One of my favourite shares in the healthcare sector right now would have to be Pro Medicus Limited (ASX: PME).
For those that are not overly familiar with it, Pro Medicus provides a full range of radiology IT software and services to hospitals, imaging centres, and health care groups worldwide.
The key attraction to the company for me is its Visage 7 technology which delivers fast, multi-dimensional images streamed via an intelligent thin-client viewer.
This technology allows radiologists and referring physicians to have a customised protocol-driven workflow to natively view multi-dimensional imagery and a patient's complete imaging history.
As you might expect, the technology has won a lot of admirers over the last couple of years. One key admirer was US-based Yale New Haven Health, which last year signed a seven-year contract that will see Visage 7 implemented across all of Yale's radiology departments and integrated to their electronic health records for imaging results.
But it isn't just Visage 7 that is attracting attention, the company's Visage RIS technology is equally impressive.
Visage RIS is a comprehensive, enterprise-class and state-of-the-art radiology information system which allows patient registration, billing, scheduling, financial reports, and PACS integration.
This morning the company announced that I-MED Radiology Network has signed a five-year agreement that will see it standardise Visage RIS across all its practices.
I-MED is Australia's largest diagnostic imaging provider and performs over 4.6 million patient procedures annually across New South Wales, ACT, Victoria, Tasmania, Northern Territory, and Queensland.
According to the release, I-MED will begin by transitioning its Regional Imaging and Queensland practices to Visage RIS over the next 12 months, which is expected to generate revenue of $1.4 million per annum once fully implemented. After which, I-MED will extend Visage RIS to its Victorian, NSW, and ACT operations.
Dr Sam Hupert, CEO of Pro Medicus, believes that this deal cements its position as a leader in the Australian RIS market and I would have to agree with him.
Should you invest?
At present Pro Medicus' shares are changing hands at approximately 87x trailing earnings.
This is clearly a significant premium to the market average and means an investment should be considered high risk.
However, given its leadership position in a market that is expected to grow significantly in the future, I think it is worth considering a small position in the company alongside other healthcare stars such as CSL Limited (ASX: CSL) and ResMed Inc. (ASX: RMD).
