Pacific Edge shares fell 37.8% to 48.5 cents. Photo / Provided
Shares of Pacific Edge have fallen nearly 50% on the possibility that its cancer screening tests will no longer be covered by a major American health insurance company after the cancer diagnostics company ceased operations .
lifted at market open today.
But bad news from Pacific Edge was not enough to drag the market down as infrastructure group Infratil lifted the main index following the announcement of its $300 million ($476 million) deal. dollars) with a German insurer.
The S&P/NZX 50 Index rose 33.2 points, or 0.29%, to 11,525.87. Revenue was $89.6 million.
Pacific Edge told NZX this morning that its cancer tests may be scrapped by a major US health insurance company that is considering a new way to choose which tests are covered.
Health insurance provider Novitas currently reimburses the use of Cxbladder – but will not do so under a new process it has proposed.
If the proposal passes, Pacific Edge said Cxbladder would no longer receive reimbursement from Novitas, which represents “a significant portion” of current testing revenue. The company’s shares almost halved when the trading halt was lifted at the market open, falling 48% to just 40 cents – their lowest price since 2020.
Peter McIntyre, investment adviser at Craigs Investment Partners, said it would be a “big blow” to the company if this US source of income was cut.
He said it was not surprising how the market reacted to the news and commented that Pacific Edge appeared “quietly confident” in its announcement – so all hope was not lost.
Pacific Edge shares made up some lost ground late in the day, but were still down 37.8% at 48.5 cents.
It was Infratil’s investment announcement in Longroad Energy that helped lift the market after the infrastructure group told NZX it had agreed to sell a 12% stake to the insurer German Munich Re for $300 million. The deal assigns a pre-money valuation of US$2 billion to the renewable energy developer.
Infratil shares rose 6.7% to $8.94 at the end of the day.
Shares of Plexure Group also rose 77.6% to 32.5 cents – up 14.2 cents today – on renewing the five-year contract with its biggest client, McDonald’s.
Chief Executive Dan Houden said he was excited about the continued partnership with the fast-food chain and looked forward to working towards their shared goal of providing “great experiences” for McDonald’s customers.
On the construction front, Fletcher Building fell 1.9% to $5.06 and land development company CDL Investments also fell 3.5% to 84 cents.
New construction consent data from Statistics NZ this morning said the year to June 50,736 residential consents was slightly lower than the previous month of the year to May with 51,015 consents – but marked still the fourth month in a row that the annual number of new homes granted exceeded 50,000.
“Home-based consents remained near historically high levels, with declines in the number of single-family homes being more than offset by high levels of consent activity for multi-unit homes,” said Michael Heslop, head of statistics on the construction and real estate.
The number of self-contained homes granted in June fell 5.5%, following a 1.6% drop in May 2022.
Since June 2021, permits for single-family homes have fallen by 21%. Aged care provider Ryman Healthcare was up 0.8% at $9.35, but senior care services were down 12.2% at $1.94 by the end of the day.
Third Age Health Services told shareholders on Friday that the Napier High Court had placed the residential aged care group into liquidation, with Waterstone Insolvency’s Damien Grant and Adam Botterill appointed as liquidators. Radius Residential Care also fell 4.2% to 34.5 cents.
Shares of Fonterra’s Shareholders’ Fund were down 1.6% at $2.97 in the early evening. Fonterra is closing its milk powder plant at its Brightwater site near Nelson in April 2023, with the loss of 30 jobs, as it grapples with a dwindling milk supply. The small aging plant converts approximately 0.25% of Fonterra’s total milk supply into whole milk powder.
The New Zealand dollar was trading at 62.92 cents US at 3pm in Wellington, down from 62.95 cents on Friday. The trade-weighted index was at 71.27, down from 71.10 on Friday.
The Reserve Bank of Australia is due to release its cash rate decision tomorrow afternoon and CMC analyst Tina Teng said it was “almost certain” the RBA would raise the cash rate by 50 basis points. additional basis at 1.85%.
“Good jobs data won’t dampen the Reserve Bank’s rate hike pace,” she said.
“But less aggressive rhetoric from the Fed last week could encourage a slowdown in the RBA after September.”
– Business office