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Why the Pro Medicus (ASX:PME) share price is racing 7% higher today

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The Pro Medicus Limited (ASX: PME) share price has been a strong performer on Thursday.

In morning trade the leading health imaging company’s shares are up 7% to $34.00.

Why is the Pro Medicus share price racing higher?

Investors have been buying the company’s shares this morning after it announced another major new contract win.

According to the release, Pro Medicus has signed a seven-year contract with Salt Lake City based Intermountain Healthcare.

Intermountain is the largest health system in the State of Utah and also provides medical services in the states of Idaho and Nevada. This makes it the largest healthcare provider in the Intermountain West region.

The contract, which is based on a transactional licensing model and estimated to be worth $40 million over the seven years, will see the company’s Visage 7 Viewer and Visage 7 Open Archive products implemented across all of Intermountain’s radiology and subspecialty imaging departments.

The implementation will be fully deployed on Google Cloud Platform (GCP), leveraging Visage’s native, cloud-engineered enterprise imaging technology. Planning for the rollout is to begin in the third quarter of FY 2021, with data migration commencing immediately by Visage’s engineering team. The first sites will be scheduled to go-live shortly after.

A very important deal.

Pro Medicus’ CEO, Dr Sam Hupert, was very pleased with the contract win.

He commented: “This is a very important deal for us, not only because of its size and scope, it will provide us with a material footprint in Intermountain West, previously an untapped region for us.”

“It also validates our decision to engineer Visage 7 from the ground up to be natively cloud capable, with Intermountain deploying both the Visage 7 Viewer and Visage 7 Open Archive as part of our Visage in the Cloud offering, making this one of the largest cloud-based PACS implementations in the world.”

Dr Hupert notes that this is the fifth major contract win that the company has announced during the last six months.

He concluded: “This is our fifth major contract win in six months. We believe this validates our belief that we have unique, market leading technology which, coupled with our expanded product portfolio and native cloud capability, has significantly increased our total addressable market in our key jurisdictions of North America, Europe and Australia.”

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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. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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