Health Check: Pro Medicus banks the profits as customers go the ‘full stack'
Tetratherix pockets $3.3 million, while Rhythm girds for a raising
CEO oration inspires Starpharma share run
The $32 billion market cap ProMedicus (ASX:PME) has drawn the chapter on what co-founder and CEO Dr Sam Hupert dubs 'the most successful year in the company's history by any measure'.
The US-focused radiology imaging house today posted revenue of $213 million for the full year to June 30 2025, up 32%.
Net earnings surged 39%, to $115 million.
While the numbers were pretty much as expected, the shares surged up to 7% on the prospect of further revenue gains from newly-written contracts.
The company is also expanding into areas such as cardiology and pathology – the latter of which could be two-thirds the size of the radiology market.
"But it's early days."
Hupert describes a 'record year of new contract wins, contract renewals and sales of additional modules'.
Revenue rose in the three key jurisdictions of the US, Germany and Australia, but North America led the way with a 36% increase. The company derives about 90% of its revenue from the US.
During the year, Pro Medicus won $520 million of new contracts.
Yep, that's a record. These included a monster $330 million deal with Trinity Health, one of the biggest not-for-profit networks in the US.
The company also signed two key renewals, totalling $130 million.
Hupert says more customers are going the 'full stack', which means they are availing of the company's image viewing, archiving and workflow tools.
Only the beginning?
He adds that many of the recently signed contacts will come on stream 'in the next year and beyond', which means 98% of this revenue is yet to be recognised.
He cites forward contracted revenue for the next five years at $948 million, up from $624 million a year ago.
Despite the growth, Pro Medicus still accounts for only 10% of the US total addressable market.
The company still trades on an extravagant price-earnings multiple, which implies that this 10% will become a much bigger number in the near future.
'We don't have a fixed target in mind, our aim is to get as big a percentage market share as possible,' Hupert says.
'Importantly, we do not see any technical or capacity-related reason why we will not continue to increase our market share materially from here.'
Hupert says the company's recent $10 million loan facility to lung imager 4D Medical (ASX:4DX) related to the companies AI capabilities.
There's the prospect of adding one or morr 4D products to the Pro Medicus stable.
"But I wouldn't read more into it than that."
Broker RBC says while the result was broadly in line with consensus, the company pleased with its free cash flow generation and upbeat outlook on contracts.
RBC has a 'hold' rating on the stock with a 'price target' of $350.
Starpharma shares take a run
Starpharma (ASX:SPL) CEO Cheryl Maley's prezzo to Bioshares annual summit in Hobart last week appears to have been enough to spark a 50% share run.
The contents weren't new, but Maley did outline how management had tweaked the company's strategy over the last year.
Maley started in January 2024.
Otherwise, Starpharma's June quarterly report showed customer receipts of $2 million, 51% higher than the March quarter.
Net cash outflows were $2 million.
Starpharma's reason for being is its dendrimer enhanced product (DEP) platform, which has produced the commercialised bacterial vaginosis treatment Vivagel and the germ-busting nasal spray Viraleze.
Before you ask, dendrimers are nanoscale polymers aimed at improving drug efficacy and reducing side effects (such as bone marrow toxicity and hair loss).
The company has oncology programs that combine the dendrimer with three existing drugs. They are irinotecan (colorectal cancer), cabazitaxel (prostate cancer and others).
Management is attempting to outlicense these assets.
Maley says despite considerable interest 'the licensing process has taken longer than anticipated.'
She attributes this to factors including "the evolving oncology landscape shifting towards targeted treatment options and the current geo-political environment, which has impacted the biotechnology industry at large".
Starpharma ended the quarter with cash of $15.5 million – enough funding for close to two years – with an expected $3.5 million R&D tax rebate yet to come.
Starpharma shares today had a well-earned rest, falling around 10%.
Rhythm limbers up for raising
Rhythm Biosciences (ASX:RHY) shares are on trading halt pending a capital raising announcement, on or before next Monday.
It's not a bad time for the company to tap the market, given its shares have gained 75% over the last month.
Rhythm is developing Colostat, a blood-based cancer assay which could replace the commonly used 'poo' tests.
The company also owns Genetype, a genetic risk assessment testing platform combining clinical, family history and genetic data.
Rhythm bought this asset from the administrators of Genetic Technologies.
Tetratherix gets a grant
Of course, the best form of funding is the free variety and the recently listed Tetratherix (ASX:TTX) has come up trumps in this regard.
The wound-care house has been awarded $3.3 million of non-dilutive funding, under the federal Industry Growth Program grant.
Tetratherix is commercialising products based on its polymer biomaterials, which offer claimed benefits such as increased flexibility and bioresorbability.
The grant will partly fund a $7.4 million project to take its Tetramatrix platform global, including expanding its production facility near Sydney Airport.
The funding spans the current financial year and 2026-27.
Tetratherix shares have gained a sprightly 40% since listing on June 30, the only local life sciences IPOs year to date.
But if you think that's a drought, there been no US biotech IPO for six months.
The last one was diseases specialist Aardvark Therapeutics, which listed on the Nasdaq in mid-February.
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