Pacific Edge shares in trading halt as Jarden ponders Novitas notice

Jarden analysts are pondering the impact of Medicare contractor Novitas not covering Pacific Edge’s Cxbladder in its local cover determination, while the healthcare company’s shares are in a trading halt pending a material announcement

Analyst Christian Bell said in a note that the decision is a “demonstrable change in circumstances” removing Medicare coverage in the US and calling into question “the foundational evidence that supports the clinical validity of all Cxbladder tests”.

“The decision comes as a surprise, and analysis of evidence appears left-field.

“Pacific Edge is yet to make an announcement but given what feels like a change in scope, we are not sure if there is potential grounds or the ability for Pacific Edge to make an appeal.”

Bell said it isn’t clear whether the Novitas decision will affect other Medicare administrative contractors.

While the company had cash and equivalents of about $77.8 million as at March 31, Jarden’s Bell said he expects investors will question whether the company has enough cash to address the issues, “likely presenting material downside risk to the current share price”.

Pacific Edge this morning asked NZX regulators to place its shares in a trading halt saying this would be lifted following an announcement.

More to come.