The Pro Medicus Limited (ASX: PME) share price is a poor performer so far on Thursday despite the company providing a positive update. In early morning trade, the health imaging company’s shares are fetching $40.05, down 1.26%.
What was announced?
Investors have been selling Pro Medicus shares regardless of the company’s announced contract win.
According to its release, Pro Medicus’ wholly-owned United Stated subsidiary, Visage Imaging Inc., has signed a deal with The University of Vermont Health Network Inc (UVM).
Under the agreement, Pro Medicus will deploy its Visage 7 Enterprise Imaging Platform across 6 hospitals operated by UVM. It is expected that, once the system is fully functional, a unified diagnostic imaging platform will run across the network. This replaces the existing multiple legacy PACS platforms that are currently being used.
The contract is valid for a period of 8 years and is estimated to generate $14 million in revenue for Pro Medicus.
Rollout of the system is scheduled to commence immediately, with go-live dates targeted for the second half of 2021. The Visage 7 platform will be deployed in the public cloud.
The company noted that the latest deal further expands its United States academic institution footprint. Pro Medicus believes that its transactional licensing model could also lead to further potential sales in the future.
Pro Medicus CEO Dr Sam Hupert commented:
We continue to build momentum in the market with this, our seventh contract win in a row, adding to other recent major announcements.
UVM Health Network is the fourth of these to opt for a cloud-based solution, a trend we see increasing rapidly amongst healthcare systems in North America.
Our pipeline continues to grow. Visage 7 with its proven cloud-native capability provides us with a significant strategic advantage that enables us to address these opportunities across a growing segment of the market both in North America and other regions.
Pro Medicus share price snapshot
Over the last 12 months, the Pro Medicus share price has stormed around 55% higher, with year to date performance delivering gains of around 17%. The company’s shares reached an all-time high of $48.69 last month.
Based on valuation grounds, Pro Medicus commands a market capitalisation of around $4.2 billion, with approximately 104 million shares outstanding.