for Cxbladder has been reinforced by the quality of the company’s clinical evidence, the strength of support expressed at the Novitas-convened Contractor Advisory Committee in February 2026, the growing recognition from commercial payers, the early wins in APAC and now the draft LCD.”
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Why the draft Medicare LCD matters for Pacific Edge investors
A Local Coverage Determination (LCD) is a written policy issued by a Medicare Administrative Contractor that defines whether a medical product or test is considered “reasonable and necessary” for Medicare reimbursement. For Pacific Edge, LCD coverage is the primary gating mechanism for US revenue: without it, Medicare and many Medicare-aligned commercial payers will not reimburse for Cxbladder tests. Reinstatement of coverage through the draft LCD pathway therefore directly determines the company’s ability to recover its US revenue base.
The process toward final coverage follows a structured regulatory timeline:
- 14 May 2026 — Novitas publishes draft LCD DL40378; the notice and comment period begins
- 6 June 2026 — The formal notice and comment period opens
- 18 July 2026 — The notice and comment period closes
- By 15 May 2027 — Novitas must finalise or withdraw the LCD (365 days from draft publication)
- End of 2026 calendar year — Pacific Edge’s current estimate for final effective coverage
- 45 days after final publication — The finalised LCD becomes effective
Importantly, Pacific Edge has been advised that claim-by-claim reimbursement is appropriate for intermediate risk microhematuria patients during the draft period, in line with DL40378. This means the company is generating reimbursable test activity now, before the LCD is finalised.
Triage Plus pricing changes the economics
The inclusion of Cxbladder Triage Plus in the draft LCD carries strategic significance well beyond coverage reinstatement. Triage Plus is priced at US$1,328 per test, a 75% premium over the US$760 Medicare price applicable to the legacy Cxbladder products, Triage and Monitor.
No other urine-based biomarkers are included in the draft LCD, creating a competitive moat around Pacific Edge’s hematuria business. The higher price per test materially improves the unit economics of operating the US sales team and is expected to accelerate the company’s path to profitability.
Commercial payer momentum building independently
Final Medicare coverage is also expected to unlock additional commercial payer volumes. Many commercial payers follow Medicare policy or are required to reimburse for Medicare-covered tests under state biomarker laws, which mandate payment from commercial insurers for tests that receive Medicare approval.
Pacific Edge confirmed a number of positive commercial payer policy wins during FY26:
- Sentara: Cxbladder Triage covered
- BCBS North Carolina and South Carolina: Cxbladder Triage covered
- BCBS Kansas City Missouri: Cxbladder Triage covered
- Highmark: Cxbladder Monitor covered for surveillance
- Collective commercial coverage now at 12.0 million lives (including Kaiser SoCal)
FY26 financial performance — managing through disruption
The FY26 result reflects a structurally difficult year caused by the loss of Medicare coverage, which previously accounted for approximately 56% of operating revenue in FY25. Management responded with disciplined cost reduction measures across the business.
| Metric | FY26 | FY25 | Change |
|---|---|---|---|
| Operating revenue | $11.5m | $21.8m | -47.4% |
| Total revenue | $13.6m | $24.6m | -44.8% |
| Operating expenses | $49.4m | $54.6m | -9.5% |
| Net loss after tax | $35.8m | $29.9m | +19.5% |
| Monthly cash burn (2H26 avg) | $2.4m | — | -27.7% vs 1H26 |
| Cash at period end | $7.8m | $22.6m | -65.5% |
Cost reduction and cash preservation
Management implemented a series of cost and capital preservation measures across the year, with the second half showing meaningful improvement over the first.
- Total operating expenses down 9.5% year-on-year
- Sales and Marketing expenses down 13.2%, reflecting a reduction in the US sales force
- 2H26 average monthly cash burn of $2.4 million, down from $3.3 million in 1H26
- 2H26 net loss of $16.7 million, lower than the $19.1 million recorded in 1H26
- FY27 target average monthly cash burn: NZ$2.5 million
It is important to note that operating revenue was not accrued for Medicare tests during FY26 while Pacific Edge pursued its appeals strategy. This is a revenue recognition accounting treatment, not a reflection of cash collected.
Capital raises strengthen the balance sheet
Two separate capital raise transactions have been executed to support the company’s recovery and growth strategy:
- Placement (Transaction 1): NZ$25.4 million raised at NZ$0.17 per share, closed 12 May 2026 (oversubscribed; original target was NZ$18.0 million)
- Retail Offer / SPP (Transaction 2): Up to NZ$6 million at NZ$0.17 per share, closes 28 May 2026; Pacific Edge has discretion to accept oversubscriptions
- Combined target: approximately NZ$31.4 million
Proceeds are intended to support ongoing operations, commercial execution following the draft LCD, evidence generation, and product development.
Chief Executive Dr Peter Meintjes
“We have proactively managed our capital, balancing cash preservation with protecting core assets to preserve our ability to scale commercially and with the draft LCD published, we are now focusing on commercial execution. Supported by the equity raised in May, our team — now stronger after several years of adversity — are focused on achieving the company’s long-standing potential.”
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What comes next — commercial, clinical and innovation milestones
Management has outlined a set of near-term and medium-term priorities for FY27, focused on translating the draft LCD into revenue recovery and advancing the next generation of Cxbladder products.
Near-term commercial focus
The immediate commercial agenda centres on converting the draft LCD into test volume and revenue growth:
- Leverage claim-by-claim reimbursement now available for intermediate risk microhematuria patients under the draft LCD
- Progressively phase US customers to Triage Plus at US$1,328 per test
- Implement Electronic Medical Records (EMR) integrations at qualified institutions to streamline test ordering and results delivery
- Advance medical policy with commercial payers, leveraging the draft LCD, AUA Guideline, ECRI review and Avalon policy
Innovation pipeline
Pacific Edge is also advancing Cxbladder Surveillance Plus, its next-generation test for the surveillance of bladder cancer recurrence in non-muscle invasive bladder cancer (NMIBC) patients:
- Pacific Edge is targeting CPT-PLA code submission for Surveillance Plus by 9 December 2026
- Claim-by-claim reimbursement is targeted from July 2027, once Novitas adds the code
- Provisional pricing of US$1,800 per test has been sought, though this has not yet been priced by Medicare and should not be taken as confirmed
- The LOBSTER study is expected to clinically validate Surveillance Plus, with publication targeted for Q2 2027
Pacific Edge is also pursuing inclusion of Triage Plus in the next iteration of the American Urological Association (AUA) microhematuria guideline, supported by the published DRIVE study.
On a regional note, APAC commercial and clinical operations (excluding R&D) are trending toward profitability on a direct cost basis. FY26 APAC cash burn was $0.6 million, representing an approximately 40% improvement on FY25, with APAC revenue contributing 19% of operating revenue in the second half of FY26.
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