Why this little ASX healthtech share is charging 7% to a 52-week high on Friday

This health technology share is making its shareholders smile on Friday

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The Mach7 Technologies Ltd (ASX: M7T) share price is having a strong finish to the week.

In morning trade, the ASX health technology share is up 7% to a 52-week high of 97.5 cents.

Why is this ASX share shooting higher?

Investors have been scrambling to buy the company's shares this morning after it announced a major contract win.

According to the release, the medical imaging software solutions company has signed a new licence agreement with Diagnostic Imaging Associates worth a total of $3.7 million.

As part of the contract, Mach7 will provide its eUnity Diagnostic Viewer solution to Diagnostic Imaging Associates for general diagnostic interpretation and mammography diagnostic reading.

It will be based on a subscription licensing model, with the contract expanding the use of eUnity beyond an original 75,000 annual study agreement for mammography remote reading to a licence covering the full spectrum of eUnity's diagnostic tools for 1.2 million studies annually. This represents a 16-fold volume increase.

The agreement is for five years, with management estimating that it will boost its annual recurring revenue (ARR) by $0.64 million.

The ASX share's CEO and managing director, Mike Lampron, said:

Market research continues to evidence a dynamic shift in where and how patients want to receive healthcare. This is amplified by the tightening of reimbursement rules by North American payers for non-emergency imaging due to the additional price tag placed on imaging by acute care providers. DIA represents a large, growing practice that is benefiting from the shift in diagnostic imaging from acute care to ambulatory settings and we are delighted to now provide its 70-strong radiologist practice with the full functionality of our zero-footprint eUnity Diagnostic Viewer.

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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 Mach7 Technologies. The Motley Fool Australia has recommended Mach7 Technologies. 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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