Pro Medicus Limited (ASX: PME) shares are starting the week positively.
In morning trade, the ASX 200 tech stock is up 1% to $180.95, which is within a whisker of a new record high.
This latest gain means that the health imaging technology company's shares have now climbed almost 120% since this time last year.
Why are Pro Medicus shares rising again?
Investors have been bidding the company's shares higher on Monday for a couple of reasons.
One is a strong night of trade on Wall Street's tech-focused Nasdaq index on Friday which is giving ASX 200 tech stocks a nice boost on Monday. For example, the S&P/ASX All Technology Index is currently up 0.8% in early trade.
In addition, investors are buying Pro Medicus' shares this morning after responding positively to the release of another very positive announcement.
According to the release, Pro Medicus' wholly owned U.S. subsidiary, Visage Imaging Inc, has signed a major contract renewal with St Louis based Mercy Health.
The release reveals that Mercy Health has committed to an eight-year term. The contract has a minimum value of $98 million over the period.
Management advised that the deal, which covers both Visage 7 Viewer and Visage 7 Open Archive, is transaction-based and has been negotiated at a higher per transaction cost. The term of the renewal has also been increased to eight years from seven years as per the original contract.
The ASX 200 stock notes that its Visage 7 suite of products are the foundation of an ultra-fast, clinically rich, and highly scalable platform that can seamlessly be implemented in both public and private cloud environments.
The complements its leading suite of RIS, PACS, Artificial Intelligence (AI) and e-health solutions, which it believes constitutes one of the most comprehensive end-to-end offerings in healthcare imaging. And judging by the contract wins that Pro Medicus keeps reporting, this certainly appears to be the case.
'Unparalleled value'
The ASX 200 tech stock's CEO, Dr Sam Hupert, was pleased with the agreement. He believes it is a testament to the quality of its offering. Dr Hupert said:
The industry norm for renewals is for short extensions to the original contract at the same or lower price. The fact that Mercy has renewed for a longer contract term and at an increased price shows confidence in our offering and reinforces our belief that the Visage solution delivers unparalleled value in terms of both financial and clinical ROI.
