The Pro Medicus Limited (ASX: PME) share price has started the week in fine form.
At the time of writing the health imaging software company's shares are up 2% to $23.95.
Why is the Pro Medicus share price on the rise?
Investors have been buying Pro Medicus' shares on Monday after the release of a positive announcement.
According to the release, Pro Medicus' wholly owned U.S. subsidiary, Visage Imaging, has signed a five-year, multi-million dollar contract with Palo Alto based Nines.
Nines aims to help radiologists give customers exceptional service, quality, and access. It unites radiologists and engineers in-house to build modern quality tools for exceptional patient care.
It was co-founded by CEO David Stavens PhD, a highly respected Silicon Valley inventor and entrepreneur, and CMO Alexander Kagen, the Site Chair of Radiology at Mount Sinai's West and St. Luke's Hospitals in New York City.
Today's agreement will see the creation of an offering, based on Visage 7 technology, hosted on the Google Cloud Platform and will provide Nines with an immensely scalable and highly optimised platform.
Pro Medicus CEO, Dr Sam Hupert, was very pleased with the agreement.
He said: "This is an extremely exciting opportunity for us. The team behind Nines are incredibly well known and respected in machine learning, AI, and radiology circles. Partnering with them will allow us to support their efforts to develop future products with our highly optimised Visage 7 cloud-based solution for on-demand reads."
What now?
The five-year contract is based on committed exam volumes that step up year-on-year aligning with projected growth of the Nines offering in the market.
This will result in base revenue to Pro Medicus in excess of A$6 million over the life of the contract with the potential for significant upside.
Implementation will begin in the next few weeks. After which, it is expected to go live in the second quarter of the 2020 calendar year.
Nines' David Stavens, commented: "Leading healthcare institutions expect high-quality radiology reports 24/7. Visage and Nines are collaborating on a modern cloud-based service with an eye toward exceeding those expectations."
"Radiologists face increasingly complex workloads. At Nines we aim to provide the best technology to help radiologists diagnose efficiently while prioritizing their time for the patients who need it most. Nines selected Visage for its tech-focused leadership and we're excited to offer Visage 7 as part of our scalable solution," he concluded.
