• The ASX Health sector has fallen ~1.5% in its first trading week of 2023
  • Mach7  has surged after landing its largest ever customer contract
  • Proteomics gets US approval for PromarkerD test for diabetic kidney disease

Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 24 years, explains what the movers and shakers have been doing in health and gives his ASX Powerplays.

Thought you needed to take 10,000 steps per day for the health benefits of walking? Think again, with more steps per day associated with a progressively lower risk of cardiovascular disease (CVD) among older adults but well below the widely promoted 10,000.

Researchers found individuals walking between 6,000 and 9,000 steps daily reduced risk of cardiovascular disease, including heart attacks and strokes, by 40% to 50% compared to those who walked 2,000 steps.

A study in the journal Circulation is a companion to an earlier study from Vanderbilt University Medical Center in Nashville, which demonstrated walking 8,200 steps a day can lower the risk of a wide range of chronic health issues.

The latest study reports findings of a meta-analysis of eight prospective studies using health data from 20,152 individuals in the US and 42 other countries with the average age of participants being 63.2 years.

The study found each additional 1,000 steps taken daily, especially for people who currently walk less than 3,000 steps a day, marks a substantial reduction in cardiovascular risk.


To markets…

And ASX health stocks are walking rather sluggishly for their first week of trade for 2023.  As at 1.15pm (AEDT) the S&P/ASX 200 healthcare index (ASX:XHJ) is down 1.5% in trade for the first week, while the benchmark S&P/ASX 200 (ASX:XJO) is fairly flat up 0.87% for the same period.

Mach 7 lands its biggest deal in history

Medical imaging specialist Mach7 Tech (ASX:M7T)  is off to a good start for 2023, surging ~22% this week after landing its largest ever customer contract.

M7T signed up Nasdaq-listed Akumin Inc, an outpatient radiology service provider in the US, as a new customer to deploy its entire cloud-based enterprise imaging platform.

The total contract value is ~$16.7 million, which will be staged annually across the life of the contract with $7.5m of that expected to be recognised in FY23. Annual support fees will be weighted to the second half of the contract term.

M7T’s entire Enterprise Imaging Platform including its Vendor Neutral Archive (VNA), and eUnity Diagnostic Viewer and Workflow Applications and  support Akumin’s decision to consolidate multiple systems into one common enterprise solution.

“This deal, together with the recent sales order received from our new partner Nuvodia, increases our exposure to the fast-growing outpatient radiology market and demonstrates that our technology appeals to customers across the size spectrum,” M7T CEO Mike Lampron said in an announcement.

He said the deal is testament to the wide application of its product suite from small customers all the way to nationally integrated healthcare organisations like Akumin.

“We are starting to see a lot more enquiry about Mach 7 and it has been out of favour for 18 months but that particular contract has pricked a few ears up so we are giving it a big push across our network,” Power said.

He said this is is a great contract with a high quality client and continues the recent sales order momentum for M7T.

“We remain comfortable with our forecasts, and expect a larger weighting to the second half of FY23.”

M7T will report its 2Q23 result late January and Power said he expects the company to reconfirm guidance of operating cashflow break-even, sales orders greater than $36m  and revenue growth greater than 20%.”

Morgans has an add rating with a 12-month target price of $1.34 for M7T.

“The big brother to Mach 7 in that imaging space is ProMedicus (ASX:PME) which just keeps going from strength to strength.

“We are always looking for an opportunity to add that to portfolios closer to $50.”

PME last week announced another multi-million, multi-year (7-years) contract with the US not-for-profit integrated delivery network (IDN) Luminis Health, which serves communities across Maryland, from Washington, DC to Delaware.


The M7T &PME share price today:



Quarterly reporting season nearly here

Quarterly reporting season is due to kick off in mid-January with Power watching closely the likes of Volpara Health Technologies (ASX:VHT), which was in his basket of six stocks for 2023.

Another health-imaging company, VHT specialises in the early detection of breast cancer. Power said he expects a solid Q3 FY23 result from VHT, which is continuing to head towards a break-even position through existing cash reserves and winning new business.

The mobile mini X-ray company Micro X (ASX:MX1) is also due to deliver a quarterly result in mid January.

“We expect a positive report from both those companies,” Power said.


ScoPo’s Powerplay

Proteomics International Laboratories (ASX:PIQ)  is Power’s stock of the week after achieving a major milestone with US approval for its PromarkerD test for diabetic kidney disease.

The CPT PLA (Proprietary Laboratory Analyses) code has been issued by the American Medical Association, and was a key approval in getting reimbursement coverage of the PromarkerD test by both Medicare and private health insurers in America.

In the US ~32 million adults, or 11% of the population, are living with diabetes, costing patients US$130 billion annually.

Proteomics CEO Dr Richard Lipscombe said the approval was extremely significant in the commercialisation of the test in the US market.

“That’s a major step for them and have signed a letter of intent with Sonic Healthcare (ASX:SHL) to use the test in their US labs,” Power said.

“We are expecting that agreement to be executed before the end of the month so it is very positive.

“Morgans helped raise some money for Proteomics late last year so they’re well funded and we are confident this agreement with Sonic will get executed, which will be a positive step in getting their product into the market.”

Morgans has a speculative buy on PIQ with a 12-month target price of $1.77.

The PIQ share price today:


The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse, or otherwise assume responsibility for any financial product advice contained in this article.