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.
Image source: Getty Images
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.
