The approvals gives Pacific Edge access to about 20 million Americans. Photo: Supplied / Pacific Edge
Bladder cancer diagnostics company Pacific Edge has suffered a blow after a US Medicare provider said it would no longer cover the use of Pacific's flagship CX Bladder test.
US firm Novatis has decided to withdraw Medicare health insurance reimbursement for the cancer test, which it said was "not considered medically reasonable and necessary".
The US sales of the CX test accounted for around two-thirds of Pacific Edge's income.
The Dunedin-based company sought and was given a halt in the trading of its shares as it digested the news.
"The trading halts ... provide the company time to better understand the implications ... and consult with our US legal advisors and other industry participants, before providing an update to all stakeholders," the company said in a market release.
However, stock analysts were quick to highlight the seriousness of the loss of Medicare coverage.
Jarden Securities analyst Christian Bell said the decision was a surprise and the analysis of the evidence appeared "left-field".
"Given the demonstrable change in facts, we expect investors are likely to question if PEB has sufficient cash and resource to address the issues presented - likely presenting material downside risk to the current share price."
Pacific Edge shares closed at 49.5 cents on Friday, and have traded between 39 and 90 cents over the past year.
Forsyth Barr analyst Matt Montgomerie said it was "not good news" for Pacific Edge and while a revision of the decision could be applied for industry feedback was "the probability of a change in the near-term is low".
Last month Pacific Edge reported an increased loss of $27m as it invested in marketing and development, but also reported strong growth in sales of the CX Bladder test.
