Pacific Edge Limited (PEB) Earnings Call Transcript & Summary

Good morning, everybody. Welcome to the investor briefing associated with our capital raising presentation. I'm Dr. Peter Meintjes, Chief Executive of Pacific Edge. And with me today is Grant Gibson, our Chief Financial Officer. There is an important notice and disclaimer associated with this capital presentation. Please take the time to read that as necessary. We're going to go and have a quick overview of Pacific Edge as it relates to this capital raising presentation that we have excellent science, technology and intellectual property because our Cxbladder tests are patented, noninvasive urine tests that deliver proven clinical, economic, and patient value. We have robust clinical evidence across a range of our products that have been recognized, importantly, by the AUA with a Grade A evidence rating for Cxbladder Triage. And we have a short-term catalyst that we are expecting a draft LCD for Triage and potentially Triage Plus expected any time between now and September 2026, with the final LCD expected any time before March 2027, noting, of course, that these are management estimates because Novitas controls that time line. We do also have the intention to leverage that draft LCD to seek claim-by-claim reimbursement to drive revenue prior to final effective coverage, and I'll elaborate a little bit more on that through the presentation. We've got a substantial market opportunity that we are chasing. And although Pacific Edge has had its challenges with Medicare reimbursement with those that we have addressed through ongoing evidence generation, our total market opportunity remains the same, $10.8 billion that we are chasing. Cash burn has been actively reduced in the second half of FY '26 versus the first half. And there are further phased cash management activities that have already commenced. Balancing cash preservation with maintaining core capabilities for commercial scaling post coverage has been an important priority in our decisioning around prudent capital management. And we are focused on a path to profitability. Importantly, in FY '26, we had the excellent milestone that will underpin the future profitability of our business of achieving Medicare pricing at $1,328 per test, an increase from $760 for Triage. And as we think about a post-coverage world for Pacific Edge's products, specifically the hematuria product, we will be focusing on sales force efficiency, implementing clinical pathways at institutional accounts and scaling throughput beyond our historic levels. A quick overview of the capital raising presentation. I'm not going to read all the details on this slide because most of you will be familiar with Pacific Edge already. But we are focused on urine biomarker tests that support both the detection of new bladder cancer and the surveillance of patients with known or suspected disease. Of more relevance to this particular call is the update since we had our Contractor Advisory Committee meeting. And that was hosted by Novitas on the 19th of February 2026 and provided an evidence-based mandate for the coverage of urine-based biomarkers and they regularly were citing Cxbladder publications, which we'll expand on in a later slide. Pacific Edge currently expects Novitas to publish a draft local coverage determination for hematuria evaluation that includes coverage for Triage and potentially Triage Plus because that data is already available for them to do so. And we expect the time frame to be any time before September 2026. Publishing a draft is followed by a notice and comment period, a minimum of 45 days before then addressing the comments and finalizing. Once finally published, the LCD takes a further 45 days for the LCD to become effective. Pacific Edge has taken several actions on cash preservation on the topic of cash preservation in FY '26 to reduce the monthly average cash burn to $2.4 million a month, down from $3.3 million per month for the first half of 2026. The way we have been able to do that is through reductions in working capital, phasing and prioritizing of R&D and clinical studies expenses, deferring CapEx reducing headcount and not backfilling departures within the commercial team. In FY '27, Pacific Edge has commenced further phase reductions toward a target monthly average cash burn of $2.5 million for the full year versus the $2.85 million, which is for the combined full year of FY '26 with further prioritization of R&D, clinical studies expenses, travel reduction, shifting discretionary cash compensation to equity awards. Pacific Edge is balancing cash preservation measures with protecting core assets of the business to preserve our ability to scale commercially after Medicare re-coverage. Key upcoming milestones and a focus for this presentation. We -- the anticipated publication of the draft LCD with clear policy language that demonstrates medical necessity of Cxbladder Triage and potentially Triage Plus. We make that statement given the mandate that key-opinion-leading urologists gave to Novitas on the Contractor Advisory Committee. Leveraging that draft, once published, we will seek claim-by-claim reimbursement from Novitas for hematuria testing that would assist with increasing revenue and reducing cash burn between the draft and the final effective LCD. Final coverage policy for Medicare is expected to unlock revenue from commercial payers as well as Medicare by one, removing the key reason to deny; two, providing language from commercial payers that can adopt their own policy; and three, leveraging state biomarker laws, which I haven't talked historically that much about, but do provide a mandate for commercial payers to pay for any test that Medicare pays. And it's an initiative developed by the American Cancer Society that becomes increasingly important once we regain Medicare coverage. Pacific Edge is currently targeting to submit Cxbladder Surveillance Plus for a CPT code as well during the next financial year. And importantly, if that date is achieved, that would lead to claim-by-claim reimbursement by July 2027. If that date is not achieved, you have another opportunity to submit 3 months later. The coding submissions are quarterly in the U.S. We remain optimistic that Te Whatu Ora Health New Zealand is considering Cxbladder for a national clinical pathway for hematuria evaluation in 2026 and seeking that information in the coming months. Another smaller event that has happened recently is that the Mid-Atlantic Permanente Medical Group, which is one of the hospital systems within the Kaiser health system, Kaiser Permanente Health System has begun a 150 sample pilot study for Cxbladder Triage mirroring the protocol from Southern California, which, if successful, may lead to future expansion within the Kaiser Permanente Health system to the Mid-Atlantic region, and there are 800,000 lives in that system. In -- regarding our unaudited financials, which we also announced today, the FY '26 operating revenue did fall to $11.5 million from $21.8 million. And I think everyone is clear about the reasons for that. It is as a consequence of the noncoverage determination that ended Medicare reimbursement while -- and has also impacted our total laboratory throughput falling 21.4% to 18,784 tests from 23,885 tests. However, fortunes in the Asia Pacific region have continued to improve with revenue and TLT rising 7.8% to 5,406 tests. Total expenses fell, and I won't read out all of the details there, but they are available to you. Importantly, though, cash burn reduced to $2.4 million per month from $3.3 million in the first half and further capital preservation initiatives post financial year-end are targeting a monthly average burn of $2.5 million for FY '27. Cash and cash equivalents were $5.1 million at the end of April and the net loss increased to $35.7 million from $29.5 million in FY '25. This capital raising, Pacific Edge is conducting a $24 million placement and retail offer for new Pacific Edge ordinary shares with funds used to strengthen its balance sheet to support ongoing operations and growth, support the company to achieve Medicare coverage and continue evidence generation, product development and innovation. The offer price is $0.17, which represents a 2.3% discount. Right. Moving on to our financial snapshot for the year for FY '26. So there were 2,400 -- sorry, 24,190 global tests, which is a reduction driven predominantly by the performance in the U.S. The trend is similar for the 18,783 commercial tests. Operating revenue did fall to $11.5 million, leading to a net loss of $35.7 million. But importantly, the cash burn was dramatically reduced from $3.3 million to $2.4 million. I will move swiftly over the corporate overview, but that slide is also available for you to spend some time on, should you wish as part of the materials uploaded to the NZX today. So as a reminder about our tests and where they deliver value, we are in the process of moving from our legacy products, Triage and Detect, to Triage Plus in the hematuria space, and we are in the process of moving from our legacy product, Monitor, to Surveillance Plus in the monitoring and surveillance area of disease management. And our tests remain the most ordered tests by -- whether you measure that by the number of patients that have used Cxbladder or the number of urologists that have ordered Cxbladder. And we are underpinned by the largest body of clinical evidence. And importantly, that evidence is categorized into analytical validation, clinical validation and clinical utility evidence, important for making the behavior change among physicians, the policy change among payers. And the AUA have given our Cxbladder Triage test a Grade A rating. So a summary of our products. And again, I won't go into too much detail here. Possibly the most important thing on this slide is to highlight that our Triage Plus test is a better Triage test, and it is also a better Detect test. It has the highest sensitivity, the highest specificity, the highest negative predictive value and the highest positive predictive value of any test in the hematuria space, outperforming both of our tests, and it comes with an already Medicare-approved price point of $1,328, which underpins the future unit economics of our business. In the surveillance space, surveillance is -- Surveillance Plus is not as far along. But as mentioned earlier, we are targeting a CPT-PLA code to be submitted to Medicare by -- in December this year, which would lead to claim-by-claim reimbursement on A58917 from July 2027. The value of our tests drives -- we drive economic value for patients, hospitals and payers from the tests that we run. And this is made most clear in the microhematuria space where the current standard of care would need to provide 100 cystoscopies to find 5 patients. However, in a Cxbladder pathway that can be implemented at the system level, the performance of Triage Plus is so good that 85% of those patients can safely avoid cystoscopy, while 15% will receive cystoscopy, and we will find the same 5 cancer patients. And the cumulative body of our evidence from clinical utility studies and real-world evidence highlight that the cancer detection rate in our populations is unchanged compared to the current standard of care. I wanted to highlight a couple of other things on this slide. The economics have started to favor the adoption of biomarkers. Cxbladder avoids invasive unnecessary procedures that for driving down the costs of health care systems and payers, and they are slowly starting to recognize this. At scale, Cxbladder can spare more than 1.5 million patients in the U.S. from cystoscopy and save more than $500 per patient. And this has been studied in our budget impact models and is peer-reviewed and published. Importantly, some of the demographic changes are that the population in the U.S. is aging with an increasing number of patients requiring urology care. And adding to the -- and exacerbating the problem, the number of urologists per person over 65 is falling in the U.S.A. And this -- the combination of those 2 factors potentially leads to delays in diagnosis. Medicare reimbursement for cystoscopy has also declined from $204 to $172 over the last 4 years. and we expect that trend to continue. So I talked a little bit earlier about the future of our products. And as we move from the current state to the future state, we will be heavily migrating towards Triage Plus and Surveillance Plus over the coming years. Triage Plus has already had its patents filed, it's AV published, CV published, it's been priced and coverage has been requested from Novitas. And as most of you listening will know, this is the impending event. We are waiting for it to have Triage Plus also covered alongside Triage, which it has the potential to do. The price of $1,328 achieved last year is a significant milestone for Pacific Edge. It strengthens the unit economics of operating an account executive and underpins the future profitability profile of the company. Triage Plus in the United States is an early access, and we are seeking to be added to the AUA microhematuria guidelines alongside Triage in FY '27. That is a process where we -- that we do not control, but we can speak to the leaders at the AUA. And at the earliest moment when there is the new evidence, we will submit that for -- to be part of a new guideline update. Importantly, with Surveillance Plus, it's slightly earlier in development as we have rationalized our R&D focus to be more on Triage Plus, but Surveillance Plus is in development and is expected to be analytically validated and clinically validated during FY '27. Surveillance Plus uses DNA markers and ddPCR technology. So it's only using 1 of the 2 technologies that is in Triage Plus, but it has completed a freedom to operate analysis and provisional patenting is in process. Importantly, Pacific Edge is targeting to submit Surveillance Plus for a CPT code by December 9. And Pacific Edge currently expects claim-by-claim reimbursement for Surveillance Plus from July '27 because there is no non-coverage determination for Surveillance Plus unlike our other codes. So I wanted to walk through a summary of what we actually achieved at the Contractor Advisory Committee. Importantly, there are a number of independent expert panelists, some of whom are familiar with Pacific Edge's literature and have participated in Pacific Edge's studies. They are experts in biomarkers, experts in hematuria evaluation, and they are -- many of them are among the people who within the AUA have been part of the drive for change. So what we saw on the CAC was that the committee regularly noted the strong clinical evidence supporting Cxbladder Triage and Triage Plus throughout the call. But most notably, they referred to the STRATA study and the Kaiser study. One of the STRATA study, of course, is clinical utility evidence and the Kaiser study is real-world clinical utility evidence. The panel supported the use of validated biomarkers across all hematuria risk groups. And as those who follow the company closely, you know that we have the AUA have recommended the use of Cxbladder Triage for intermediate risk. And while intermediate risk is the largest of those risk categories, that still reflects a narrower patient population than what is potentially available and how physicians would like to use the test. So this creates an extraordinary direction to us as a business to say, well done on getting guidelines inclusion for intermediate risk patients, continue to focus on higher-risk patients and repeat cases -- repeat use in recurrent cases and as an adjunct and for reflex of after inconclusive test because these are other modalities and other use cases that physicians believe are underserved. So there's more opportunity than the indication that we currently have. Logistical and economic benefits for primary care use were emphasized. And this impacts the way we think about market size. If you just use a test at secondary care at the urologist, that is a smaller market than the one that we believe in as a $10.8 billion U.S. market. And to hear our clinical advocates say on a call with Novitas that they want to see it used in primary care and that it provides health care equity for rural patients and that it can prioritize the high-risk referral, all of which leads to early detection to avoid more invasive disease. And then there are also opportunities for advancing the care for women where hematuria is often dismissed as a UTI, urinary tract infection. Furthermore, strong alignment that Cxbladder tests have robust evidence and clinical utility with several experts explicitly appealing for Medicare reimbursement and broad access to improved standards of care. And Novitas will use that panel feedback evidence that is already published and the AUA and guideline updates to decide on new coverage policy with a draft expected as per the time frames I've already outlined for you. All right. Moving on from a summary of the CAC. We have, for some time, since the moment that we lost coverage, been determined to regain it, and we are closer than we ever have been. The draft LCD release and final coverage timelines are at the discretion of Novitas and the approval process at CMS. And -- but Pacific Edge has done everything that it can to make this move ahead swiftly. The -- so we note today that since the Contractor Advisory Committee meeting, -- while the ball sits in Novitas's court, all they have to do is write the draft, send it to Novitas and have it published in the Medicare database. So we've updated the way we represent this information. And while these are management estimates, these draft coverage could be possible any time before September this year in our estimates. So Novitas controls the time line for publishing an LCD, but the framework in which they do this is governed by the Medicare program integrity manual. A draft LCD is subject to a notice and comment period for a minimum of 45 days, including an open public meeting. After draft coverage is announced, we would expect ourselves and our key opinion leaders to attend that open public meeting and also to provide comments. After the draft LCD is published, we will seek reimbursements for products covered by the draft LCD, noting that positive language for hematuria patients can be differentiated from negative language for cancer patients on the noncoverage policy, which is L39365. This will be -- this will be seen as new information to most of you on this call, but we understand that if new policy is developed that highlights how hematuria patients are distinct from cancer patients. Cancer patients have the noncoverage determination. Hematuria patients will have no coverage determination. This gives us an avenue under the 21st Century Cures Act to seek claim-by-claim re-coverage from Novitas, which we will attempt, and we will keep our investor base informed as to -- if and when we are successful with that. Importantly, Novitas must respond to all comments when finalizing the draft and may take a maximum of 365 days from draft publishing to final publishing. The finalized LCD becomes effective 45 days after being republished. Another important thing we want to highlight for investors and shareholders is that Medicare coverage has proven to be a barrier for us in the commercial payer space in some context. And while commercial payers are able to make independent medical decision, excellent example has been Kaiser Permanente and other excellent examples of that has been Blue Cross Blue Shield, specifically of North Carolina and South Carolina, but also under the group purchasing agreement that we have, commercial payers can make independent decisions. Getting Medicare coverage does remove one of the blockers for them. And commercial payers are our largest market, specifically for the intermediate risk hematuria -- microhematuria patients. So commercial payers are a significant opportunity that is almost 4x as large as our Medicare opportunity. Microhematuria patients skewed younger with commercial insurance, and that's why this represents the majority of the total serviceable market for hematuria evaluation. Final coverage policy for Medicare is expected to unlock revenue from the commercial payers because it removes a key reason they had to deny us payment on a test by providing language that commercial payers can then adopt in their own policies for positive coverage. It just makes that process easier. And then as I mentioned earlier in the presentation, we can leverage Medicare policy for any recalcitrant payers who choose not to pay for our test and to continue to deny us. We -- state biomarker laws provide us with an opportunity to pursue them with very clear legal mandate to get paid. So -- with all of that said, the commercial payer market is highly concentrated among the largest payers, particularly UnitedHealthcare and the Blue Cross Blue Shield network. But each insurer has multiple plans creating a complex coverage landscape. We focus on establishing medical policy first. And we do that either directly with payers or through third parties like Avalon, EviCore, Carelon, Concert Genetics and ECRI. And Pacific Edge has already got positive medical policy from Avalon and ECRI, and we've kept shareholders updated about that. In March 2026, Blue Cross Blue Shield North Carolina and Blue Cross Blue Shield, South Carolina adopted Avalon's policy for our first-ever published medical policies for Cxbladder Triage. And this, again, to give investors comfort about our level of confidence and timing for a Medicare LCD. This has -- this is a higher bar, than is typically needed for Medicare, and we have already achieved it. Regarding Kaiser Permanente, who are our largest customer and they -- and one of the most significant payers in the United States. Our implementation in Southern California has continued throughout the Medicare challenges that we have faced. And there are 4.9 million members in the Southern California network. We are underway with Triage and Monitor, all 15 sites. And we continue to try to drive volume growth within Southern California. However, recently, we've had the opportunity to enter into an agreement with Kaiser Permanente in Mid-Atlantic for a pilot study with a Triage protocol that mirrors the protocol that was developed with Kaiser Permanente in Southern California. And so that has a new -- it creates a new commercial opportunity that we will focus on closely. The extended -- sorry, the partnership with Kaiser Permanente has also delivered value beyond the commercial arrangement. And the -- in a couple of slides, I think I have the summary of -- No, I think in prior presentations, we've talked about, and it's in Appendix 3 of this presentation, the value of the real-world evidence study that we have done with Kaiser Permanente. It is the largest hematuria evaluation study using a urine-based biomarker anywhere in the world, and it's fantastic to continue to have them as a partner. All right. So looking at some of the financials. So the volumes fall, even though we are moving things ahead from a Medicare policy perspective and building momentum there, the overarching headwinds have been quite substantial in the U.S. We are down 16.3% on the financial year '25 after the noncoverage determination. APAC volumes showing steady increases with growing volumes outside of New Zealand is something we hope to -- it's a theme we hope to give you more on over the coming months. And global commercial test volumes -- while global commercial test volumes were down 23.8%. Triage has been growing in the share of volume, validating the importance of risk stratification, its use in microhematuria patients and the general value proposition and investment that we will need to make for Triage Plus as well. So -- on other key metrics we ask our investors to track, sales force efficiency lays down the foundations for growth. U.S. operations have faced numerous challenges, but -- and so volumes have been down. But we want to highlight for you that the clinical commitment has maintained -- been maintained roughly steadily. Even though there are fewer ordering clinicians, the tests per clinician has stayed roughly constant. We do consider that to be an extremely important metric around which we will prioritize future commercial success. Similarly, our U.S. sales force efficiency, which if we can maintain as we move forward at a -- with Medicare coverage and at a higher test price for Triage Plus, that will put Pacific Edge in an extremely good position going forward. A couple of other qualitative messages here. The APAC Commercial and Clinical Operations unit, when you exclude R&D costs, is trending towards profitability on a direct cost basis with an FY '26 cash burn rate of just over $0.5 million, which is a 40% improvement on the prior year. So we wanted to -- we've typically not broken this down for investors, and we want to make sure that you understand the parts of the business where we have not had operating headwinds, we have seen substantial improvement. Asia Pacific revenue contributed 19% of overall revenue in the second half, which is a substantial increase. Some of that was driven by a repricing initiative in 2025 that was important because our prices in New Zealand, in particular, were too low. New Zealand does still enjoy the lowest pricing within the Asia Pacific region as our home market. Wider adoption of Triage Plus over legacy products has the potential for an additional 20% more revenue growth from the same number of tests. And of course, we continue to expect ourselves to grow the testing volume. So in New Zealand, we are seeking a national hematuria evaluation pathway. Approximately 70% of New Zealanders have access to Cxbladder testing, but we estimate that probably only around 35% to 40% of the market is genuinely using. A national pathway will help to reduce that gap, ensure health equity for everyone who has hematuria regarding their risk for bladder cancer. Australia continues to be in business development, but we have had some recent success focused on hospital contracting. We signed Townsville, and they have become one of our more productive users of Triage Plus right out of the gate. Our longer-term strategy for Australia is to have the tests run in Australia and to be able to get MSAC reimbursement for that when we have simplified Cxbladder to the point it's a kit-based IVD. In Southeast Asia, the business development with some early wins. And the most notable of these, of course, is Singapore General Hospital. They have implemented the first clinical pathway for Cxbladder products in March 2026. The market in Singapore is very different from our home markets and from the U.S. market. Health insurance is largely through -- slightly paid by the patient, but they do have personal health insurance accounts that are set up specifically to be able to pay those patients. Given those market dynamics, we're not yet bullish on how this will play out. We are actively -- but it is a source of focus for us in how we drive additional volume and additional revenue from Singapore. So moving on to our outlook slide, and this is where we will stop and take a few questions. We do have a draft local coverage determination sometime in our near future and expected any time before September 2026. We are seeking claim-by-claim reimbursement for hematuria testing after draft coverage, noting that we expect the policy to differentiate between hematuria patients and cancer patients. The CAC gave a clear endorsement of this position, which is why we believe that Novitas is working expediently. We understand that from the perspective of the company and from the perspective of our investors, we've all been waiting a very long time for this. But it is -- we have done the work, and we now -- and we expect policy shortly. Advancing medical policy for Triage will continue as we try to mirror what we've already achieved with ECRI and Avalon for other third-party payers and Cxbladder is under consideration by Health New Zealand for a national pathway. Our clinical evidence drives medium-term valuation, clinical evidence generation continues. The DRIVE publication specifically published support for Triage Plus, clinical validity standard, and that can be sufficient for coverage when there is already an established policy on which it would fit. Kaiser Permanente study shows real-world evidence for Triage in the largest urine-based biomarker study of hematuria patients. Our 4-year evidence generation program will continue to develop more evidence because evidence generation does need to continue to maintain our market-leading position. The AUA have given us great evidence. ECRI have given us a 4 out of 5. These are substantial. These are meaningful. The quality of our evidence is noted, and it is up to us to move on from these kind of clinical and evidence-based milestones to focus on our commercial payer adoption and our commercial metrics. And long term, we continue to invest in our products, both the new -- the migration of Monitor to Surveillance Plus and also in a smaller capacity given the current R&D prioritization that we're undertaking, we still maintain an interest in bringing kitted IVDs to market to enable decentralized international deployment, and we will be looking to all of those. I'm going to stop the presentation there. The rest, of course, is available to you online, and we can take a couple of questions, Grant and myself.

[Operator Instructions] And your first question is from the line of Ben Crozier from Forsyth Barr.

Congrats on a comprehensive presentation. Just first question for me, sort of what gives you the confidence that you'll be able to get this claim-by-claim reimbursement based on the draft decision rather than the final decision? Is that you've had some conversations with Novitas or have others done -- have gone along that similar path?

So there's a couple of moving parts to that, all of which we mentioned in the presentation. So the key thing is that there is a mandate for the creation of hematuria policy. That's what the CAC made really, really clear. The type of LCD that our noncoverage is on is they ended up calling it specific tests in oncology. And so it was -- and it was focused on patients that had cancer or the suspicion -- the substantiated suspicion of cancer. And the CAC made really, really clear that hematuria patients are different from that group. And the way that folks who developed policy, historically, Novitas has developed a policy that just says a code is paid or not paid. But we understand that is not the same at MolDX, and that's not actually the best way to develop policy. And when you have 2 policies that might conflict, all you have to do is specify the patient population first. So for hematuria patients, our test would be covered for cancer patient, our test would not be covered. And by the way, that's an argument that we have made for 2 or 3 years to Novitas and to CMS when we have presented to them and through the various comment periods and rebuttals that we put out. So we understand that they have -- they are listening because it's the only thing that really makes sense in this situation. What gives us -- so we haven't put a number on our level of confidence so that we're confident the path is available. And that's why we have been clear with our language that we will be seeking. And the 21st Century Cures is an act that allows a test that if it is -- if we can demonstrate that it is not noncovered, that is something that Novitas could, in theory, be able to pay for.

And then maybe just one on sort of the cost base sort of if Novitas come to the party and give a positive decision, where do you think the cost base goes from here? I know that the sales force headcount has come down a bit over this year. Does that need to return to prior levels to achieve your ambitions in the U.S.? Or is the cost base around current levels that will be sufficient, do you think?

Yes. So look, referring to an earlier slide in the presentation, we are going to be focused on profitability. And so yes, there will need to be some changes to the cost base, but that's not where you should focus. We will be focused on ensuring that the commercial teams that we have are bringing in more revenue than it costs to operate them. And that's what's so important about, number one, Medicare coverage; but two, the potential for Triage plus coverage, which, again, we're quite confident about that because that information is available to Novitas. So when you start to stack up those things with yes, in a post-coverage scenario, we will be focused on profitability. We'll be focused on integrated delivery networks and other and hospital systems and institutional selling as ways that we can scale revenue more effectively and make -- and minimizing the change in cost base. So of course, the moment we can operate -- we can reliably operate sales reps and get them trained and get them profitable quickly, it obviously becomes important for us to scale at that point.

Yes. And then maybe just also on the mix of Triage and Triage Plus. How quickly can that change whereas Triage Plus is the dominant product for you guys? Is that a sort of overnight one as soon as you get the Novitas decision come through, you can use that rather than...

Yes, it's a great question. It's different in different markets. In the New Zealand market, because the price difference is not particularly substantial. We will keep Triage and Detect and Monitor around for quite a while and offer customers both. However, in the U.S. where the price difference is substantial, there's a really good commercial driver for us to switch quickly. And I think I talked about this as far back as 2 shareholder meetings ago that we do have the ability by what test request form we put into our kits, we can -- that's what can come back to our lab. Now that notwithstanding, we anticipate that Kaiser would be on its own trajectory to migrate to Triage Plus. But for the bulk of the market, we would want to switch to Triage Plus if and when covered as quickly as we can. But it depends on the -- how we have to first establish that we are getting paid just as successfully on Triage Plus as we will be on Triage.

[Operator Instructions] There are no further questions on the phone. I'll hand over to management for any written questions.

Great. Thank you. There have been some written questions. The first of them comes from Ken, and it's also a question that's come from Andrew. So thank you for that. So with the current cash burn, the proposed raise provides about 12 months of runway. Does this give you enough cash to bridge the timeline to profitability? And what does this mean for future capital?

So I'll do my best to answer that question, but it's kind of similar to the concept I was talking about before. So we first need the draft coverage decision to be able to reliably answer that question. But given the expectation that we have set that we expect draft coverage sometime between now and September and that we expect full coverage between -- before March 2027, we -- any future capital raise would be under vastly different conditions where we would know the answers to those questions. So we are focused on making sure that we have the draft coverage and delivering revenue from the tests in the meantime and reducing the burn rate to minimize any potential further capital raise.

Thanks, Peter. Next question is from Scott. What gives you so much confidence that Medicare will view this request differently than they have previous considerations?

So I guess I'm not quite sure what that's alluding to, but we have been in dialogue with Novitas and Medicare for a while at this point. And we have generated -- and we talked about this, I think, in my last investor newsletter and probably at the last half as well. We've put in a lot of work to demonstrate -- to educate them and to show that we are -- to generate goodwill with them by educating them. And as a consequence of that, while there are many things that they can't tell us, they cannot tell us what the coverage policy is, and they cannot tell us when things will happen. They can -- they have indicated to us that they understand that prior policy does not match what the guidelines are saying. They have given us that indication, and that's been published for some time. So it's those interactions that give me the confidence that there is a recognition from the people who will ultimately make these decisions and they'll make these decisions based on their timeline and the published evidence, but there is a recognition from them that having guideline recommended care with a noncoverage termination doesn't make any sense.

Thank you. A question from Adrian. Okay, assuming there's a draft and positive LCD before September '26, how much revenue increase could we expect in the current financial year?

Look, we won't comment on that. But I think you can assume that all of our hematuria tests will be -- if we're successful, they would be paid for. That's the upside that we're trying to achieve.

And just to note, paid for at a higher rate, assuming Triage Plus coverage.

Yes.

Great. Andrew, another question. So kitted IVDs, how is the development progressing?

Look, at this point, that is one of the R&D priorities that has been deprioritized out of the intent to focus on mostly Triage Plus and secondary Surveillance Plus. So look, we'll speak to those milestones as and when we achieve them, but there's nothing further to announce at this point.

And then the last question we have is, is there any update on the legal cases? And I assume that means the administrative law judge cases that we're taking.

Yes. So to just answer the question briefly. Yes, we have started to get some rulings from the ALJ. And -- but we do not have enough information to be able to comment about what the trends are and what the changes are. So we're adjusting our legal strategy to maximize any revenue that we can from tests that we are appealing. But there's nothing to update the market on at this time.

No more questions.

Awesome. Thank you very much, everybody.