The Australian share market is home to a number of world class healthcare companies such as Ramsay Health Care Limited (ASX: RHC) and Cochlear Limited (ASX: COH).
While I believe both companies still have a lot of growth left in them, the law of large numbers would indicate that the impressive growth rates they have achieved over the last decade or two will be hard to replicate in the future.
So, if you're looking for outsized returns in the healthcare sector, you might want to look at a few up and coming healthcare companies that could be stars of the future.
Three small cap healthcare shares that I think are worth watching closely are listed below:
Mach7 Technologies Ltd (ASX: M7T)
The first small cap healthcare share to look at is Mach7. It is a medical imaging data management solutions provider which uses software to create a clear and complete view of the patient. This helps inform diagnosis, reduce care delivery delays and costs, and improve patient outcomes. The company has also just expanded its offering with the acquisition of Client Outlook. It is a leading provider of an enterprise image viewing technology and increases Mach7's total addressable market from US$0.75 billion to US$2.75 billion. This is significantly more than the revenue of $9.1 million it recorded during the first half.
Medadvisor Ltd (ASX: MDR)
A second small cap healthcare share to watch is this healthcare technology company. Medadvisor has a focus on personal medication adherence and offers an app that connects to pharmacy dispensing systems. It has been designed to ensure correct and reliable medication use. In Australia it has connected over one million users through nearly 60% of Australian pharmacies and a network of thousands of GPs. In addition to this, the company is operating in the United States, Asia, and UK markets.
Volpara Health Technologies Ltd (ASX: VHT)
A final small cap ASX healthcare share to watch is Volpara Health Technologies. It is a growing technology company that offers cost-effective, mission-critical software that help radiologists deliver the highest-quality breast imaging services. Volpara's software also uses artificial intelligence imaging algorithms to assist with the early detection of breast cancer. Management estimates that it currently has a US$750 million annual recurring revenue (ARR) opportunity in breast cancer screening. This compares to the ARR of NZ$18 million it recorded in FY 2020.
