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Why PolyNovo and these ASX healthcare shares are surging higher

The S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is storming higher on Tuesday. The benchmark index is currently up 2.5% to 5,419.9 points.

Three healthcare shares that are vastly outperforming the benchmark index are listed below. Here’s why they are on fire today:

Althea Group Holdings Ltd (ASX: AGH)

The Althea share price has rocketed 19% higher to 34.5 cents. This morning the medicinal cannabis company provided the market with an update on its Canada operations. According to the release, its wholly owned subsidiary, Peak Processing Solutions, has formally submitted its evidence package to Health Canada. This is the final step in the application process for its Standard Processing Licence. If granted, management believes the company is in position to be a leading supplier to the rapidly growing Cannabis 2.0 market in Canada. Based on internal forecasting and modelling, it has projected to achieve revenue of $25 million within 18 months of being granted its licence from Health Canada.

PolyNovo Ltd (ASX: PNV)

The PolyNovo share price zoomed as much as 31% higher to $2.20 in early trade. Investors have been buying the dermal regeneration medical device company’s shares today following the release of a trading update. That update revealed that the coronavirus outbreak has not slowed its sales growth. In fact, PolyNovo had a record month with U.S. sales growing 166% on the prior corresponding period. Management also notes that its sales grew stronger as the month went on. Though, it has warned that its sales are lumpy and predicting futures sales is difficult.

Volpara Health Technologies Ltd (ASX: VHT)

The Volpara share price has jumped 15% to $1.34 after the release of a business update. That update shows that the medical technology company’s annual recurring revenue (ARR) is already ahead of its upgraded FY 2020 target. By the end of March its ARR had reached NZ$18 million, which is above its target of NZ$17.8 million. This target represents an increase of 172% year on year. Another positive is that the company now estimates that it has at least one software product being used in the screening of ~27.1% of US women for breast cancer. This is another metric which is meeting its target for FY 2020. The company ended the March quarter with over NZ$31 million in the bank and no debt.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. 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.