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Highlights
- Pro Medicus has signed a renewal contract with Sutter Health for another seven years.
- A renewal contract is also inked with Wellspan Health for further five years.
- The share price of Pro Medicus has gained by over 650% in last 5 years.
Healthcare informatics company, Pro Medicus Limited (ASX:PME) made headlines on Tuesday (14 June 2022) after it announced that it has signed two contract renewals with a minimum of AU$47 million.
Despite this positive announcement, the shares of Pro Medicus were trading down on the ASX. The share price was quoted at AU$38.605, 6.706% lower at 12:30 PM AEST.
The shares have shed off more than 7% in last five trading days and more than 6% in one month. But if we look at the performance in last five years, Pro Medicus shares have gained almost 650%.
Meanwhile, today, Pro Medicus’ performance was aligned with the broader market, ASX200, which dropped by 313.70 points at around 12:30 PM. Moreover, the benchmark index, ASX200 Health care (XHJ) which was down by 4.48% to 38,333.
Details of the AU$47M renewal contracts
According to the ASX-announcement, Visage Imaging, Inc., a wholly owned subsidiary of Pro Medicus, has signed a renewal contract with Sutter Health for seven years. Sutter Health is a large IDN (integrated delivery network) based in California.
Another contract with Wellspan Health is renewed for five years. It is an integrated health system which is based in Pennsylvania.
Through ASX-announcement, Pro Medicus management informed that both contracts are transaction-based, with potential upside. In addition, the arrangements are negotiated at a higher fee per transaction than the original contracts.
On the development, the CEO of the company, Sam Hupert said:
