For Pro Medicus, it's pedal to the metal with US contract wins. Pic via Getty Images
Health & Biotech
On the back of his company’s record first half revenue and net profit unveiled today, Pro Medicus (ASX:PME) co-founder and CEO Sam Hupert says new and renewed contract wins will propel the home-grown radiology champ to a buoyant current half as well.
Pro Medicus reported revenue of $97.2 million, 31% higher and a net profit of $51.7 million, 43% to the good.
Of the turnover, North America (read: the US) accounted for $86.4 million, up 35%.
Profit margins spiked to 72%, from 66% previously and the debt-free company’s cash kitty swelled 18% to $182 million.
“It was our biggest half in terms of upticks in revenue, net profit growth and retained earnings,” Hupert says.
“It was also by far our biggest half in terms of new contract wins, contract renewals and upgrades, all of which we think set us up for the second half.”
Over the period Pro Medicus landed $365 million of new contracts, across seven to ten years.
The company also secured a $98 million US contract extension and signed up an Australian radiology provider on a $32 million deal.
Hupert says the company has had “unprecedented success” in converting its sales pipeline to solid contracts.
“In the last two months alone, this has resulted in contracts with a minimum value of $485 million including University of Kentucky and Bay Care which were signed in January.
“We continue to build the pipeline of opportunities across all market segments, and across all client sizes.”
The perennial question is whether the growth prospects justify the company’s astounding $31 billion market cap.
Indeed, RBC Capital Markets dubs the result as “below lofty Street [market] estimates”.
But Hupert says the Pro Medicus growth engine is only just warming up.
He cites November’s $330 million contract win with not-for-profit chain Trinity Health – its biggest ever – that expanded the company’s US market share from 7% to 8%.
“[This] reinforces just how large an opportunity the US is for us,” he says.
“Roughly 60 cents of every dollar spent on healthcare globally is spent in the US. It is a huge market so there is plenty of runway despite a slew of recent wins.”
Pro Medicus shares this morning motored up 3% – to a record high, of course – before stalling.
Apologies to those who think the Trump obsession is getting boring – and would prefer sport to return to the front page.
For those fascinated by the Trump Ascendency, today’s musings come courtesy of Syntara (ASX:SNT) chief Gary Phillips, who notes that “politicians come and go”.
Following Syntara’s highly positive trial results for its myelofibrosis therapy, the company is girding to chat to the US Food & Drug Administration (FDA) about the structure of a registrational trial.
“My view is the FDA is an extremely professional outfit. Politicians come and go,” he told Stockhead.
“Timelines may be shorter or longer, but the bedrock of their processes will stay in place. It won’t change data you need for approval.”
Having survived a congressional grilling, Robert F Kennedy Junior is poised to be confirmed as health secretary.
Reading of murky tea leaves suggests he may direct the FDA to hasten the approval process, at least for certain therapies.
Phillips suggest any slackening of approval standards will last only until the first patient dies from a flawed therapy being approved.
Think Thalidomide in the 1960s.
“Strategy never survives first contact with the enemy,” he says – something Trump should keep in mind with his Mar-a-Gaza condo vision (or brain fart).
According to the US healthcare newsletter Stat, Trump’s “disruptive” policies are alarming scientists and weakening their resolve to stick with careers in academic science.
“Already, the anxiety is so deep that many scientists say it could undermine the country’s enduring position as the world leader in biomedicine,” Stat says.
“More than a dozen scientists and academics expressed concern that talented young scientists may abandon academic research, which drives medical and scientific innovation, for jobs in industry or other careers.
“Senior scientists warned that researchers might leave the US in search of more stable opportunities abroad — and Stat spoke with scientists who are considering doing exactly that.”
In the words of one US academic: “there’s a fire sale of American academics right now”.
Sadly we hit a paywall at that point, but it looks like an interesting yarn.
Ahead of a capital raising to be unveiled by the end of the week, Artrya (ASX:AYA) has entered a supply deal with local (and global) radiology imaging giant Sonic Healthcare.
Officially, the deal is immaterial because the company does not know how much revenue will flow from the subscription-as-a-service deal.
But CEO Mathew Regan dubs the win as a “significant milestone for our commercial growth in Australia”.
Under the three-year agreement, Sonic will use Artrya’s algo-driven coronary heart disease detection tool, Salix. for coronary computed tomography angiography (CCTA) scans.
Salix “enhances enhance accuracy and efficiency in detecting stenoses and other critical markers, including high-risk plaque from CCTA scans, whilst also optimising clinical workflow”.
Artrya expects initial revenue in the June quarter
Sonic Healthcare is Australia’s second largest diagnostic imaging provider, with more than 125 centres.
Sonic will use Salix in all of its centres that perform CCTA scans.
Meanwhile, Artrya awaits FDA approval of Salix Coronary Artery, under the 510k ‘predicate device route.
The company expects approval by the end of March.
In anticipation, Artrya has secured deals with three US east coast hospital groups, providing access to 15 hospitals and hundreds of specialist clinics.
To expand US reimbursement, Artrya is eyeing clearance for two product variants by the end of calendar 2025.
Artrya shares are in trading halt.
Health & Biotech
Health & Biotech
Health & Biotech
