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Pro Medicus (ASX:PME) share price shoots higher on “milestone” deal

share price higher

The Pro Medicus Limited (ASX: PME) share price has been among the best performers on the S&P/ASX 200 Index (ASX: XJO) on Thursday.

In morning trade, the healthcare imaging software provider’s shares are up 5.5% to $30.58.

Why is the Pro Medicus share price shooting higher?

Investors have been buying Pro Medicus shares today following the release of a sales update this morning.

According to the release, Pro Medicus has signed a seven-year deal with LMU Klinikum worth a total of A$10 million. LMU Klinikum is one of the largest university hospitals in Germany.

The deal will see its increasingly popular Visage 7 technology deployed throughout LMU Klinikum’s radiology and subspecialty imaging departments, replacing a number of systems from legacy vendors with a single centralised platform.

Visage will also be used in the hospital’s state of the art operating theatre suite for high definition video documentation and point-of-care ultrasound archival and viewing.

Management advised that the implementation is scheduled to commence in December.

“A very significant milestone.”

The Managing Director of Pro Medicus’ Visage Imaging business, Dr Malte Westerhoff, was very happy with the deal.

He commented: “We are very excited about this project. LMU Klinikum is a thought leader in making a digital strategy a core principle of their operations. We are confident that our technology and expertise can make a significant contribution to helping LMU Klinikum further enhance efficiency and achieve better patient outcomes.”

Given how multinational imaging equipment vendors have had a stranglehold on this part of the market for a long time, Mr Westerhoff sees this deal as a real milestone.

“Traditionally, large European teaching hospitals like LMU Klinikum have standardised on IT platforms from large, multinational imaging equipment (modality) vendors making this a difficult market to penetrate. So this is a very significant milestone for us in this highly competitive market,” he added.

Dr Kurt Kruber, CIO of LMU Klinikum, spoke positively about the deal.

He said: “We look forward to taking our partnership with Visage to the next level as we implement their technology across our radiology department. The Visage platform provides a highly scalable and reliable platform combined with sophisticated clinical features that will support us in both day-to-day patient care and advanced research.”

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Returns as of 6th October 2020

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended 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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