Pacific Edge : Investor Update Apr 2023

Dear Shareholders,

The close of the March 2023 quarter represents the completion of my first full financial year leading Pacific Edge. While we are still seeking clarity over continued Medicare coverage of our tests in the US, I am pleased to share my sense of pride with what we have achieved.

Throughout the year we have

laid the foundations for success and resilience in the US by executing on the strategic pillars outlined a year ago 1) the adoption and more frequent use of Cxbladder tests;

1. generating clinical evidence to support Cxbladder coverage and their inclusion in global standards of care; and 3) continued innovation over the long term.
   Steady quarter-on-quarter improvements have continued in the final three months of FY23.
   The volume of tests processed in our laboratories reached a record 8,878 in the quarter (Q4 23) - a 14% increase on the prior quarter (Q3

1. and up 42% on the same quarter a year ago (Q4 22).
   The result brings total testing
   volumes for FY 23 to 31,566 - a 37% uplift on FY 22's 23,086 tests. The number of US ordering clinicians has also continued to rise (see page 3). At the start of the third quarter,
   Cxbladder Triage received a CPT1 code and was added to the Novitas Local Coverage Article (LCA 58917) which Pacific Edge relies upon for Medicare coverage for all our tests in the US.
   This development recognizes that Triage now is covered subject

to medical necessity in the same manner as Detect and Monitor. Consequently, we expect it to drive a modest improvement in payment recoveries from Medicare and Medicare Advantage payors. However, we do not expect it to drive a significant uplift in usage of Triage in the US as we focus our efforts on Detect+ (see page 4).

The approach of gaining a CPT code and the inclusion in the LCA58917 also potentially offers a faster and tangible path for coverage for our new test Cxbladder Detect+, assuming of course the current or similar approach to

US reimbursement of our tests is retained.

The integration of Cxbladder

into the Electronic Medical Records system of our largest customer Kaiser Permanente, has progressed, but not as fast as we expected. The development teams on both sides have now completed the software development and integration testing, however, due to the substantial nature of the integration into a live system at Kaiser, additional administrative and review processes remain to be completed (see page 5).

Despite these recently added administrative requirements, the Kaiser urologists, the innovation group, the EMR implementation team and the Pacific Edge team continue to share a common goal and a common commitment to completion as soon as feasible.

Our evidence generation program continues to evolve, particularly in furtherance

of achieving guidelines recommendations. Notably we have launched a new study with the VA, we have called microDRIVE, which in combination with existing studies is aimed at demonstrating the clinical validity of Cxbladder Detect+ in detecting bladder cancer in patients presenting with microhematuria. Independent studies on the utility of Cxbladder products meanwhile continue to support the evidence we gain from our own program (see page 7 and 8).

Late in the quarter, we signed a distribution agreement for Cxbladder in Israel with the Tel Aviv-based company ProGenetics as we consider global markets with an appetite for genomic oncology tests that can be sent to our US Lab (see page 6).

Finally, we continue to build capability in the leadership team. In this update we profile two new members, Glen Costin who has been appointed as our new APAC President (page 8) and Dr Daniel Shoskes, who joined a few months ago as a Medical Director in our Medical Affairs team.

Our focus now is firmly on execution. We look forward to updating shareholders on our progress when we release our 2023 financial results in late May.

Ngā mihi,

Dr Peter Meintjes

Chief Executive

MEDICARE COVERAGE

CXBLADDER TRIAGE GAINS MEDICARE COVERAGE

Cxbladder Triage, our test to assist clinicians to safely de- intensify hematuria evaluation in populations with a low incidence of bladder cancer, has now been included in the Local Coverage Article (LCA 58917) that Pacific Edge currently relies upon for Medicare coverage of all our tests in the US.3

Novitas, the Medicare Administrative Contractor with jurisdiction for Pacific Edge's US laboratory, listed Triage in its LCA in January as a test covered with medical necessity. It follows the issuing of a CPT4 code (0363U) in the third quarter of the financial year.

We expect the development to lead to modest increases in rates of payment from Medicare and Medicare Advantage payors for Triage. We also see coding and listing in LCA 58917 as a faster more tangible path for our enhanced test Cxbladder Detect+ to gain coverage, should the current approach to reimbursement of our tests in the US continue.

"We expect the development to lead to modest increases in rates of payment from Medicare and Medicare Advantage payors for Triage."

That said, we do not expect the development to drive a significant increase in adoption of Triage in the US. Triage currently makes up a small fraction of commercial testing volume in the US outside of those contracted by our largest US customer Kaiser Permanente. Triage also still needs a price, established by Medicare through the national pricing process, which will make reimbursement more reliable and timely by Medicare and Medicare Advantage payors around the US.

Finally, going forward in the medium term, Pacific Edge plans to promote Cxbladder Detect+ rather than the existing Triage test as the best test for risk stratification and de-intensifying hematuria evaluation. This new approach follows the publication in December5 of clinical evidence that demonstrated the superior performance of Detect+.

We also acknowledge the potential for Cxbladder Triage to lose its coverage in the same way as Detect and Monitor if a proposed Local Coverage Determination governing Genetic Testing for Oncology (DL39365) were to be finalized without changes and without addressing the comments and concerns from Pacific Edge.

Novitas put forward DL39365 in July 2022, and must either finalize or withdraw it within 12 months of the date of the proposal.

1. Novitas has a policy of covering products on LCA 58917 under the 21st Century Cures Act, if clinicians deem the tests medically necessary, until the publication of an LCD either covering or denying coverage of a product.
2. Current Procedural Terminology code is a set of medical codes created and maintained by the American Medical Association that are used to describe medical, surgical, and diagnostic services performed by healthcare providers in the United States.
3. Lotan et al 'Urinary Analysis of FGFR3 and TERT Gene Mutations Enhances Performance of Cxbladder Tests and Improves Patient Risk Stratification' J Urol. 2023 Apr; 209 (4): 762-772.

SAVE THE DATE

CONNECT WITH US AT OUR

2023 ANNUAL MEETING

Pacific Edge's 2023 Annual Shareholders Meeting will this year be held in Auckland and we will be using it to connect shareholders with the strategies we are using to drive the success of Cxbladder in the US market.

Pacific Edge Diagnostics USA President David Levison and VP of Medical Affairs, Dr Tamer Aboushwareb, who are both on the frontline of driving the adoption of Cxbladder, will address the meeting and take shareholder questions.

As usual our directors and senior management will also be present to meet shareholders. All shareholders unable to join in person in Auckland will be able to join virtually. More detail on the meeting will be released with the publication of our Annual Report.

Where: Link Market Services

Board Room

Level 30, PwC Tower

15 Customs Street West Auckland 1010

When: 3:00pm 27 July 2023

Connect virtually: www.virtualmeeting.co.nz/peb23

Pacific Edge has now completed the software development

and integration testing on its project to integrate Cxbladder into the Electronic Medical Records (EMR) system of Kaiser Permanente. We continue to complete the administrative and review processes required to be a registered supplier to Kaiser Permanente to enable the project to go live.

We are excited to have achieved the important technical milestones in the project, which has spanned many teams and many person-hours across

the Kaiser system, our team in the US, and our team in New Zealand.

We have significantly de-risked the project and importantly, the Kaiser urologists, innovation group, EMR implementation team and Pacific Edge team continue to share a

common goal and a common commitment to completion as soon as feasible.

"Cxbladder tests have improved access to urology care as Kaiser has emerged from the pandemic."

Kaiser Permanente Southern California Permanente Medical Group urologist Dr Ronald Loo, MD, says the Cxbladder tests have improved access

to urology care as Kaiser has emerged from the pandemic with unprecedented demand for services.

"The very high negative predictive value of the Cxbladder tests have allowed us to improve access by safely

reducing overwhelming demand for screening and surveillance cystoscopy. It's proven to be a quadruple win: convenient and preferred by our members, high quality - reliable results, cost effective for the organization, and a sustainable way to improve the wellbeing of our healthcare teams," Dr Loo said.

Kaiser Permanente is the largest integrated healthcare provider in the US, serving 12.6 million members, which equates to approximately 3.7% of the population in the USA. It operates 39 hospitals, more than 700 medical offices, and employs 23,656 physicians and 65,000 nurses.