Shares in cancer diagnostics company Pacific Edge rise after Medicare coverage of tests

Shares in Dunedin-based cancer diagnostics company Pacific Edge have risen by 8 percent after it announced Friday morning that its cancer-marker urine tests had been granted Medicare coverage in the United States.

Its Triage and Triage Plus tests are reimbursed at between US$1057 and US$1328, and the company estimates there are about 1.14 million eligible testing opportunities a year.

That represents an addressable testing opportunity worth well over US$1 billion annually, although Pacific Edge would capture only a proportion of that market.

Pacific Edge's Cxbladder tests use a non-invasive urine sample to help doctors assess a patient's risk of bladder cancer and make better-informed decisions about whether a cystoscopy is needed.

Pacific Edge chief executive Peter Meintjes said the decision was a "significant milestone" for the company, patients and urologists.

"It provides clear guidance on the eligible haematuria patients for which Triage and Triage Plus should be reimbursed," he said.

Meintjes said the decision also gave Pacific Edge an important competitive advantage.

"The LCD confirms Pacific Edge as the market leader, with only Triage and Triage Plus tests covered under the policy."

The new coverage policy takes effect on 20 December, with competing tests and generic billing codes not covered.

That gives the company a potentially important advantage as it tries to increase the number of US urologists using its tests.

More than 5,000 US urologists have already ordered more than 130,000 Cxbladder tests, but the company says established Medicare coverage removes a reimbursement obstacle that had made some doctors reluctant to order them.

Medicare covers more than 71 million people in the US, although the company believes the decision could also help it secure greater coverage from commercial insurers, which collectively cover about 223 million people.

Pacific Edge says it is making selective investments in its US commercial team and digital technology as it prepares to take advantage of the expanded market opportunity.

Friday's 8 percent share price rise follows a 9 percent gain on Thursday.