Due to new technologies and favourable industry tailwinds, I think there are a number of small cap ASX healthcare shares which have the potential to grow materially over the next 10 years.
Three small cap healthcare shares to add to your watchlist right now are listed below. Here's why I think they are worth watching:
Alcidion Group Ltd (ASX: ALC)
The first small cap ASX healthcare share to watch is Alcidion. It is a health informatics company aiming to transform healthcare with smart, intuitive technology solutions. The company has a growing portfolio of software products and services that support interoperability, allow communication and task management, and deliver clinical decision support at the point of care to improve patient outcomes. At present its software is in 215 hospitals, 42 healthcare organisations, and on 30,000 beds. I expect this to increase strongly in the coming years and drive strong sales growth.
Medadvisor Ltd (ASX: MDR)
Another ASX healthcare share to watch is Medadvisor. It is a growing software systems developer with a focus on addressing gaps in personal medication adherence. The company provides software that connects to pharmacy dispensing systems to automatically retrieve medication records. It also comes with an intelligent training, information, and reminder system to ensure correct and reliable medication use. In addition to this, the company is rolling out a medicine delivery service and a telehealth solution. The latter looks set to benefit from the rapid adoption of telehealth technology following the pandemic.
Volpara Health Technologies Ltd (ASX: VHT)
Another small cap ASX healthcare share which I believe has significant potential is Volpara. Its software leverages artificial intelligence imaging algorithms to assist with the early detection of breast cancer. It has been growing its market share in North America at an exceptionally strong rate. This led to the company recently reporting a 172% increase in annual recurring revenue (ARR) to NZ$18 million. The good news is that this is still only scratching at the surface of an estimated US$750 million ARR opportunity in breast cancer screening.
