Health Check: With yet another customer win, Pro Medicus storms to 2024 finish line with a wet sail

A fresh $15 million deal takes radiology house Pro Medicus’s US contract wins in 2024 to at least $580 million.

Pro Medicus is 2024's biotech line honours winner. Pic via Getty Images

• Pro Medicus has announced a $15 million, five-year contract with Duke University Health System

• The deal takes the company’s 2024 customer wins to at least $580 million

• The company is making inroads into both the ‘sandstone’ academic and for-profit markets

 

As 2024 draws to a weary close radiology imaging house ProMedicus (ASX:PME) is still busy at the tiller, overnight announcing a $15 million, five-year contract with Duke University Health System (Duke), a North Carolina-based academic medical centre.

On our sums the compact takes the company’s announced deals this year to at least $580 million – albeit over multi-year periods – with a mix of new clients and contract extensions and expansions.

Most are in the US, where the company last year gleaned close to 90% of its revenue as its radiology tools gained favour with both for-profit providers and the ‘sandstone’ learning institutions.

The Duke University deal is typical of what we have seen this year.

A client since 2019, the revered establishment has both signed on for another five years and expanded usage from the company’s image viewing tool to archiving the pics (the Vision 7 Open Archive).

As with many of the other deals, institutions are moving to cloud-based storing and viewing. That’s something they should have done years ago, but the crusty medical world only slowly adopts new tech before vigorously embracing it.

“This deal confirms our belief that there is a material opportunity for us to sell Visage 7 Open Archive to our existing base of ‘viewer-only’ clients.” Pro Medicus chief Dr Sam Hupert said.

Deals, deals – and did we say deals?

The latest deal follows the December 23 announcement of a $30 million, seven-year contract with the Illinois-based Duly Health and Care, for all the company’s products.

The biggest win for the year was a monstrous $330 million, ten-year deal with Trinity Health, one of the biggest US not-for-profit providers.

“In a single stroke, Trinity Health has eclipsed our new contract win/extension assumptions for the next 18 months,” broker Wilsons said after the deal.

“Trinity Health is emblematic of the model customer we envision for Pro Medicus from this point: the upper echelon of large, non-for-profit health networks, whose complexity and scope necessitates large scale investment in IT infrastructure to support network-wide productivity and security.”

The company also had a big win at home, in October signing up an unnamed large radiology provider for a $32 million, five-year contract extension.

Is there more wind in the sails?

Putting all of this into context, Pro Medicus reported $161.5 million of revenue in the year to June 2024, up 29% with a net profit of $82.8 million (up 36%), Of the revenue, $154 million was recurring.

Pro Medicus shares have surged 165% this year, for a market cap of $27 billion.

Sceptics will continue to question whether this valuation is overly frothy, but the company continues to outmanoeuvre its larger incumbent competitors and we award it line honours for 2024.

Originally published as Health Check: With yet another customer win, Pro Medicus storms to 2024 finish line with a wet sail