The market for medical technology is set to grow to more than $US500 billion by 2020 — but to succeed, players must not only sell devices, they must also offer high-quality ongoing service in an environment where a patient’s life may be at stake.

After-sales service is a key difference between a successful “MedTech” stock and a failure, new research from consultancy Bain suggests.

There are more than 50 ASX-listed stocks that are going after a slice of the MedTech market — which includes machines that simplify the prevention, diagnosis and treatment of illnesses such as imaging instruments, dialysis devices, diagnostic technology and wearables.

But many medical equipment manufacturers “run their service businesses below their full potential”, producing “negative effects on customer advocacy and sometimes revenue”, says Bain.

Investors looking for MedTechs that will succeed over the long term should pay close attention to their service offerings such as maintenance, performance optimisation and operational outsourcing.

“Good service is among the top three reasons surgeons and procurement officers recommend a manufacturer, while poor service is one of the top two reasons they become detractors,” the Bain report says. 

Red flags to watch out for include inconsistent costings, unwillingness to take on board customer feedback and poor organisational structure.

Beware of MedTechs that take a “global mindset toward research and development, supply chain and product management” while neglecting the service side of their business.

There are more than 50 ASX-listed MedTech stocks. (See our table below).

Volpara Health (ASX:VHT) is the best performer over the past six months.

Its digital health services provide breast imaging analytics and analysis products, aimed at reducing the mortality of breast cancer as well as diagnostic costs for both clinicians and patients.

The company says that it has recognised that traditional breast cancer screening can result in unnecessary pain for women; either from compression being too hard or radiation doses being too high.

Its share price is up 135 per cent in the past six months to $1.48.

Anti-snoring company Rhinomed (ASX:RNO) has doubled in the past six months. Investors jumped on board in October after it clinched a 12-year cannabis licensing deal with a New York company.

The deal is for Rhinomed’s anti-snoring nose stent Mute, which Columbia Care are going to adapt to use to deliver a slow-release dose of cannabis for, initially, sleep apneoa, pain control and PTSD.

Genetic Signatures (ASX:GSS), which develops high-tech tests to screen for infectious diseases, has also doubled over six months after signing a deal with a pathology group and releasing new products in August.

Here is a table of ASX-listed small cap medtech companies with recent share price changes.

Scroll or swipe for full table. Click headings to sort

ASX code Company 6-month price change 12-month price change Price Nov 8 (intraday) Market Cap
VHT VOLPARA HEALTH T 1.35 1.28 1.48 254.4M
RNO RHINOMED 1 0.5 0.24 27.7M
GSS GENETIC SIGNATUR 0.93 0.71 0.58 60.3M
FTT FACTOR THERAPEUT 0.75 0.27 0.07 59.2M
AVH AVITA MEDICAL 0.67 0.58 0.087 114.1M
MGZ MEDIGARD 0.56 1.8 0.028 3.8M
AMT ALLEGRA ORTHOPAE 0.5 0.4 0.21 20.9M
PIQ PROTEOMICS INTER 0.44 0.56 0.28 21.2M
AZV AZURE HEALTHCARE 0.33 0.19 0.089 20.7M
PME PRO MEDICUS 0.27 0.48 10.3 1.1B
NAN NANOSONICS 0.21 0.09 3.155 923.3M
PNV POLYNOVO 0.2 0.74 0.608 394.9M
OSL ONCOSIL MEDICAL 0.18 0.39 0.195 123.0M
GMV G MEDICAL INNHOL 0.12 -0.17 0.325 121.5M
NHL NOVITA HEALTHCAR 0.11 -0.33 0.03 13.5M
JHL JAYEX HEALTHCARE 0.11 -0.22 0.021 3.5M
GTG GENETIC TECH 0.1 0.57 0.011 29.1M
RHT RESONANCE HEALTH 0.07 0.5 0.03 10.1M
MX1 MICRO-X 0.07 0.04 0.395 54.9M
CMP COMPUMEDICS 0.05 0.13 0.4 72.6M
M7T MACH7 TECHNOLOGI 0.04 0.32 0.25 31.1M
UBI UNIVERSAL BI-CDI 0.02 -0.28 0.24 42.4M
ELX ELLEX MEDICAL LA 0 -0.3 0.7 95.5M
CYC CYCLOPHARM -0.07 0.03 0.965 66.3M
BRC BRAIN RESOURCE -0.08 -0.46 0.035 20.7M
COH COCHLEAR -0.1 -0.05 173.11 9.9B
ADH ADAIRS -0.12 0.19 1.938 315.2M
ALC ALCIDION GROUP L -0.13 -0.14 0.042 33.8M
IBX IMAGION BIOSYSTE -0.13 -0.51 0.048 9.9M
OIL OPTISCAN IMA -0.13 -0.37 0.059 26.0M
MDR MEDADVISOR -0.14 -0.3 0.037 49.0M
1ST 1ST GROUP -0.15 -0.32 0.034 7.0M
GLH GLOBAL HEALTH -0.16 -0.34 0.19 6.4M
OSP OSPREY MEDIC-CDI -0.19 -0.63 0.153 60.6M
LBT LBT INNOVATIONS -0.21 -0.63 0.099 19.9M
RVA REVA MEDICAL-CDI -0.24 -0.65 0.22 99.6M
OVN OVENTUS MEDICAL -0.24 -0.46 0.28 30.2M
RAP RESAPP HEALTH -0.25 0.42 0.105 76.2M
LSH LIFESPOT HEALTH -0.27 -0.35 0.084 6.5M
NUH NUHEARA -0.31 -0.03 0.062 53.5M
PCK PAINCHEK -0.31 -0.13 0.048 40.2M
MVP MEDICAL DEVELOPM -0.33 -0.23 4.96 317.9M
AHL AHALIFE HOLDINGS -0.35 -0.64 0.013 8.1M
ALT ANALYTICA -0.38 0.25 0.005 16.7M
IPD IMPEDIMED -0.39 -0.55 0.348 125.1M
ADR ADHERIUM -0.44 -0.13 0.07 13.6M
ONE ONEVIEW HEAL-CDI -0.44 -0.58 1.05 70.3M
RSH RESPIRI -0.44 1.28 0.089 43.6M
SOM SOMNOMED -0.45 -0.55 1.62 100.8M
DVL DORSAVI -0.5 -0.76 0.068 11.4M
AXP AIRXPANDERS-CDI -0.61 -0.93 0.042 22.9M
NTI NEUROTECH INT -0.65 -0.64 0.067 7.6M
MEB MEDIBIO -0.7 -0.88 0.046 9.1M