High performers in the medtech industry are beginning to catch the eyes of investors as the sector begins to turn potential into real growth.

The ASX’s medtech companies are up 21 per cent as a group year-on-year, with a select few micro and small caps that would have delivered any investors holding the stock significant returns; some have graduated to become mid cap and large cap businesses.

And that is due to growing evidence that the health industry is taking Australian medtech innovation seriously, according to Morgans senior health analyst Scott Power.

  • Scroll down below for a table of the ASX’s medtech stocks and share price movement

This is borne out by the data — there has been a 16 per cent year-on-year growth in the total market cap of listed medtechs, to $18.4 billion.

Remove the outlying Australian medtech icon Cochlear (ASX:COH) — which has seen a 1pc dip in value in the past 12 months — and that figure rises to 57 per cent yearly market cap growth (to $7.3b), meaning the majority of the growth has come from smaller companies.

“Our healthcare team here is focusing in on SaaS as a theme and its application into the healthcare and medical spaces,” Power tells Stockhead.

“Companies are putting this technology to good use and what we are seeing as a result of that is more customers adopting software, and then those companies showing revenue and profit growth.”

He says medtech companies can broadly be divided into two categories; diagnostics and administration. The former comes up with devices aimed at diagnosing or helping clinicians diagnoses diseases and the latter makes software which help out hospitals and clinics on a range of administration tasks.

Avita Medical (ASX:AVH), which makes spray-on skin cell therapy, has been the biggest winner in the past year with a 621 per cent return for investors; shares were fetching 37.5c a pop on Monday. Winning US regulatory approval for its devices was the key to that growth.

Resonance Health (ASX:RHT) is next best with a 381 per cent return. The company made a pivot towards machine learning earlier this year and also received US approval for its Ferrismart device.

“That is reflective of a theme for a number of health companies, we’re seeing quite a bit of deep learning and artificial intelligence coming into the narrative,” Scott says.

“I don’t like using the word disruptive but these technologies are interesting and attracting attention for their ability to make things more efficient for the health industry.”

He points to Volpara Health Technologies (ASX:VHT) and Alcidion (ASX:ALC) as prime examples of companies that are beginning to turn promise into real, sustainable growth.

Volpara’s shares have risen 158 per cent in the past year and Alcidion’s 133 per cent. Volpara’s technology, which involves machine learning and artificial intelligence to improve breast cancer diagnostics, got a leg-up from the FDA back in March, while Alcidion has been making significant gains with its clinic support software in the UK.

Volpara told the market a month ago that it would exceed guidance on annual recurring revenue for the 2019 financial year, while Alcidion saw its revenue jump by 479 per cent at the half-year.

“Customers are becoming more aware and investors are becoming more aware and that has been thanks to regulatory tailwinds having an impact and many of these companies showing quarter-on-quarter growth,” Scott says.

ASX codeCompanyLast priceMarket cap1-yr change%
AVHAVITA MEDICAL LTD0.375 $ 661,876,032 621
RHTRESONANCE HEALTH LTD0.13 $ 52,812,196 381
GSSGENETIC SIGNATURES LTD1 $ 111,308,824 203
VHTVOLPARA HEALTH TECHNOLOGIES1.69 $ 308,357,280 158
ALCALCIDION GROUP LTD0.105 $ 73,316,072 133
PMEPRO MEDICUS LTD19.05 $ 2,036,064,640 133
PNVPOLYNOVO LTD1 $ 704,058,752 98
NANNANOSONICS LTD4.805 $ 1,460,816,128 86
RNORHINOMED LTD0.22 $ 31,934,988 83
JHLJAYEX HEALTHCARE LTD0.034 $ 5,698,843 70
CMPCOMPUMEDICS LTD0.55 $ 95,667,992 41
PIQPROTEOMICS INTERNATIONAL LAB0.28 $ 22,543,350 40
AZVAZURE HEALTHCARE LTD0.09 $ 20,944,154 38
MDRMEDADVISOR LTD0.057 $ 81,777,544 30
RAPRESAPP HEALTH LTD0.175 $ 121,297,840 25
CYCCYCLOPHARM LTD1.2 $ 83,125,640 14
1ST1ST GROUP LTD0.049 $ 12,811,228 9
M7TMACH7 TECHNOLOGIES LTD0.27 $ 42,220,680 8
COHCOCHLEAR LTD190.895 $ 11,023,721,472 -1
GMVG MEDICAL INNOVATION HOLDING0.27 $ 100,272,992 -8
UBIUNIVERSAL BIOSENSORS INC-CDI0.215 $ 38,156,808 -12
ELXELLEX MEDICAL LASERS LTD0.59 $ 85,442,656 -14
NUHNUHEARA LTD0.076 $ 76,612,400 -15
AMTALLEGRA ORTHOPAEDICS LTD0.1 $ 9,955,905 -17
MX1MICRO-X LTD0.295 $ 45,527,428 -17
NHLNOVITA HEALTHCARE LTD0.021 $ 8,986,103 -19
PCKPAINCHEK LTD0.057 $ 49,018,124 -21
MVPMEDICAL DEVELOPMENTS INTERNA5.46 $ 362,962,784 -23
OSPOSPREY MEDICAL INC-CDI0.12 $ 56,133,660 -25
OILOPTISCAN IMAGING LTD0.051 $ 22,066,618 -25
ALTANALYTICA LTD0.005 $ 16,685,062 -29
RSHRESPIRI LTD0.1 $ 52,062,428 -31
OVNOVENTUS MEDICAL LTD0.245 $ 25,955,106 -33
GTGGENETIC TECHNOLOGIES LTD0.0065 $ 15,864,695 -35
LBTLBT INNOVATIONS LTD0.084 $ 16,877,870 -38
SOMSOMNOMED LTD1.8 $ 113,047,504 -38
DVLDORSAVI LTD0.08 $ 15,913,309 -38
GLHGLOBAL HEALTH LTD0.135 $ 4,546,610 -40
OSLONCOSIL MEDICAL LTD0.086 $ 46,672,452 -43
LSHLIFESPOT HEALTH LTD0.065 $ 5,041,964 -46
IBXIMAGION BIOSYSTEMS LTD0.03 $ 9,682,285 -49
IPDIMPEDIMED LTD0.22 $ 100,641,288 -60
ADRADHERIUM LTD0.03 $ 5,228,218 -75
ONEONEVIEW HEALTHCARE PLC-CDI0.25 $ 16,530,107 -87
FTTFACTOR THERAPEUTICS LTD0.0045 $ 4,692,761 -88
NTINEUROTECH INTERNATIONAL LTD0.018 $ 2,579,134 -89
AXPAIRXPANDERS INC-CDI0.035 $ 19,546,094 -91
MEBMEDIBIO LTD0.013 $ 2,736,817 -92
HMDHERAMED LTD0.255 $ 22,300,000 28
HLAHEALTHIA LTD0.9 $ 55,470,000 -10
EMVEMVISION MEDICAL DEVICES LTD0.4 $ 23,030,000 60