The Volpara Health Technologies Ltd (ASX: VHT) share price looks set to end the week on a very positive note.
In early afternoon trade the healthcare technology company's shares are up 7.5% to $1.42.
Why is the Volpara share price surging higher?
Investors have been buying Volpara's shares this afternoon after it announced the signing of a major new contract.
According to the release, the company's recently acquired CRA Health business has signed Volpara's highest value contract to date.
CRA Health is a breast cancer risk assessment company that was spun out from Massachusetts General Hospital, a Harvard Medical School teaching hospital. Volpara announced its acquisition last month for US$18 million upfront and an additional US$4 million payable upon it meeting recurring revenue and staff retention targets over the next 18 months.
What was the contract?
The release explains that CRA Health has signed a contract that covers the provision of breast cancer risk scores to a large Indiana-based organisation.
The unnamed company has sites across more than 20 states and runs a major Electronic Health Record system. Management notes that the latter makes the deployment and implementation very cost effective.
The contract is worth over US$400,000 per year in Annual Recurring Revenue (ARR).
Volpara's CEO, Dr Ralph Highnam, commented: "We are very pleased to announce that CRA Health has signed up a major US health system with significant ARR associated with it. Whilst we would not normally announce individual deals, this is the Volpara Group's highest value contract signed to date."
"Not only does it enable us to help many more women across the United States benefit from early cancer detection, but it also sets us up for future sales of additional products to this organization. Further, the contract is validation of the decision to purchase CRA Health and validation that the world is rapidly moving towards personalised breast care, which includes analysis of risk and genetics," he concluded.
