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ASX market darling Pro Medicus surges on breakthrough US contract

The business posted a net profit after tax of $23.1 million in 2020.

Pro Medicus has spent recent years rolling out its medical imaging platforms into hospitals. While the coronavirus pandemic has raged, the company has signed five major deals in six months.

Its agreement with Intermountain Healthcare will be worth $40 million and will see two Pro Medicus products, the Visage 7 Viewer and Visage 7 Open Archive, deployed across 24 hospitals and 200 clinics in Intermountain’s network.

The firm’s product suite lets radiologists to organise, enhance and manipulate medical images, including generating 3D images from scans to get a better picture of patient health. Its archiving system stores scans, with the platform allowing medical professionals to view information remotely.

Last December, Pro Medicus signed another $18 million deal with Maryland and Washington D.C. healthcare operator MedStar.

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Dr Hupert said while the coronavirus pandemic had an initial impact on radiology volumes, these have now largely bounced back. The company’s contract pipeline has also been largely unaffected by the virus, he said.

“Thankfully they [healthcare operators] realised the world is bigger than COVID, particularly medically.”

Dr Hupert said he wasn’t paying a great deal of attention to the company’s valuation, but was instead focused on competing with larger global firms for contracts with hospital operators.

“We are slugging it out with all the large corporates… and the product we have actually does something really good.”

RBC Capital Markets analyst Garry Sherriff said the company was accelerating its contract win momentum and that the recent focus on deploying its technology via the cloud is a strength.

“We are positive on the benefits of PME’s cloud-native product suite as cloud deployments are in our view more scalable and able to be implemented faster for customers, driving greater growth over the medium term,” he said.

Dr Hupert said the past year has highlighted “the must-have tech” in hospital settings and this places Pro Medicus in a good position for growth. The company offers “private cloud” setups where data is stored within the healthcare’s own data centres, or public cloud options involving providers like the Google Cloud Platform.

“We will see a broader swing towards cloud. More and more health centres and generalists are saying they don’t want to host their own data centres,” he said.

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