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Shares Melbourne-based medical imaging company Pro Medicus (ASX: PME) shot past $300 each for the first time today, taking the group's market capitalisation to a peak of $33 billion after announcing two new contracts in the US totalling $190 million.
Pro Medicus shares, which have increased more than tenfold in the past five years, surged to a high of $316.47 – up almost 11 per cent – on the latest contracts which are among a slew of deals that have driven the company’s share price higher since 2020.
Pro Medicus today announced a $170 million contract with Colorado-based UCHealth and a $20 million contract with Louisiana-based Franciscan Missionaries of Our Lady Health System – both of which were secured by the group’s US subsidiary Visage Imaging, Inc.
The $170 million deal with UCHealth is over 10 years and covers a network of 14 hospitals as well as affiliate hospitals, clinic locations and health care providers in Colorado, Wyoming and western Nebraska.
The Franciscan Missionaries deal is over five years and represents the renewal of an existing contract for the group’s Visage 7 Viewer at a higher rate as well as a new contract for the Visage 7 Open Archive.
The UCHealth contract is the largest struck by Pro Medicus this year and comes on the heels of a $330 million 10-year contract signed in November with Trinity Health, one of the largest not-for-profit health care systems in the US.
Despite the size of the Trinity Health contract, it managed to boost the group’s footprint in the US market from 7 per cent to more than 8 per cent.
Pro Medicus is focusing heavily on the US which accounts for about 60c of every dollar spent on healthcare globally.
Founded in 1983, Pro Medicus provides a range of radiology IT software and services to hospitals, imaging centres and health care groups globally.
But it wasn’t until 2009 when the company acquired Visage Imaging, a company that specialises in digital imaging and 3D visualisation technology, that led to its transformation as a major provider of cutting-edge imaging services to health providers worldwide.
Under the latest deal, UCHealth will use Pro Medicus’ cloud-based Visage 7 Enterprise Imaging Platform to provide the health provider with a unified enterprise imaging platform.
“UCHealth is a very highly regarded health system providing outstanding care to patients in the Rocky Mountain region of the US,” says Dr Sam Hupert, the CEO and co-founder of Pro Medicus.
“They join an ever-growing list of Visage 7 clients to opt for our fully cloud-based solution, which, as a result of our CloudPACS strategy, is becoming the standard in the North American healthcare IT market.
“Notably, they have also opted for our cardiology offering which will provide UCHealth with a truly unified enterprise imaging solution, a trend we see continuing as more and more healthcare enterprises look to consolidate their disparate imaging systems.”
The contracts announced today follow several wins for Pro Medicus this year, including a $20 million contract in May with University of Iowa Health Care and a $40 million deal with US radiology services group LucidHealth.
“Our pipeline remains strong and spans all market segments,” says Hupert.
“There is growing interest in our ‘full stack’ solution comprising all three core Visage products, viewer, workflow, and archive with the added option of ‘other ologies’ such as cardiology.”
The company is planning an immediate rollout of its services for UCHealth and expects to go live in the second quarter of 2026.
Contract wins have been a key driver of share price growth for the company in recent years, with renewals adding to the momentum and indicating increased adoption of the group’s imaging solutions by the medical sector.
Pro Medicus is also a high-margin business which is reflected in FY24 revenue of $161.5m, which was up 29.3 per cent from a year earlier, leading to a 35 per cent lift in underlying profit before tax to $116.5 million and a 36.5 per cent lift in net profit after tax to $82.8 million.
Revenue accelerated again in the first half of FY25, rising 31 per cent to $97.2 million, which translated to underlying profit before tax of $69.9 million, up 42.9 per cent from a year earlier.
In December last year, Hupert and his fellow co-founder Anthony Hall cashed in on the solid growth in the group’s share price by selling one million shares each during the trading window provided for directors.
The sale, at $256.73 per share, was triggered after approaches from “high-quality institutional investors” who were looking to gain a foothold in the company.
The price, which netted $256.7 million for each of the founders, was the closing market price of Pro Medicus shares on 3 December 2024.
The sale represented just less than 4 per cent of the respective shareholdings of the founders who at the time declared that they did not plan to sell any more shares in the company “in the foreseeable future”.
Between them, Hupert and Hall still own 46 per cent of Pro Medicus which at the current share price is valued at $14.5 billion.
Shares in Pro Medicus were trading at $302.93, up $17.73, at 12.17pm (AEST).
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