The Pro Medicus Limited (ASX: PME) share price is falling on Thursday.
In morning trade, the health imaging technology company’s shares are down over 1% to $40.78.
This appears to have been driven by broad weakness in the tech sector, which has offset some positive news.
Pro Medicus share price falls despite contract win
The Pro Medicus share price is falling today despite the announcement of another major contract win.
According to the release, Pro Medicus has signed a $28 million, seven-year contract with Allina Health.
Allina Health is a not-for-profit health care system based in Minneapolis, Minnesota. It has 28,000 employees and 6,000 associated and employed physicians and operates 11 hospitals and more than 90 clinics.
The release explains that the contract is based on a transactional licensing model and will see the company’s Visage 7 Enterprise Imaging Platform and Visage 7 Workflow module implemented throughout Allina Health. This will provide it with a unified diagnostic imaging platform across the network.
Pro Medicus will now commence with the planning of the rollout, with an initial go-live date targeted for the second half of the calendar year.
‘Strong momentum’
Pro Medicus’ CEO, Dr Sam Hupert, was pleased with the news and notes that its strong momentum is continuing to build in the integrated delivery network space. He said:
This is our fifth major contract in the North American integrated delivery network (IDN) space in 18 months, underpinning the strong momentum we continue to build in this important segment of the market.
IDN’s are growing because of the trend towards value-based medicine coupled with industry consolidation. Our Visage 7 platform is ideally suited to meet their needs with its unparalleled speed, scalability, and proven cloud capability.
The good news for shareholders is that this may not be the last contract win. Dr Hupert commented:
Our pipeline remains strong and spans a growing number of market segments, including academic institutions, the IDN space, independent radiology groups, and the for-profit sector. Our proven cloud-engineered technology provides us with a very significant strategic advantage with the last six of our major contracts being cloud-based — a trend we think will continue.
The post Pro Medicus share price falls despite major contract win appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pro Medicus Ltd. The Motley Fool Australia has positions in and has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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