Pacific Edge Limited (PEB) Earnings Call Transcript & Summary

Good afternoon, everybody, and welcome to the Pacific Edge 2020 Annual Shareholders' Meeting. I'm Chris Gallaher, the Chairman of the Pacific Edge Board of Directors. And I'm coming to you virtually from Melbourne in the once-great state of Victoria, and I wish [indiscernible] right now. This year, we took the decision to hold our annual meeting virtually for a number of reasons. A number of our directors are based overseas in Australia and the U.S.A. and therefore can't attend in person. And many of our shareholders are understandably reluctant to travel in these COVID-19 times. We have heard positive feedback from shareholders previously on their ability to participate in the annual meeting online and believe that the platform we have will allow for participation and engagement among our shareholders and your directors. Your Board has been meeting virtually now since March, and while we all miss the personal interaction, our Zoom meetings have been effective and cost efficient. This meeting -- this format may be new to some of you. If you encounter any issues, please refer to the virtual meeting online help guide. You can find the help line 0800-200-220. Before starting the meeting today, I would like to introduce my fellow directors. Firstly, coming in from San Francisco, we have David Levison; Bryan Williams and myself in Melbourne. Sarah Park and Anatole Masfen are in the Hawke's Bay and Auckland, prospectively. And Dave Darling, our Chief Executive Officer, is in Dunedin. Also in attendance in Dunedin is our Chief Financial Officer, Grant Gibson; our legal advisers, Anderson Lloyd; and Pacific Edge's auditors, PricewaterhouseCoopers. Other members of the senior leadership team are also joining the meeting online, and we also welcome other staff members who are joining us today. Turning now to the meeting agenda. Following my opening address, we will hear from our Chief Executive, Dave Darling, before then moving to shareholder discussion, followed by voting on the resolutions. Questions will be taken through the vital meeting website, and I encourage shareholders who have questions to send them through as soon as you're able. There will be an opportunity for you to ask questions on each resolution before it's put to the vote. Voting on all resolutions will be by way of poll. Shareholders will be able to cast their vote using the electronic voting [ canvassing when ] online registration is validated. Please refer to the virtual meeting online portal guide or use the help line specified. I can advise that proxies have been received in respect of 314 million shares, which represent approximately 43% of our issued capital. As I -- indicated in the proxy form, I intend to vote all undirected proxies that I have received as Chairman in favor of the resolutions before the meeting. The results of the proxies will be displayed following the meeting. And following the voting on resolutions, we will be happy to take any general questions that you may have in relation to our company and its operations. I hereby declare that quorum is present and that the meeting has been duly convened. The notice of meeting, which includes the explanatory notes, has been circulated to all shareholders, and I do intend to take that as read. The audited financial statements for the year ended 31 March 2020 were released on the 29th of May and included in the annual report. There will be a recording of today's meeting made and available on our website at the conclusion of the meeting. Moving then to my address and looking at the journey that Pacific Edge has been on over the last 15 years. Staying the course over a long period of time and in the face of adversity and continuing to believe that what you are doing will make a difference is a testament to the commitment and resilience of Dave Darling and his management team over a 15-year period. We have been delighted in the last 2 months to have successfully achieved 2 of our most significant commercial milestones, namely the reaching agreement with Kaiser Permanente to use our tests, and Kaiser is one of the U.S.' largest and best-regarded health care providers; and receiving inclusion in a local coverage determination, which was the final step needed to gain national reimbursement in U.S.A. Coverage under the LCD enables reimbursement from the centers for Medicare and Medicaid, known as the CMS, for 2 of our Cxbladder products. CMS patients represent approximately 40% of all of our Cxbladder commercial sales in the U.S., and we expect to increase this steadily as we progress over the next 12 months. In addition, we will be negotiating for payment on the historical 22,000 invoices that we have submitted to the CMS prior to receiving the LCD and for which we have not been paid. Securing a significant proportion of these funds is important to the company and our shareholders, as it will provide us with additional capital to support the execution of our U.S. commercial plans and develop the next horizons of growth for your company. The LCD inclusion is also expected to positively impact on demand and reimbursement decisions from other health care organizations and payers as well. Thirdly, we -- I want to talk about the ANZ investment. The achievement of both the Kaiser Permanente and the LCD milestones were the triggers for ANZ Investments to approach the company and offer to invest $22 million at a 14% premium to the prevailing share price. This is a real financial vote of confidence in the company and its prospects by a substantial and reputable New Zealand institution and has enabled us to broaden our institutional shareholding base and raise growth capital for the company in a very cost-effective manner. The market's response to these 3 recent events has been very encouraging for the Board and management and will, I hope, have given all shareholders confidence in our future outlook. There were several other successes during the year. Entering into the -- into a commercial agreement with Kaiser Permanente provides the company with a significant opportunity to develop short-, medium- and longer-term value through multiple products with a single large institutional customer. Another important achievement for us was inclusion in the U.S.A.'s National Comprehensive Cancer Network bladder cancer guidelines. These guidelines are widely recognized and used as the standard for clinical policy and practice in oncology by both clinicians and payers in the U.S A. In addition, our commercial growth has continued, and we have an increasing number of urologists and customers using our tests, particularly in U.S.A. and New Zealand. Achieving these latest milestones is a testament to the hard work and perseverance of our Pacific Edge team; and a result of years of clinical research, sales and marketing activity, user programs and relationship building with key organizations and influencers. To attain this point in the company's growth has been both challenging and rewarding. On behalf of the Board, I would like to acknowledge and thank shareholders who have patiently supported us over the journey through COVID-19. As a Board, our focus is on overseeing the successful implementation of our strategy, ensuring robust governance processes and supporting management. We're also heavily involved in the capital management and funding of our company and oversight of our commercial progress. However, this year was the first time for any of us that we've had to deal with a global pandemic that closed down medical practices and affected patients around the world. We felt the impact of COVID-19 in the first 2 weeks of April with urologists struggling with the conflicting demands of COVID-19 restrictions; and managing bladder cancer patients, all of whom are deemed to be at-risk patients. However, our New Zealand business has been quick to return to norm. And the U.S.A., while still largely under the influence of COVID-19, has been making good progress. Across this challenging time, we were able to reduce costs to offset expected income reductions. And we also received financial support in the form of COVID-19 relief packages from governments in New Zealand, Australia and U.S.A. Turning now to our growth strategy, and that remains consistent. It's to achieve global reach with our comprehensive suite of Cxbladder products and to maximize the value of our technology for the benefit of our shareholders. We'll do this by commercializing all 4 of our Cxbladder products in our targeted markets around the world and continuing to sustain our first-mover advantage and position Cxbladder as a preferred detection and management test for bladder cancer. And lastly, we'll continue to grow the adoption of Cxbladder by large-scale institutional health care customers for multiple clinical needs. Underpinning all of this is the commitment to building a profitable business and delivering superior value to patients, physicians and our shareholders. Turning now to the outlook. We now have all the fundamentals in place, and on the back of this, we'll be moving to scale up the adoption of our tests by large health care organizations in our targeted markets. This won't happen instantly, but we do expect to see commercial use and revenues ramping up over the next 12 months and then on into the future. Cash and cash flow management remains very front of mind, as you would expect from the Board of a growth business. Including the recent growth capital received from the ANZ, Pacific Edge has a total cash and cash equivalents of $31.3 million as of the 4th of August. We also expect the increase of commercial test sales to have a positive impact on our earnings and operating cash flows as we go forward. The U.S. market remains our primary focus, with an annual addressable spend of USD 1.2 million -- USD 1.2 billion. To maximize our opportunity, we will require investment to ensure that we are adequately resourced to deal with the anticipated demand and to make sure that our growth is executed seamlessly and positively. Our company is uniquely placed to capitalize on the demand for better, more accurate, less-invasive and more cost-effective diagnostics. As we progress with our key objectives, we expect demand and commercial use for our tests to gather pace. Before handing over to Dave Darling, I would like to say a few thank you's: first, to your Board, for their contribution and wise counsel over the last year. We are a small Board with a diverse range of skills and experience, and everybody has enthusiastically gotten involved in both Board and committee work. In a company such as ours, the workload on directors is substantial, and I'm very grateful for the support of my colleagues over the past year. Next, to Dave Darling and his team. The patience and perseverance to develop and commercialize a breakthrough medical device in the biggest and most challenging medical market in the world is an outstanding achievement for a company based out of Dunedin. The job is not done yet, and the challenge now in front of us is to grow the volume of our tests as rapidly as possible and convert our new platform into value for our shareholders. And last but by no means least, a sincere thank you to you, our owners, who have continued to support the company over our long journey and have shown great patience and perseverance. With that, I will now pass over to our Chief Executive Officer, Dave Darling.

Thanks, Chris. Thank you to everyone for joining us today. I'd like to start today by looking at our progress against our key strategic goals. Urothelial cancer is a major global health problem, and it creates significant health care challenges. This disease is prevalent; has high recurrence rates; is persistent; and is expensive to diagnose, treat and monitor. Our proprietary suite of Cxbladder tests have been built to meet the multiple needs of physicians, health care providers, patients and health care payers. Our tests can be used across the full clinical pathway from evaluation through to ongoing monitoring for recurrence of cancer, to addressing the many clinical challenges that physicians have identified for us. We know of no other company which has created a suite of commercial molecular diagnostic products that positively impact clinical decision-making across the entire pathway. We're commercializing our suite of tests in 4 targeted markets. These are markets of scale and markets that have a clear path to reimbursement, with a high propensity to pay strong reimbursement rates for our tests. Apart from Cxbladder, there have been no new bladder cancer molecular diagnostic tests commercially available to the market in the last 18 years. In fact, we compete against standard technology and tools that have been in use in urology for some time, most of which come up short. The market that offers us the largest and most successful opportunity right now is the U.S.A., and it remains our priority commercial focus. The total market size for bladder cancer is estimated to be more than USD 5 billion, with an estimated annual addressable market opportunity for our Cxbladder products of approximately USD 1.2 billion. New Zealand is our home market and is leading the way with the adoption of Cxbladder and inclusion into guidelines. There have been significant changes in the way most New Zealand urologists practice urology, with Cxbladder being added into the standard of care for the majority of public health care providers. This major transformation in physician behavior foretells the changes that we're now starting to see in the United States with the recent announcement of Kaiser Permanente's commercial use of Cxbladder. Australia and Southeast Asia also offer exciting opportunities for us, although we're at an earlier stage in the commercial pathway in these 2 markets. We're currently running clinical trials in Singapore, and these are nearing completion. The published results will form the basis for a proposed Singapore-wide Cxbladder commercial program. In Australia, we are replicating our New Zealand proven sales and marketing model to drive the sales. And in 2019, our experienced New Zealand Sales Manager relocated to Australia to implement our sales plan. Our second pathway to achieve commercial success is by sustaining our first-mover advantage and positioning Cxbladder as the preferred detection and management tests for urothelial cancer. Pacific Edge owns world-leading technology and intellectual property, and we have a significant time-based competitive advantage. The ability for our tests to be used across the entire clinical pathway, the multiple tests, the consistent performance and ease of transfer of urine samples from the patient to the lab all enhance our competitive advantage. To convince urologists, health care organizations and payers to adopt and grow their commercial use of Cxbladder, we need to have published peer-reviewed clinical evidence. And this is the trading currency for positive reimbursement decisions and recognition by industry guidelines. We have generated in excess of 10 years of accumulated evidence on thousands of patients, all published in leading peer-reviewed urology and clinical journals, showing the outperformance of Cxbladder. This has been a significant and time-consuming investment for the company, and we are now seeing the fruits of this in the reimbursement milestones in the U.S.A., increasing adoption in all of our markets and early-stage inclusion in New Zealand and U.S.A. guidelines. Inclusion in guidelines follows significant adoption by health care providers, and it further empowers urologists and organizations to adopt and use our products. It's early days for us now in the commercial leverage of the recent guidelines inclusion, and this is a process that will continue over the next few years. Our recent highlight achievement for the year was the inclusion in the NCC (sic) [ NCCN ] guidelines for patients being monitored for recurrence of urothelial cancer. This is a pivotal commercial outcome, as these guidelines are widely recognized and used as the standard for clinical policy and practice in oncology by clinicians and payers in the U.S.A. It's also an outstanding market. Several of New Zealand's public health care providers have also integrated Cxbladder into clinical guidelines, replacing the gold standard cystoscopy in both the evaluation of hematuria and in the monitoring for recurrence of urothelial cancer. Most recently, we have seen biomarker technology referenced in the American urology association guidelines for hematuria. In particular, it was satisfying to see the strong recognition of the performance of Cxbladder in the 2020 AUA guideline update, which specifically references a study targeting Cxbladder guideline inclusion that is currently being undertaken by leading U.S. urologists and institutions that are utilizing Cxbladder. A second recent announcement has also been made by the AUA for nonmuscle-invasive bladder cancer, which again specifically refers to Cxbladder and in this case highlighted the outperformance of Cxbladder in comparison to some of the already approved diagnostic tests and procedures in common use today. For Pacific Edge, this highlights that the strategy and the approach we have taken over the last decade is starting to resonate within the urology community. We are now actively working with our growing user base to continue the data capture and evidence development so that the guideline panels can confidently support stronger inclusion language for Cxbladder in the near future. The important thing to remember here is that our efforts have created a mind shift among urology decision-makers, and we now see changes in their clinical behavior. We have technology that is on track to positively disrupt their traditional approach taken in the detection and management of bladder cancer, and we now have the ear of the growing number of physicians who use our technology. Inclusion in the local coverage determination or the LCD is one of our biggest achievements to date, and it enables our ability to receive reimbursement for the many CMS patients that utilize Cxbladder. This completes the CMS reimbursement milestones and is expected to result in a significant commercial growth for the company. Inclusion in the LCD also supports our negotiations with the many private insurance payers in the U.S. who provide insurance coverage for the approximately 60% of our current commercial tests performed in the U.S.A. The impact of these negotiations will be to increase our coverage and therefore reimbursement as well as shortening the cash cycle time for claims payment or our receipt to cash. Now that we have inclusion in the LCD, we'll also be seeking to negotiate with the CMS for reimbursement of the more than 22,000 tests that we have previously completed and invoiced for CMS patients. There is precedence for this with other companies which have been reimbursed for products or services supplied prior to being covered under an LCD. However, the negotiation is product and company specific, which limits our ability to predetermine the monetary size of any outcome. Our third strategic pathway is scale adoption by large health care institutions in all our target markets, particularly the U.S.A. While these large-scale customers can take longer to bring to completion, once commercial agreement is reached, they can provide significant volume, require lower sales maintenance and deliver more sustainable longer-term growth opportunities for us. More recently, we were very pleased to be approved for the commercial use by Kaiser Permanente, one of the largest health care providers in the U.S. Kaiser has over 12 million members, operates 39 hospitals and employs approximately 23,000 physicians. This is a fantastic outcome after a long period of consultation, and working closely with Kaiser Permanente, their due diligence aimed to ascertain the best use of Cxbladder in their health care settings has been a challenging time but a great outcome. The opportunity with Kaiser will see Cxbladder being used to the full extent of its commercial opportunity, where the Cxbladder sample collection kit will be sent to the home of patients who are scheduled for their 3 monthly clinical evaluation for monitoring for recurrence of bladder cancer. This will allow the patient to provide a noninvasive urine sample in the safety of their own home, which is of particular relevance and importance during this global pandemic. The use of Cxbladder in this home setting breaks up the traditional patient care model which would previously require patients to visit Kaiser Permanente's clinics, hospitals or the physician's surgery for their evaluation. The eyes of the urology world are on us right now as we challenge traditional norms through our leading-edge technology. So in the near term, we're underway with our training program for the many urology professionals at Kaiser. However, we must ensure that our supply chain operates effectively and provides accurate and timely results back to both Kaiser Permanente and their patients 100% of the time and to retain our gold standard service levels even as volumes ramp up. If executed well, the Kaiser Permanente program will create multiple product use opportunities, with strong revenue and improved cash flow for our business. Multiple institutions in both the U.S.A. and our other markets are currently using or evaluating Cxbladder, including some of the most highly recognized health care organizations in the world such as Johns Hopkins Medicine and the -- and Cleveland Clinic, to name a couple on our list. Momentum is growing, and the new contracts that will result from these have a -- will have a significant positive impact on our financial position when concluded. Being covered by an LCD and having reached agreement with the U.S.' largest validation customer, Kaiser Permanente, will definitely assist in our negotiations with other targeted large-scale customers and payers. The COVID-19 pandemic has had a transformational effect on traditional health care. The number of physicians using telehealth has grown significantly, with some organizations reporting up to 90% of their consultations being teleconsultations, up from around 30%. Cxbladder now plays an important enabling role in this new telehealth environment, allowing patient evaluation and assessment to be managed remotely. Our Cxbladder in-home urine sampling process incorporates the delivery of sample kits direct to the patient's home; oversight of the sample collection with one of our customer liaison managers in the U.S.; then collection and delivery to the Pacific Edge laboratories for analysis, encryption and return of the result. Given that many urology patients are in the plus-65 years age bracket and therefore at higher risk from COVID-19, it also helps to maintain social distancing, removing the need to visit busy medical centers or collection points. The clinical utility provided by Cxbladder in-home sampling program has been recognized in both the U.S.A. and New Zealand. In New Zealand, during the COVID-19 lockdown, 3 large public health care providers have been actively using Cxbladder for in-home sample collection. And 2 public health care providers have moved to mainstream commercial use from 1 and now on to 2 Cxbladder products. This has obvious benefits for patients and frees up essential health care capacity. In a MedPage Today article published in July, Dr. Nancy Gin, the Executive Vice President of Quality and the Chief Clinical Quality Officer for the Kaiser federation, said that they, Kaiser Permanente, had seen dramatic shifts in telemedicine, with remote health care visits increasing from about 1 in 5 visits before the pandemic to more than 4 in 5. The speed with which this shift took place, days and weeks rather than months and years, stands as a collective accomplishment in the rapid evolution of care. She also specifically mentioned Cxbladder, saying, "Similarly, patients can self-administer diagnostic tests to detect and monitor other conditions from home. For example, a simple urine test can be mailed directly to the homes of bladder cancer patients to monitor for the presence of cancer biomarker genes." The global precedent has now been locked in place by the COVID pandemic, and we expect that teleconsultations will become more common practice going forward. In line with this, in-home sampling is also expected to become an accepted option for patients and physicians even once the COVID-19 restrictions are eased. This provides yet another strong point of difference for our Cxbladder tests that are now being utilized by customers such as Kaiser Permanente in the U.S. and our New Zealand-based health care providers. We have already provided a lot of detail on our FY '20 performance in our results announcement and presentation and our annual report. I'll provide a short summary today. Our stated goal for the FY '20 financial year was to continue the progression to achieving our pivotal commercial outcomes of Pacific Edge, albeit with a similar net investment to the prior year. We achieved this goal. The key metrics we use to measure our progress are operating revenue, laboratory throughput and commercial test volumes. These all increased year-on-year. Our financial results for the year ended 31 March 2020 include a 7% increase in laboratory throughput to more than 16,000 tests; a 14% increase in operating revenue from test sales, which was $4.4 million. And we reported a net loss after-tax of just $18.9 million. Many of the foundations for commercial success have been completed, and adoption of Cxbladder and commercial sales are increasing. We have identified opportunities for growth in all our targeted markets and are progressing in a number of key areas, which will help us achieve our goals of growing our global reach, building and strengthening our customer base and increasing sales and adoption, all of which will drive greater cash revenue. The U.S.A. remains our primary commercial focus, and there are a number of catalysts which will drive our commercial growth. The agreement with Kaiser and the coverage under the LCD will not only drive direct sales with those organizations but also help us to capture other large health care institutions and convert them to commercial customers. We increased the number of U.S. sales reps over the last quarter of FY '20 to help drive growth in this market, and despite the impact of COVID-19, we are seeing an increasing number of health care organizations and urologists evaluating or commercially using Cxbladder. However, all in all, we have seen a tougher-than-usual time in the U.S.A. over this COVID-19 window, where many of the states are still in some form of lockdown and so access by our sales executives is limited. We have a targeted list of institutions that have large-scale commercial urology programs in the U.S. that are currently using or evaluating Cxbladder, and we will focus on getting these to emulate the Kaiser commercial outcome. We will also be working to add further large institutions to the list and to grow their commercial use. Concurrent with all of this, we'll be putting a team of skilled negotiators to work on gaining in-contract status with the many private payers that are currently reimbursing us for Cxbladder. We're planning to expand our specialist sales and customer service teams to take full advantage of the expected increase in adoption that comes from attainment of the LCD, the great endorsement from our agreement with Kaiser Permanente; and to maximize the growth opportunity in the U.S. We will continue to invest in clinical evidence to support our adoption; and are planning to launch our fourth product, Cxbladder Resolve, into the U.S. market following publication of the validation study late in the calendar year. In New Zealand, we are looking to bring the remaining public health care providers into contract and to expand the use of Cxbladder tests by existing customers. The focus for Australia and Southeast Asia is to transition the public health care providers from their clinical studies to a commercial customer model as well as progress discussions with potential strategic partners in Southeast Asia. Right now, these countries are still struggling with the COVID-19 pandemic and may take some time to return to normality. So in summary. Our short- to medium-term focus is all about generating more revenue and improving cash flow. Primarily, it involves executing on the 2 recent commercial catalysts, the LCD for CMS patients and the commercial agreement with Kaiser Permanente. Both will require investment into additional resources to ensure we're able to leverage the opportunity and the anticipated increase in demand in a seamless and positive manner. As well as future CMS tests, we will also be negotiating with Novitas for reimbursement for the more than 22,000 tests done to date for patients covered by the CMS. Inclusion in the LCDs -- the LCD by the CMS also opens doors for us to start contract negotiations with the many private payers who provide insurance to 60% of our current commercial customer base. For Kaiser Permanente, our immediate next steps are to further the training for their health care professionals and to ensure that our supply chain is in place and working at a 100% effectiveness to provide Kaiser's urologists and their patients with our gold standard of service and care. The opportunity is then for further products to be adopted into use by Kaiser Permanente, with the resulting revenue and cash flow benefits for our business. I'd like to take this time to thank the Pacific Edge team across the globe who have worked tirelessly to bring this all to fruition, the Board for their long-standing support and finally to all our shareholders who have been us -- been with us for the journey. Thanks very much for listening today. And I'll now pass you back to Chris Gallaher, the Chairman.

Thanks, Dave. And we'll now open it up for shareholder questions and discussions. Can I invite questions in relation to the annual report or either my or David's presentation? There will be an opportunity to ask questions about each resolution as they are put to the shareholders to vote. [Operator Instructions] So over now to our technical experts who are going to be putting up in front of us the questions.

It's Grant Gibson, CFO. I'll just read out some questions that we received prior.

[ Okay ].

So the first question we received is: Why is Pacific Edge doing so much research and development, when we've been making substantial losses each year?

So I get the role of being a traffic cop here and [ measuring ] these questions out. So Dave D., David Darling, can you deal with that one, please?

Sure. Thanks, Chris. That's a very good question. R&D for us covers a broad spectrum that includes the development of this evidence that we've been talking about so strongly. This is a particularly big investment over a long period of time involving thousands of patients in multiple countries. A single clinical study can run well over $1 million. It can take 3 years to develop, 2 years to implement. And so that rolling component is a big part of our R&D. Secondly, the R&D covers off all of the -- sorry, the commercial capability that sits in behind the -- what looks like a seamless process from urine sample, all the way through to the result and back to the patient. So it's a significant investment, one that we will continue to make. So yes, a very necessary investment.

Thanks, David. [ Back to you ], Grant.

Okay. Second question that come in earlier. Pacific Edge claims that it had a platform to produce tests for other cancers, with Cxcolorectal as the next test. There's about 3 parts to this question: Does the company still have aspirations to expand its testing suite? When will it do so? And will more resources be put into this area?

I'm happy to take that one. Our sole and singular focus over the last couple of years has been to develop and get our bladder cancer tests accepted. Whilst we do own intellectual property around colorectal and other cancers, our sole focus has been on bladder cancer. As we make our way through our commission journey, we will be able to turn our minds to the other intellectual property that we own, but certainly right now our focus is on building out the U.S. platform that's now being established with Kaiser, LCD and the growth of acceptance of our product by urologists in the U.S.A.

Great. Thanks, Chris. Third question. Is the company considering a listing on the U.S. stock exchange, where investors might better understand the value proposition of the company?

Thanks, Grant. I'm happy to take that one as well. We have no plans to list anywhere other than New Zealand at the moment. We are constantly thinking about how best to maximize the value of our company for shareholders and always have that front of mind, but at the moment, there are no plans or intentions to list in the U.S.

Thanks, Chris. This question was asked a few times: Which financial year do you expect Pacific Edge to be profitable? And when do you expect to pay a dividend...

Who will answer that one? All right, I'll take it. We are very early in the journey with Kaiser, LCD or CMS and Medicare and Medicaid, so it would be really unwise to start predicting, but once we get through the establishment and get these customers up and running, we'll get much better sense of sustainable sales and cash flow.

Great. Thanks, Chris. We received a question about some share price movements during the month of June.

Yes. Well, then I'm happy to take that one as well. Our share price has run up, as we all know, from 0.10 to -- I think it got as high as 0.80 and settled around 0.70 to 0.80. It was like 0.78 yesterday. We have had no queries from the NZX in relation to our share price. It has followed [ the release to the market of the ] announcement which we made in Kaiser, in relation to the LCD and then lastly in relation to the ANZ [ presser ].

Great. Thanks, Chris. This is a more specific question on Auckland. "So my wife is an Auckland GP, and she doesn't know if she can request a test privately or funded for patients."

Dave D., that's -- can you take that one, please?

Certainly. And that's a good question, yes. I mean it's always challenging. We do come across general practitioners in New Zealand who don't yet fully understand how to get their hands on a test. We have regular attendance at the GP CME, continuous medical education, programs, one in the North Island, 1 in the South Island. We're there every year. And the answer to the question is, yes, both the patient and the GP can order those tests directly from the company online. So they are available.

Grant, I've got a couple of questions that have come through to me. And I'm happy to -- and I think you've got some more, but I'm happy to put these out there. The question is the CMS process to gain an LCD seems to have been very protected -- protracted. Is this normal for med tech companies? And I'm going to ask David L., David Levison, to address that question, if he could.

Unmute. Okay, can you hear me okay, Chris?

Yes, we can hear you fine, Dave.

Okay. So the answer is yes. It is almost always a very protracted process. I would characterize the Pacific Edge experience as pretty average, and that's impressive because they got -- we got 2 products approved by CMS simultaneously. I've not heard of that happening before. So it's really a function of the clinical data that you can provide to the administrator that is selected for your -- for the region that the lab is in. And Pacific Edge was just very consistent in getting more and more, better and better data; and eventually, data always wins. And that's what happened in this case, but the timing, it's always longer than you would like, but I would characterize the Cxbladder experience as pretty typical.

Thanks, David. While on a role here, Grant, I've got a couple more: With the advent of coverage for CMS patients with the inclusion and the Novitas LCD and the recently concluded commercial relationship with Kaiser, will Pacific Edge now move to accrual-based accounting in the U.S.? And perhaps, Sarah, you can pick that one up for us.

Sure. Yes, in summary, we anticipate that it's likely that we will move at some point to accrual-based accounting, the exact timing of which we'll be working through in the next few months. And so it's that timing and the details, but yes, we expect that we will do.

Thanks, Sarah. Grant, how is your list?

I've got one more that's been received pre the meeting, and then there's a number that have just come through online. So I'll start with the last one that we received pre the meeting. So what is the value of testing charges due from U.S.A. that haven't been paid and added to revenue? Is this value likely to be received in full, or as a percentage? And how much of the balance is closer to receipt with the recent insurance decision?

I'm happy to deal with that, Dave. I think both David, Dave Darling; and myself mentioned that we had invoiced 22,000 tests to the CMS, for which we have not been paid. The gross value of those invoices is in excess of $40 million. Negotiations will soon commence with the CMS for reimbursement of those invoices. How much we may get is really difficult to estimate. It could be anything from $0 to $40 million. So that process is now beginning. And we would expect to get something meaningful, but we'll go down to the -- come down to the negotiations with CMS.

Thanks, Chris...

Okay. I have a couple more come through to me. Over the years, there have been a number of companies chasing the development of a molecular test for bladder cancer. Do we have any near-term competitive threats from another molecular test entering the market? And perhaps, Bryan Williams, could you address that for us?

Certainly, Chris. Yes, the question is right that more than 30 urinary biomarkers have been reported for use in bladder cancer diagnostics, but very few of these have become commercial tests. And the ones that have Cxbladder have been able to show superiority in head-to-head clinical trials. And you might recall that we had a publication comparing Cxbladder to UroVysion's FISH, where we performed much more in a superior manner. There's no -- there are no other tests that we are aware of that are promoting -- promising to be heading towards commercial utility. There was one test that was developed by MDxHealth called Assure Dx (sic) [ AssureMDx ] that looked like a very good test. It had good specificity. In other words, it could detect bladder cancer specifically. And it -- and I think that we thought that this could be potentially a competitor, but that test has now been withdrawn by the company. And maybe, Dave D., you could perhaps discuss the reasons for that, but to date, there really are no other tests that are on the horizon. Now having said that, there are publications almost on a monthly basis describing novel technologies that are being used to detect cancers, a variety of cancers. These are often blood tests, and as I said, they're using a novel technology. So we have to continually be on our guard for a competitor coming along, but Pacific Edge has a suite of 4 tests. These tests have been trialed over many years. We have a number of published studies, and any competitor would have a lot of work to do to catch up.

Thanks, Bryan. And Grant, I've got one more before I hand back to you. "It was great to see the entry of another blue chip institutional investor, the ANZ New Zealand Investments. How has this been accepted by shareholders and the market given that existing shareholders didn't have an opportunity to participate?" And perhaps, Anatole, can I ask you to -- as Chairman of the Capital Committee, to address that one?

Certainly. Thanks, Chris, and welcome everybody today. Yes. So we had a relationship with the ANZ for some time, and they've been following us. When I say the ANZ, the ANZ New Zealand Investments, which is a investment arm. And for us, we've been able to negotiate that placement for the -- pretty much the exact amount that we think we may require over the next 12 to 18 months or longer to really leverage the opportunities we've got and to basically beef up our sales and marketing and institutional sales in the U.S. was a great opportunity. We believe that, having done that at a premium to the market didn't disadvantage any other shareholders, we believe it was -- and believe it was at a good price and now have a good partner in a blue chip investment institution. So we've had a lot of positive responses from other institutions and from other investors. We haven't had too many negative responses. And we believe that that's an appropriate amount of money to raise and that, if other investors wanted to invest more money in the company, then they would be able to do that on market. So the response we've had is that it's a very good outcome. It takes away the perceived overhang that we'll need to raise money anytime soon. And also it makes it -- makes the negotiation with Medicare and Medicaid and the CMS a lot easier in that we can take a long-term sort of approach to that relationship and not be desperately needing that money to go forward. So we feel that's a good result, and that's the indication we've got from the market.

Thanks, Anatole. So Grant, back to you now for, I guess, questions that have come in as we've gone through the session today.

Sure. Thanks, Chris. The first question is from [ Andrew ], and it's about the Kaiser clinical studies. So he asks -- he recalls comments that the Kaiser will be publishing a peer-reviewed paper on the clinical trials of Cxbladder. Do you know if this will still be done? And if so, any ideas of the timing?

Dave D., can I refer that one to you?

Sure. Thanks, Chris. Good question. Thanks, Andrew. Certainly that was a big investment by Kaiser and ourselves in what was -- turned out to be a pivotal clinical study. This is a study that Kaiser used to send the urine sampling systems out to the patients in their homes. So they were sitting on their own data when the COVID issue came along, so they were able to leverage that and decide that they wanted to pick up on that piece of the tests to add into their armory. So yes, the Kaiser guys have the right to publish their data, and so do we. So it's part of our agreement with Kaiser. We've left this pretty much to Kaiser. However, we are likely to publish this data towards the end of the year. The kind of the goal behind the data publication at the time was to use this to get Kaiser across the line, and we've really kind of achieved that now without their publication. However, there's still a great opportunity for us to show their data. The results from that data were outstanding. We were able to share those with the shareholders at the time; and their data remains unpublished at this point, a great opportunity.

Thanks, David. Look, I just have to say that we did have 3 Davids on our Board up until recently, and that's why we refer to David L. and Dave D., just so everybody knows. Right, Grant, what else have you got?

Okay. Another question by Andrew, and this one is focused on Kaiser. So are the U.S. sales team members experiencing more favorable responses to their sales calls? And is COVID-19 inhibiting the ability of the sales team to contact and market Cxbladder to U.S. urologists?

Dave D., [ well, this is back to you ].

Sure. Thanks. Another good question, Andrew. Certainly, as I just then outlined in my talk that COVID-19 is inhibiting the ability of the sales team to get in contact with some of these hospitals. However, some of them are open, and we are able to get amongst those guys. And there are a number of them and a growing number of them who are coming to grips with and recognizing this opportunity to use the urine sample system as a means of leaving their patients at home. So we can -- we're looking to continue to grow that as a part of our mix. In the month of April, roughly 20% of our U.S. lab throughput was for the patient in-home sampling program. And in New Zealand, it was 70%, so yes, a big component of it. So as a result of those 2 big outcomes, the answer is yes. It's almost a given. How we leverage that is we have a defined set of plans and opportunities to leverage that. We'll wait until we get going with the local coverage determination and with Kaiser specifically to a steady state. And then we will start really laying on the relationship and allowing those individuals to go back to, particularly, Kaiser [ and reference in ] and find out how well the technology is going. So as I said before, it is the U.S.' largest validation customer. And in a lot of aspects, it is the world's single largest validation customer, so a massive coup for us. Thank you.

Thanks, Dave. Back to you, Grant.

Great. This is a question for -- from [ Denny ]. So it's the question is relating to any comment on the AUA's 2020 recommendations for Pacific Edge tests. So that's on the AUA guidelines.

Thanks, Grant. Dave D., that's another one for you.

Sure. Thanks. So the AUA guidelines. Getting in any guidelines, as we've outlined, is a function of the amount of evidence you have and the amount of time that, that evidence has been in circulation. Coupled to the adoption of your test, guidelines always follows adoption. To get your adoption up, you need reimbursement, so that's a key component of that. And we -- last year, in July of 2019, we were very fortunate to be included in the update to the NCCN guidelines. It was very positive to get a 2B recommendation. That 2B recommendation was a consensus decision where more than 50% but less than 85% of the 32 people on the guidelines panel voted to include Cxbladder into those guidelines. As you know, we've been included in guidelines in New Zealand, and we've gone one step further. We've replaced the gold standard. So certainly, getting our share of action around inclusion in guidelines. We were a little disappointed to not be able to storm the ramparts in the AUA guidelines, but we -- but in retrospect, it is a multiyear and multi-review process to get included in a really meaningful way in the guidelines. So we were happy to see the Cxbladder performance, particularly, so clearly enunciated and to be traded off against the poorer performance of these older tests and technologies.

Thank you, Dave. Grant?

Great. Thanks. Another question by Andrew. Has there been any response in Singapore...

Who's Andrew?

Has there been any response in Singapore to Kaiser and CMS formally adopting Cxbladder?

Sorry, Dave...

Yes. Thanks. So the answer to that is yes. They do follow what happens in New Zealand. New Zealand is very well aware of that outcome. And in fact, some of the New Zealand urologists participated in the process, helping us with the Kaiser Permanente program. And to help people understand: Kaiser Permanente came to New Zealand to look at how in particular Canterbury was implementing Cxbladder and how they got to where they were and their thinking today. Similarly, Singapore looks across to New Zealand. Many of those Singaporean urologists trained particularly on some of these robots, these urology robots. They trained in New Zealand. They're well aware of New Zealand's position. And so between the New Zealand outcomes and the recent announcements in the United States, yes, they are very well aware. We have yet to be able to leverage those fully because Singapore is still struggling with their COVID problems.

Thanks, Dave.

Great. Thanks...

Grant, [ some more to ask ]?

Great. It's from [ Andrew ]. Which tests are being used by Kaiser? And how are they being incorporated into the clinical practice?

I'll take that. Thanks, Chris. Which tests are being used by Kaiser? And how they're being incorporated into the clinical practice. So the clinical study we did with Kaiser was on -- it started on Cxbladder Triage, and partway through this clinical program, we -- they asked us if we could add in detect. And then they also asked us if we could add in resolve, and we ended up evaluating triage, detect and resolve in the Kaiser background of -- just on 600 patients, fantastic results as I've enunciated before -- and sorry. I lost the track of that question. Can you run the question [ back for me ]?

The team at Kaiser, where it was going to use those.

The test they were going to use. So they've opted, interestingly enough, to start with Cxbladder Monitor. And Cxbladder Monitor, for them, they hadn't carried out any studies at all, which was quite surprising. So the monitor, for them, will be -- it's a very big patient proposition for them. Kaiser handle and publicly stated that they manage around 2% of the United States' urology patients. There are roughly a prevalence of around 800,000 patients coming back to the clinic every 3 months. That's 3,200 clinical opportunities, and then if you multiply that all out, you come up with a very big number of test opportunities for Cxbladder. So that's where they wished to start. They will -- progressed quickly to triage and then on through the rest of the portfolio. The agreement is based on it's a national agreement and it's based on all 4 products.

Thanks, Dave. Grant?

Great. Thank you. I've got a question -- sorry about the pronunciation. It's [ Mingyon Cheng ], and they're a shareholder. And their question is that 78% of revenues coming in from the U.S., that it's becoming a major part of income for the company. And given the recent changes, would Pacific Edge consider giving investors quarterly financial updates in the future?

I'm happy to take that, Grant. That's not something we have turned our minds to at this point in the journey. It is something that we will be giving some thought to once we get some predictability and we know how Kaiser and CMS and our U.S. business is ramping up. So not -- that's something we will look at.

Great. Thanks, Chris. Next question, from [ Kevin ]. Do you have some forecast revenue numbers and EBITDA for the next couple of years? What is the expected approximate release to revenue of the receivables since the LCD decision in the U.S.? What is the current status of signing up of new customers in the U.S., especially similar customers like Kaiser? So a number of questions in that one.

Yes. So I'll let -- Dave D., I'll take a couple and then defer to you, but in terms of putting out numbers and forecasts and estimates, we're just not in a position to do that and won't be in a position to do that until we fully understand the extent of the ramp-up we will achieve in the U.S., the [ if you like ], acceleration of adoption, but to put numbers out now would be meaningless. Dave, in terms of the second part of that question, are you happy to pick that up?

Yes, no problem. Those are very good questions. So what is the current status of signing up new customers in the U.S., especially similar customers like Kaiser? So I think we've pretty well covered that off in the presentation, where there is a long list of institutional customers that we've targeted, singled out and we've been working with for quite some time. These institutional accounts, they have a long lead time before you can convert them to a commercial agreement like Kaiser. The Kaiser one itself took us a very, very long time, as you will all remember. And yes, the goal, of course, is to get these guys across the line because, once they're there, they commit the entire entity. And the interaction between our sales reps is way less, very limited amount of maintenance time required for that. And then the volume throughput from these big players is also very large. So you went on many fronts. So we're in process with these guys. COVID is creating lots of challenges for us out there, but we'll continue to progress with those and we'll announce them as they come to completion.

Dave, can I just add a couple of points there?

Sure.

Kaiser is regarded as a leader in the U.S. And these other institutions, and some of which we are running [ user ] studies at the moment -- but John Hopkins (sic) [ Johns Hopkins ] and Cleveland Clinic, et cetera, they will take a lead from Kaiser. Is that a [ fair ] statement?

Yes.

Okay. Thank you. Grant?

Great. Thanks. This one is from [ Kevin ] and it's a multifaceted question again. So I'll start at the top: What's the status of establishing further labs throughout the world? And where will these be? Is there any intention to relocate any of the existing labs into more centralized bases near airport hubs? And that's a reference to the lab in Hershey in the U.S. And what is the current turnaround for test results to be returned to urologists and practitioners from labs? And is there a limitation for the tests to occur?

I'll take those, Chris.

Yes, Dave.

Thanks, man. So what is the status of establishing further labs throughout the world? So we went out -- our strategy as a centralized lab model. Say you want to run as few labs as possible -- and we have a great asset at our fingertips, and that is the urine sampling system. This is an innovation that we developed in order to leverage these genomic biomarkers that are in urine. The urine has a very [ degradative ] background. And as such, these genes and this RNA in particular is very labile, short, half-life. And we need to protect this material and buffer it up so that we can get it from the patient to the lab of choice. Ideally you only want to run 1 lab. We run 2 because it suits our purposes and provides cover should we ever have a pandemic in one country and we don't have the pandemic in the other country and we need to relocate samples to the second lab. For us, we have 2 labs. They're both CLIA-accredited labs, 1 in Dunedin, New Zealand servicing New Zealand, Australia and Singapore; and a second 1 in Hershey, Pennsylvania in the United States. And that services the entire United States. The lab in the United States has a throughput capacity of 260,000 tests per annum, so we have lots of headroom. It's highly scalar and relatively easy for us to scale up as our business builds. So why Hershey, Pennsylvania? When we set out to run this business in the United States, we had to look at all of the operating procedures, and suffice to say that no one wants to fly another 5 hours across the United States. However, Hershey, Pennsylvania offered us a lot of opportunities that the other places didn't offer, and these are well-known biotech and med tech centers such as San Francisco and San Diego and Boston. But Hershey, Pennsylvania was on the main trunk line. We're 15 minutes from the Hershey state airport. We're 20 minutes down the road from the FedEx' largest hub. It's not their flagship hub, but it is their largest hub. And we're 1 hour out of Philadelphia, 1 hour out of Baltimore, 2 hours out of Washington, D.C. and 3 hours out of New York. And there are 58 million people on their northeastern seaboard. So our strategic decision was to go to Hershey, Pennsylvania. And it's land that is owned by the Hershey trust fund. It's one of the largest trust funds in the world. It's right alongside the Penn State medical research facility, and it's well suited. It's shown to be a very good strategy. And we enjoy being here despite the 5 hours of extra flight across the United States.

Great. Thanks, David. Question by [ Terry ], and I think I can answer this as CFO. So of the 22,000 tests that you will be negotiating with Novitas for reimbursement for CMS coverage, what amount was paid for these tests per test in the first instance, if any? So I can answer that: We've invoiced them to CMS, but there was no payment received on them. So there's been no revenue recognized in the accounts and that's still outstanding. So that's part of the negotiations that are underway for the full amount of the 22,000 tests.

Thank you, Grant. Any more questions?

Okay, yes, there's a number of questions. Okay, this one is from [ Jining ]. When will Pacific Edge start to provide ongoing regular updates on the number of tests from the U.S.? I can answer that as CFO: In the annual report and the midyear report, we provide details on throughput from both U.S.; and the rest of the world, which is predominantly New Zealand. So we issue those on a 6-monthly basis 2 months after the September half year and the March full year. So we will continue to update those.

Thank you, Grant. There are no plans to go to quarterly reporting at the moment. So it's 6-monthly reporting is what we're doing. Next, Grant?

Great. It's from [ Chris ]. So for the 2021 financial year, what are your key projected measures? And how will you measure your results against these?

I think we've covered those off in our presentation, where we outlined the major metrics that we use to measure the performance of the company, and these being total operational revenue, total lab throughput and commercial tests. So we'll continue to measure the performance using those metrics.

Great. Thanks, David...

There's one other metric, Dave, we've focused on, and that's cash.

Sure.

Operating cash flow.

Great. This is from [ Terry ]. So are we approved in the EU? And if not, when will that be started? If we are already approved, how we -- how will we then progress towards commercializing Cxbladder? And the last part of that question -- sorry. There's another part. Would we likely seek a partner to do this rather than direct sales method in the U.S.?

I'm happy, Dave D., to have the first crack at that, and you can carry on. I believe the company took a strategic decision some time ago that Europe was just too hard and the U.S.A. was the place that we'd focus on. And that has been really the singular focus of our time, energy and resources, in addition to New Zealand, with a little bit in Australia and Singapore. So we have a lot in front of us to achieve in the U.S. and markets that we're already in before we start heading off into other markets. Traditionally, Europe is seen to be complicated, complex, very hard. It's hard to know who's going to be in the EU going forward and who's not. So we have our plate full. And the job in front of us is to maximize what we have, particularly in the U.S. Now Dave D., if you've got anything to add to that, please...

Sure, Chris. Thanks very much. That was a good answer. Yes. I mean, to answer the first part of the question, we are approved to operate in the EU. As Chris outlined, we really don't see the -- see Europe as a single destination. There are 9 countries. Each one of those countries has its own reimbursement strategy. It's extremely challenging, as outlined by Chris. There are 1 or 2 routes through there. However, we are in touch from time to time with some very big customers there who have the propensity to pay. By and large, most of those European countries have very poor health care systems and can't pay. So there's -- when you look around the world and you look at places like Southeast Asia, who have a high propensity to pay as -- or as large as the U.S. -- and in our definition of Southeast Asia, we're talking about 620 million people, of which 300 million of them reside in metro centers. And the price is high. So we weigh that up, Europe versus Southeast Asia. And once again, that's why we focus on the U.S. and Southeast Asia.

Thanks, Dave.

Great. Thank you. Okay, [ Derek ]: The prostate biopsy is an awful experience. Is Pacific Edge working on a test for the prostate?

Bryan. I think you're on mute, Bryan.

I'm unmuted now, I think.

Yes, you are. Thanks.

The short answer to that is currently we're not working on it. We certainly have looked at it in the past. There are lots of issues around trying to detect prostate cancer using urinalysis. Manipulation of the prostate can give false results, for example. So that's just one example of some of the complications. There are other competitors in the market, too, that we have to be aware of. And then of course, the PSA test is still the gold standard. Free and bound PSA is the test that's most often used as a follow-up to a high PSA test result. And so competing and being able to displace that particular test would be a long, hard road.

Thank you, Bryan.

Great. I've got a question from [ Stuart ]. How much or how many -- what is the increase in staff numbers that Pacific Edge has had this year? What are the increases expected for the next financial year?

I'm happy to take that one, Dave, if you're all right, but there's been no increases over the last year. In fact, I think our numbers have gone down. And now Dave and his team are putting together the full-scale sales execution plan for the U.S. market on the back of our Kaiser and LCD inclusions. So we wouldn't -- we would expect to see an increase in head count in the U.S., but over the last year, we've actually had a reduction in head count. Dave, have you got anything to add to that?

No. Thanks, Chris. That was a good answer. That's great.

Okay. Thank you.

Great. Thanks, Chris. So a question from [ Charles ]. Can you expand on the work with VA hospitals in the U.S.

Okay, Dave? Thanks.

Sure. I'll pick that up first -- yes. Thanks. So the Veterans Administration is a great customer. It's a separate federal budget, so completely different to the CMS. They have around 10 million veterans. There are 10 million of the families. It's a 20 million customer proposition for the company. In order to talk to the VA, you [ need a Federal Supply Schedule contract where you achieved a Federal Supply Schedule contract ]. And as you will all remember, the -- there's a great price for the Federal Supply Schedule contract of $2,246. And the reason we can talk about that is it's in the public domain. And so each of the many Veterans Administration centers are the focal points for treatment and management of veterans. And right now, we have identified 5 of those large Veterans Administration centers. Now that we're able to go in there and talk to these people, and they're doing their user programs, we'll generate the data. We'll collate that into either a white paper for internal use or a publication, and then we'll use that to leverage these Veterans Administration centers. They're very much like -- our learning once we got inside was they're very much like the public health care providers we have here in New Zealand.

Thanks, Dave.

Great. Next question is from [ Stephan ]. So can you please remind us, how many tests could be processed in the U.S.? And could you provide us with a unit cost per test and specify the currency?

I'll grab that, Chris...

Yes, [indiscernible] [ to look at the press release ], but you take it, Dave.

Thanks. So we have a capacity for 260,000 tests per annum. That's the design capacity of the lab. So plenty of room there. The New Zealand lab currently has 35,000 test capacity, design capacity. The unit cost for the test is very low. It's a high-margin test. And the cost per test is NZD 100.

Thanks, Dave.

Great. Thanks. This is a question from [ Aaron ]. A number of it's been covered already but just in case there's a chance to give the shareholders any further updates. So what are the key execution challenges and risks that Pacific Edge faces in the ramp-up to meet immediate demand in the U.S.?

I think we've covered most of that off, I think, Chris...

I think that's [indiscernible]. We've covered pretty thoroughly our ramp-up in the U.S.

Great. Thank you. This one is from [ Sam ]. What is the test price that's been agreed with KP for monitor?

We're not in a position to divulge that price because that's a very sensitive price and would be used. It's very commercially sensitive and we're under confidence for that, so we can't divulge that. I'm sorry.

Great. Thanks. And [ Sam ] has asked. Do we expect Pacific Edge to be included in the NZX 50? And if so, when?

I'm happy to take that one. Yes, we do. If things remain as they are and our market capitalization remains as it is or better, then I think we will be eligible, most likely in the December [ quarter ]. It's not by invitation. It's by sort of [ arithmetic computation ], but we would expect, come December, that we would be invited into the NZX 50, all things being equal and our market capitalization remaining as it is today.

Great. Thanks, Chris. It's a question from [ Michael ]. I think Bryan has touched on this and covered it quite succinctly. His question is, what is the main competition? And how long have they been in business? So I think Bryan has covered that. So Michael, if that doesn't answer your question, just enter it back into the system and we can...

I'll add a couple of extra points to that, Grant. Thanks very much. So as -- I covered off in my presentation the fact that we compete right now with the standard of care that's in the market. There hasn't been any new commercial test release to the market in 18 years. The last test to be released in the market was UroVysion FISH assay. It's an Abbott-owned test, and it was launched in 2002 and has a very small slice of the clinical pathway and really has been outperformed by Cxbladder in several publications. So there's nothing there that where -- that we can see on the immediate horizon. There were a couple coming through. As Bryan outlined, every year, we see researchers releasing a single biomarker. A single biomarker does not make a test. It did in the past. It doesn't today, and you can't get enough clinical resolution from that. So that pathway is highly prescribed. And we get a good look at what's coming, but those guys, as Bryan outlined, have got a long way to go and, as we know, probably well in excess of $140 million to take a biomarker test, multiple biomarkers, all the way through to a commercial proposition that would compete with Cxbladder.

If I can just add to that very briefly. I -- we've seen how long it's taken Pacific Edge to get from idea to commercial acceptance, and that's been in excess of, what, 15 years. So our big advantage is time. If anyone else want to come into the market with a new product, they would have to go through the exact same hoops that we have gone through in terms of getting urology acceptance of the product; getting the peer-reviewed publications done, the user studies done. And it's a substantial investment of both time and money.

Chris, if I can just make a comment on that too. I mean this is not exceptional in terms of Pacific Edge in terms of getting genetic -- genomic-based tests into the market. If you look at Cologuard, which Genomic Health has developed over many years, it's taken a very long time for them to get to market. So it's not exceptional.

But it is to an extent, Bryan. It's our [ moat, isn't that ]? It's time.

It is indeed, yes.

Yes.

Great. Thanks. [ I think a very thorough answer ]...

Thanks, Grant. How are we going with that list, Grant?

There's about another 4 or 5, so I think we should be able to have time to go through those. This one is from [ Wayne ]. Why does the Dunedin hospital, despite being the closest health facility to Pacific Edge, not offer Cxbladder?

Well, it's a couple of hundred meters away [ from out there ], but Dave D., I'll defer to you that.

Sure. Thanks. We have worked closely with the Dunedin hospital and vain attempts to get them to use Cxbladder. There's -- it's no -- there's no clear answer to that. It's an internal-related issue. We have no idea. So we continue to work with them. Hopefully, they'll see the light and adopt Cxbladder.

Thanks, Dave.

Great. Thanks. This question is from [ Stephen ]. Would Pacific Edge ever consider acquiring the midkine asset portfolio from Cellmid, including the patents?

I'll take that, Chris.

Yes, please.

So yes, [ Stephen ], thank you. We do have a license to use the midkine asset because we felt that it could provide an opportunity but also remove a potential intellectual property threat from the company. So it provides us with 2 opportunities. One, firstly, it's a protective mechanism for people that might want to come at and try and use our intellectual property. They'd have to fight off Cellmid. But secondly, the Cellmid patent is associated with midkine, and we're interested in [indiscernible] next month. So the answer is no.

Thanks, Dave.

Thank you. This one is from [ Christopher ]. So without compromising our negotiating position with CMS, are you able to give us some idea of -- as to what leverage Pacific Edge has in relation to securing payment for the $40 million unpaid fees for 22,000 tests?

No. I'm going to ask David L. to just talk us through his experience without necessarily talking about numbers but just the exercise he went through in a previous life to get a settlement for -- I'll call it [ back pay ] but invoices not paid.

Sure. As Dave D. has already said, it is a unique negotiation with the MAC, in this case Novitas, with when your data has come out and how they feel about it. So there is no algorithm or formula that you put in all the variables and you come out with an answer. It's a negotiation. And I think Dave and the team have done a good job of establishing a relationship with Novitas. I think they're also doing a good job of wanting to get some of these current tests paid for before you have that conversation. So no. Unfortunately, there is no formula. There has been a lot of variability about how these MACs are thinking about back pay. I appreciated Chris's comments earlier, which is the range is 0 to some number much larger than 0 and it's impossible to handicap where it is in that range.

Thanks, David L. Grant?

Great. The last few: This one is from [ Fiona ]. So thanks for the question. What's the current share of market that Pacific Edge holds? And what share is required to transition to profitability?

I'll do it.

Yes, Dave D., you can pick that one up, please.

Thanks, Chris. I guess, I mean, firstly, we don't really look at the market share that we hold. As we've outlined, we compete with the current existing technology. So for some customers, we hold 100% of the market share because we're the only molecular diagnostics test that's available in the market. So it really depends on how you look at it. Right now, we do 16,000 tests. We're looking to grow that significantly. We've outlined some numbers around what Kaiser Permanente might look like. How quickly we penetrate that Kaiser Permanente, how quickly we build our business in the United States will dependent upon what percentage of the market share we take up, but it's not a metric that we use to measure the performance, successful performance, of the company.

Thanks, Dave.

Great. Thanks. I think we've got about 3 questions left. This one is from [ Wayne ]. So are there any price differences the health care providers pay for Cxbladder between private insurers like KP and the CMS?

Yes...

Yes, that's yes, but Dave D., you'll...

Thanks, Chris. Are there any price differences? Yes. The 2 price points that we've put out there: The retail price for the test is $2,995. These -- the VA -- the Federal Supply Schedule price is $2,246. We have a contracted price with TRICARE for the active military. We have -- the only other price point that we can talk about is the CMS price itself, which is USD 760. And there are a number of other price points in that range based on individual negotiations. For the veterans, they can't negotiate an outcome higher than $2,246. So the ones we've negotiated with are close to that number, but we can't give you any more color on that.

Great. Thanks, David.

Thanks, Dave D. That just emphasizes the point you made that this is a very high-margin business when our cost of production is about $100. Grant?

Okay. [ Denny ] has asked, "Are there any thoughts on going into Canada? There would seem to be many synergies with your existing markets."

Look, I'll quickly say yes. We have discussed Canada. And Dave, I'll move -- I'll put it to you.

Thanks, Chris. Yes. So Canada, yes, there are similarities. We have done a number of -- we work with some big urology outfits in Canada. We will eventually add Canada to the list. Right now, they're not a piece of our focus. We want to deliver on what we've targeted. Canada is unlikely to be as high a paying proposition as some of our other markets, particularly the United States. So we're -- as Chris outlined so well, we are very focused on delivering on our revenue in the countries that we've identified in our strategy.

Thanks, Dave. Grant, by my calculation, this is the last one.

It is and it's not actually a question. So this one is from [ Brendan ]. And he's got -- "I don't have a question. However, I'd like to take the opportunity to thank the Board and the management for their efforts over the last 15 years and bringing the opportunity and company through to where we are today. So that's a great outcome."

Thank you, [ Brendan ]. Thanks very much. So if there are no further questions -- and I think, compared to prior years, Dave, that's been a very long list of questions, and all good questions.

Yes. It's been great.

We will now move to the formal piece of the meeting, formal part of the meeting, if I can, and I would like to move now to the resolutions before us. These were notified in the notice of meeting, and explanatory notes have been provided. Voting on each of the resolutions in the notice of the meeting will be by way of poll. All resolutions are ordinary resolutions and therefore must be passed by a simple majority of votes cast by shareholders entitled to vote and voting on the resolutions at the meeting. Only shareholders, proxy holders or corporate representatives of a shareholder may vote on today's resolutions. To vote online, click on the "get a voting card" icon in the online meeting platform and supply your shareholder number or proxy number to validate. Then mark your voting card in the way that you wish to vote by clicking for, against or abstain. Once you've completed your selection, please click "submit vote" on the bottom of the [ card to lodge your vote ]. If you have any difficulties, please contact the help line number displayed on the top right-hand side of the screen. The results of today's voting will be posted to the NZX as soon as practicable. Resolutions. So as a Board, we regularly review our membership to ensure the appropriate skills, capability, experience and knowledge are in place to provide effective governance and oversight of the company's strategy and commercial progress. Today, we have 2 directors retiring by rotation and who are standing again for reelection by shareholders. The first resolution is in relation to the reelection of Bryan Williams as a director. Bryan has been a member of our Board since 2013 and is currently the Deputy Chair. His medical research, oncology and commercial expertise is of great value to the Board. And alongside this, Bryan has a strong governance -- set of strong governance skills; and has held a number of governance roles, including with other listed life science companies. The Board considers him to be independent and unanimously supports his reelection. I'll now ask Bryan to say a few words in support of his reelection.

Well, thanks, Chris. I'm very pleased to be standing for reelection as an independent director of Pacific Edge. It's an exciting time for the company, having achieved major milestones recently. And we've heard a lot about them today: firstly, the inclusion in the Novitas local coverage determination so we can get reimbursement per test performed on patients that are insured through CMS; and secondly, the commercial agreement with Kaiser Permanente, for the national use of all 4 cancer bladder products. So I think, together, these will have a major impact on our business growth in the United States, and they will have impact really worldwide on our business. So I'm excited to be standing for reelection. And the skills, I believe, I bring the Board, they span a lifetime of experience in cancer research, governance, commercialization in med tech companies, including Chairman of a NASDAQ-listed company in the U.S. where I served for 7 years. So today, just to update you that I'm a director and shareholder of a privately held biotech company in Melbourne that is developing novel immunotherapy for ovarian cancer and leukemias. And I've also recently accepted a consulting role with the Cleveland Clinic. You've hear about the Cleveland Clinic today. This is the #2 ranked health care organization in the U.S., and the role that I'll perform is focused on strategic alliances and technology developments. Thank you.

Thank you, Bryan. So are there any -- I would now like to put the resolution to the meeting. Are there any matters for discussion or questions from shareholders on the resolution? If there are no questions on this matter, thank you. And could I now ask you to select for, against or abstain for resolution 1? [Voting] And moving right along. And like Bryan, retires by rotation. Dave is the Chief Executive Officer of Pacific Edge and has held a Board position since 2014. His knowledge and insight into the company and the sector we're operating in, we operate in is of great value to the Board. Dave has over 30 years business experience in life sciences and biotechnology. And in his capacity as Chief Executive Officer, he has led Pacific Edge from its early inception. Dave has been and remains an integral part of Pacific Edge's growing success and momentum. The Board unanimously supports his reelection. Now given that you've already heard quite a bit from Dave today, I'm not going to ask him to speak, other than if anyone has a question on the resolution, we may, please, raise it now.

There's no questions come through, Chris.

No questions, okay. So if there are no further questions, can I ask shareholders to please vote for, against or abstain for the resolution? [voting] Resolution 3 is the appointment of our auditors. We are seeking to reappoint PricewaterhouseCoopers as the auditors of the company and authorize the directors to fix their remuneration. I now put the resolution to the meeting. Are there any matters for discussion or questions from the floor?

There's no questions come through, Chris.

Thank you, Grant. Well, I now invite you to please either select for, against or abstain for the resolution. [voting] Now moving right along. We -- you should now submit your votes, and voting will be open until the close of the meeting. Voting on all resolutions will be by way of poll and will include postal votes and proxy votes that were received by the due date. For everybody's information: The company has received 228 proxy and postal votes, representing approximately 43% of total shares, with approximately 95% to 97% of votes in favor of all 3 resolutions. Results of the voting will be announced on the NZX after the conclusion of the meeting. Other business. So that brings us to the end of the formal part of the meeting. And in normal times, we would shortly be adjourning; outside, stay for some lovely [indiscernible] and a sandwich but not this year. Are there any other matters that shareholders would like to raise with management or the Board who are all here today?

There is one here, Chris. Grant will bring it forward.

Thank you.

Yes, and it's from Andrew. So thank you, Andrew...

If this is who I think it is, I'm going to be calling him.

"I'd also like to echo the previous non-question and thank you to all the staff and directors for your efforts today. It's wonderful to see the company in the position it now is. Thank you. Andrew."

No, it's not the end, but I thought it was. But thank you, Andrew.

Thank you.

So with that, we've arrived at the end of the 2020 annual meeting, and I hope the shareholders have gotten out of the meeting and questions and presentations what they were looking for. Thank you all for your attendance today. As I said and David said, we do really value the persistence and patience of our shareholders who have supported us so loyally over the last 15 years. As usual, a summary of proceedings and voting at today's annual meeting will be released to the NZX. And with that, I declare the meeting closed. Best wishes to all. And those that are in COVID environments, stay safe and stay well. And we look [ endlessly across the desert ] at our Kiwi friends who are in a much better place than some of the others or us. So thank you very much. And I declare the meeting closed.

Thank you all.

Thanks, everybody...