MoneyTalks: Morgans’ Scott Power spotlights three ASX healthcare stocks

MoneyTalks is Stockhead’s drill down into what stocks investors are looking at right now. We tap our list of experts to hear what’s hot, their top picks and what they’re looking out for.

In this edition we hear from senior healthcare analyst at Morgans Financial Scott Power. 

Scott Power is one of Australia’s pre-eminent experts in emerging healthcare. Clocking up close to 30 years at Morgans Financial he has built a reputation as a trusted voice spotting trends and assessing the health of Australia’s emerging healthcare sector.

Australia has a proud history of producing world-class technology, particularly in the life sciences sector with ASX heavyweights such as CSL (ASX:CSL), Cochlear (ASX:COH), ProMedicus (ASX:PME) and ResMed (ASX:RMD) establishing themselves as market leaders.

Power believes there are several other emerging ASX healthcare companies with potential to follow in their growth footsteps, presenting opportunities for investors.

Here’s three companies Power reckons are worth investors taking a closer look.

Micro-X (ASX:MX1)

Adelaide-headquartered Micro-X has developed a proprietary cold cathode, carbon nanotube (CNT) emitter technology that significantly reduces the size and weight of X-ray machines, making them more portable.

Their Nano Electronic X-ray (NEX) technology uses carbon nanotubes to generate X-rays without the need for traditional heating elements, resulting in devices that are smaller, lighter, and more energy-efficient.

Micro-X recently announced a three-year supply agreement with a major US healthcare provider for its Rover Plus mobile radiology system.

The deal followed a successful evaluation and competitive tender by the healthcare provider, which operates more than 700 facilities nationwide.

It has added Rover Plus to its approved procurement list, allowing member hospitals to purchase the system without further evaluation or tendering, in what Power described as a major commercial milestone for the company.

Power said Micro-X had undertaken a strategic review of its operations to refocus on medical imaging with its technology and less on security and military applications.

“Medical imaging is their core expertise and that revolves around two subsets – one is their portable X-ray equipment the Rover Plus and to that end they’ve been successful with a major US tender,” Power said.

Secondly, through various grant funding including the Australian Stroke Alliance (ASA) and US Advanced Research Projects Agency for Health (ARPA-H) Micro-X is developing a portable head CT scanner and lightweight full body CT scanner.

Micro-X also has a multimillion-dollar program underway with the US Department of Homeland Security to develop an airport passenger self-screening checkpoint.

Separately, the company has struck a deal with Malaysian developer and manufacturer of specialised screening products, Billion Prima Sdn Bhd, to develop a baggage scanner.

As part of the agreement, Billion Prima is taking a $2.4 million equity stake in Micro-X – just under 4% of the company – and will pay up to $3.2m over the next 12 months for development of the scanner.

“It is a good example of the way they’re looking for partnerships and strategic opportunities to licence out the core technology for other applications and they will concentrate on the medical side of their operations,” Power said.

“And even in the medical side they’ll look to partner at appropriate points in time.”

Morgans was a joint lead manager to a $6.4m capital raise early this year that, along with contracts, grant funding and R&D tax incentive payments, Power said gives Micro-X a runway to deliver.

Morgans has a speculative buy rating on Micro-X and a 12-month target price of 17 cents.

Tetratherix (ASX:TTX)

Wound-management house Tetratherix made its ASX debut on June 30, breaking an IPO drought for the healthcare sector. Barrenjoey Markets and Morgans Financial were joint lead managers and underwriters to the Tetratherix IPO.

Tetratherix has developed a proprietary polymer platform enabling the targeted delivery of cells, drugs and biologics, to treat a range of conditions across tissue spacing, bone regenerative and tissue healing.

“It has been a successful IPO for the Morgans network and our clients,” Power said.

“They have initially targeted three verticals with their polymer platform being bone regeneration, what they call tissue spacing and tissue healing.

“Their basic philosophy is to partner and to use the partner to help them through clinical programs, regulatory pathway and with sales and marketing expertise.”

Power said Tetratherix had plenty of news flow, which was important for these type of companies.

He said near-term catalysts include progress on Tetratherix’s bone regeneration franchise which is targeting US Food and Drug Administration (FDA) clearance in H2 CY26 and an update on the recruitment in the trial for Cohort 2 using TetraDerm (tissue healing) involving surgical incisions in the face and neck.

Morgans has a speculative buy rating on Tetratherix and 12-month target price of $5.76.

Mach7 Technologies (ASX:M7T)

Often described as “like the baby brother” of Pro Medicus, Mach7 is working to improve the efficiency and workflow for radiologists, other clinical staff and healthcare organisations with its medical imaging software solutions.

Mach7’s enterprise imaging solution includes data management, diagnostic viewing, and workflow applications. Its data management platform features a vendor-neutral archive (VNA) and tools for fast storage, retrieval, and viewing of images across a healthcare network, with cloud connectivity.

Its eUnity diagnostic viewer lets users access images on any workstation.

Teri Thomas, head of formerly ASX-listed Volpara Health Technologies –  a leader in medical software for breast cancer screening –  took over as managing director and CEO on July 1.

Volpara was acquired by South Korean-based provider of AI-powered solutions for cancer diagnostics and therapeutics Lunit in May 2024 for $292 million.

“Terri has made some changes and her focus is on rejuvenating the growth path for the company with her success at Volpara targeting larger customers and getting them converted,” Power said.

“She was very successful at Volpara and I think although the Mach7 order book has been growing there’s an opportunity for it to really accelerate.

“Terry has a real growth mindset and that is what Mach7 needs so two months into her appointment there’s been a few management changes and at the next quarterly we’ll get an update as to where she’s at in moving the company forward faster.”

Morgans has a buy rating on Mach7 and 12-month target price of 81 cents.

The views, information, or opinions expressed in the interview in this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.

At Stockhead, we tell it like it is. While Micro-X is a Stockhead advertiser, the company did not sponsor this article.

Disclosure: The journalist and analyst held shares in Mach7 at the time of writing.  The analyst held shares in Tetratherix also at the time of writing.