Medical or health imaging includes various technologies such as Magnetic Resonance Imaging (MRI), X-rays, CT scans, PET scans and ultrasounds. Moreover, any data that is collected about organs or tissues can also be covered under health imaging.
It is essential to identify the disease condition before progressing for the treatment, with health imaging being one of the detection methods. Owing to the growing adoption of digitalisation in the health care sector, diagnosis and treatment have become much easier for health care practitioners.
In the Australian health care sector, Medicare provides fund for diagnostic imaging, and in 2017-18, health care professionals performed more than 27 million diagnostic images which were funded by Medicare.
Let’s discuss Pro Medicus, which is into providing imaging solutions for the health care sector.
Pro Medicus Limited (ASX: PME)
Richmond headquartered, ASX listed health care company, Pro Medicus Limited (ASX: PME) is working with the aim of providing medical imaging products to health care groups, imaging centres and hospitals. Currently, the company operates in Australia, North America and Europe. The company’s wholly owned subsidiary, Visage Imaging includes Visage RIS, Visage RIS/PACS, Visage 7, Visage Ease ProTM and Visage EaseSM technologies. PME is a global provider of radiology information systems, picture archiving and communication systems, and advanced visualisation solutions. A significant growth area for Pro Medicus is digital technology adoption by radiology providers.
Visage RIS- It is the most comprehensive radiology information system (RIS), which holds open source, modern and standard-based technologies such as stateless URL connectivity, RESTful Web Services, powerful rules engine, integrated workflow engine, PostgreSQL database and CalDAV scheduling. This radiology information system is intelligent, fast, scalable and flexible. It uses an open source workflow engine, enabling workflow customisation for the explicit requirements for today and adaptation as per changes over time, without any major disruption in software.
Visage RIS/PACS- Visage RIS/PACS is a complete solution for all the imaging needs and represents the pinnacle of speed, intelligence, speed and scale. It is customised for the requirements of today while having the flexibility to adapt the future needs.
Visage 7- The Visage 7 enterprise imaging platform provides easy and immediate differentiation imaging to Imaging organisations that are seeking to leapfrog the status quo of commoditised legacy picture archiving and communication system (PACS).
Differentiation of Visage 7 Platform:
- Multi-use case, one viewer: diagnostic, clinical, advanced visualisation and portal-image enablement;
- The images provided by server-side are adaptively streamed by an intelligent thin-client in Visage 7;
- DICOM gets processed at the Visage 7 server;
- Visage 7 supports mobile access by Visage Ease for iOS devices.
Visage Ease ProTM- This iOS mobile application is FDA approved and helps users with the interpretation of all the diagnostic imaging studies, which do not include mammography. There are some common principles for the use of mobile applications, according to which the devices should only be utilised for diagnosis in the circumstances where the diagnostic workstations are not available. This application delivers secure, fast access to even the largest multi-GB sized studies.
- Easy and fast access mobile application;
- Provides medical imaging results’ access stored on a Visage 7 server (from any iOS device such as (iPad, iPhone, iTouch));
- Visage Ease is powered by ultrafast server-side processing, thereby delivering secure and fast access to imaging results via mobile devices.
2019 AGM Presentation
Recently, Pro Medicus updated the market with AGM presentation for 2019, in which Managing Director and CEO of the company, Dr Sam Aaron Hupert gave an overview about the company and its performance during the fiscal year ended 30 June 2019. He also mentioned about the new AI platform, Visage AI Accelerator.
New Product Launch- The company continued to provide innovative products for maintaining market leadership. In the financial year 2019, the company launched two products-
- VISAGE 7 Open Archive- This product has the same highly scalable enterprise imaging platform used in VISAGE It is interoperable and suitable for use in complex environments. VISAGE 7 Open Archive is well placed for the North American archive market.
- Enterprise Imaging- Enterprise Imaging is a single viewer for all the images in the medical record and ideally suited for the VISAGE 7 technology. The growth opportunity for the company’s new product Enterprise imaging is within the existing contracts.
Visage 7 AI accelerator- It is a unique end to end solution, which supports both research and production environments on an individual platform. This AI Accelerator is based on the Visage 7 technology and enables Visage users to fast tract AI as part of their imaging strategy.
During the financial year 2019, the company announced several new contracts in addition to contract extension/renewal.
- Contract with Partners Healthcare in November 2018 worth $27 million for seven years, representing the largest contract in the history of the company.
- Another key contract with Duke Health in April 2019 worth $14 million. Duke Health is the largest health system in North Carolina.
- Contract with The Oho State University for $9 million, which would be implemented in the third quarter of the fiscal year 2020.
- The company mentioned that all the contracts entered in the financial year 2019 would contribute to its future revenue.
- In Germany, Pro Medicus won a contract extension with Government Hospital and the renewal of the US Department of Veteran Affairs contract.
- The expansion of PME’s relationships with I-Med Radiology Network and Healius are progressively contributing towards revenue.
PME’s management team is significantly working on various innovative opportunities, and the company’s pipeline continues to grow. Pro Medicus remains in a prominent position to continue to capitalise on increasing local and worldwide opportunities.
- The company generated revenue of $50.11 million in the fiscal year 2019, which is up 47.9% as compared to the previous corresponding period (pcp).
- The underlying after-tax profit was $22.74 million, which is up 83.1% as compared to the last financial year.
- The company’s NPAT for the fiscal year 2019 increased by 91.9% to $19.13 million.
- EBIT Margins increased to 51.6%.
- The company had a strong balance sheet in FY2019 with no debt.
- Cash reserves for FY2019 increased by 28.0% to $32.32 million.
Let’s have a look at PME’s stock performance on ASX. On 20 November 2019, the company’s stock closed the day’s trade at $26.250, up by 4.332% from its previous close. The company has a market capitalisation of $2.62 billion with approx. 103.98 million outstanding shares, P/E ratio of 136.000x and annual dividend yield of 0.32%. The company delivered a good return of 121.25% on a year to date basis, while in the last six months, the stock increased by 20.33%.
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