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Why the Volpara share price is charging 6% higher today

The Volpara Health Technologies Ltd (ASX: VHT) share price has started the week on a positive note.

In late morning trade the healthcare technology company’s shares are up 6% to $1.73.

Why is the Volpara share price charging higher today?

This morning the company revealed that the American Society of Breast Surgeons (ASBrS) has released its official position statement on screening mammography.

According to the announcement, the ASBrS has made favourable recommendations regarding how to assess breast cancer risk with breast density as an input and how to act upon such an assessment.

Dr Ralph Highnam, CEO of Volpara, said: “We have seen a large increase in activity and enquiries in the breast cancer risk space recently, and it is good to see that the ASBrS have put forward a position statement that very clearly outlines its recommended approach to breast cancer screening—an approach that, significantly, begins to personalise the risk-assessment experience for each woman based on her individual risk.”

He added: “It is also encouraging to see how important density is in that assessment and the vital role that Volpara can play in helping women receive the right care at the right age.”

In addition to this, the company advised that a new study has validated Volpara Density use in the Tyrer-Cuzick breast cancer risk model.

Dr Highnam appeared pleased with this news and believes it could help boost sales.

He said: “VolparaDensity has been in Tyrer-Cuzick for some time now, and the publication of this substantial validation paper is a key link that will assist in further accelerating uptake. Like UCSF and the Mayo Clinic, UVA has now shown that VolparaDensity is about equal to world experts in judging breast density. But as the authors note, VolparaDensity does not suffer from subjectivity, and there are practical advantages to an automated system. This is a real milestone in our company’s history.”

Should you invest?

I think that Volpara is a quality company and these developments demonstrate that it could have a very big future ahead of it. However, after a stellar share price gain over the last 12 months, I think its valuation is looking a little stretched now.

In light of this, I would sit tight and wait to see if a better entry point emerges in the coming months.

Until then, I think the likes of Nanosonics Ltd (ASX: NAN) and Pro Medicus Limited (ASX: PME) could be worth a closer look.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia has recommended Nanosonics Limited and Pro Medicus Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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