The Pro Medicus Limited (ASX: PME) share price was an impressive performer in January.
It was among the best performers on the S&P/ASX 200 Index (ASX: XJO) with a 25.4% monthly gain.
This means the Pro Medicus share price is now up a massive 71% over the last 12 months.
Why did the Pro Medicus share price rocket higher in January?
The catalyst for the strong performance by the Pro Medicus share price in January was the announcement of another major contract win.
This was the sixth such an announcement in the space of eight months and follows previously announced deals with Ludwig-Maximilians University, MedStar Health, Northwestern Memorial Healthcare, and NYU Langone Health. It was also the fifth win in just six months.
The latest contract is with Salt Lake City-based Intermountain Healthcare and is the biggest of them all. Management revealed that it is worth a sizeable $40 million over a seven-year period.
According to the release, Intermountain Healthcare is the largest health system in the State of Utah. It also provides medical services in the states of Idaho and Nevada.
The contract, which is based on a transactional licensing model, will see the company’s Visage 7 Viewer and Visage 7 Open Archive products implemented across all of Intermountain’s radiology and subspecialty imaging departments.
The implementation will be fully deployed on Google Cloud Platform (GCP), leveraging Visage’s native, cloud-engineered enterprise imaging technology.
Pro Medicus’ CEO, Dr Sam Hupert, commented: “This is a very important deal for us, not only because of its size and scope, it will provide us with a material footprint in Intermountain West, previously an untapped region for us.”
“Prestigious deals”
In a separate Q&A release, Dr Hupert spoke in more detail about its recent contract wins.
Commenting on what the deal says about its technology, Dr Hupert said: “Firstly, these were arguably five of the largest, most prestigious deals in the market not to mention that these sorts of deals don’t come around often, so they were incredibly competitive. The fact that we won five out of five we feel validates our belief that we have a unique, highly differentiated offering.”
“Secondly, I think people are hearing about the ROI we deliver, both financially and clinically. This combined with our ability to rapidly and seamlessly implement is creating a strong network effect that has been instrumental in our spate of recent wins,” he added.
Looking ahead, the Chief Executive remains positive on its outlook thanks to its strong pipeline of opportunities.
He explained: “In terms of the pipeline, there have been a number of new opportunities, particularly over the past 6-8 months that supplement those already in the pipeline that are progressing through the cycle. So, whilst we have been very successful in converting end-stage opportunities such as Intermountain and the other deals we have announced over the past 6 months, our pipeline remains strong with a range of opportunities across various stages of the cycle and across multiple segments of the market.”
This may bode well for the Pro Medicus share price over the next 12 months.
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia has recommended Pro Medicus Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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