Small caps | 10:27
Medical imaging is in demand again in the post-covid world and Mach7 Technologies seems an undervalued player
By Tim Borham
Observers of the medical imaging space – including your columnist – were delighted to point out the yawning gap between Mach7 Technologies’ ((M7T)) $126 million market valuation and the $5.5 billion dollars of “cousin” Pro Medicus, also listed on the ASX and listed in the United States ( (PME)).
In reality, there are key differences in their business models, but the companies share the common trait of being shaped through crucial acquisitions.
In an extraordinary deal, Pro Medicus acquired struggling California-based Face Imaging at the height of the global financial crisis, for $5 million. The research arm of Visage was later divested for $15 million and today, Visage products are the core of the Pro Medicus business.
In the case of Mach7, in June 2020 the company completed the $40.9 million purchase of Canada’s Client Outlook, despite the pandemic preventing Burlington, Vermont-based Mach7 management from crossing the border. to verify the company.
Mach7 chief Michael Lampron calls the purchase “transformational” because it has expanded the company’s repertoire from the “back-end” – archiving images and other data – to viewing pictures.
Previously, Mach7 competed in a sub-section of the enterprise (hospital) imaging market; it can now offer products covering archiving, visualization and image workflows.
Buying Client Outlook wasn’t quite the “Alan Bond” moment for Mach7 in the way Pro Medicus’ Face theft was, but it certainly bolstered Mach7’s revenue pipeline.
“We see this growth and this opportunity because we have expanded our products,” says Lampron.
At the service of ‘ologies’
Mach7 provides diagnostic and imaging tools to all “ologists”; radiologists, oncologists, cardiologists, pathologists, ophthalmologists, etc.
Mach7 provides Picture Archive Communication System, or PACS, the diagnostic tool used by clinicians. But it also provides vendor-independent archives, or VNAs, which allow imaging tools from any vendor to be integrated into the platform.
This is because the company takes images, videos, and documents and consolidates them into a single platform. The data can then be managed and accessed through phones, devices or web browsers.
The company has been riding the shift to digital records, which allow hospitals and clinics to aggregate an individual’s medical history for easier consumption by doctors (and hopefully not by hackers as well).
The company also strives to present data in a clinically meaningful way that also consolidates supply chains and reduces costs.
Mach7 was founded in 2007 by image workflow expert Ravi Krishnan, who has held positions at GE Healthcare and Agfa Healthcare (Mr. Krishnan remains the company’s Asia Pacific head).
Mach7 launched its first product in 2012. In March 2016, the company merged with ASX-listed diagnostics company 3D Medical – a reseller of Mach7’s products – under a sharing agreement.
But both sides of the merged business were losing money and a year later Mr Lampron was appointed chief operating officer to ‘professionalise’ the management team.
A former US Air Force medic, Mr Lampron took over from former GE Healthcare bigwig Mike Jackman in February 2019.
“My objective was to resize the company; we couldn’t keep spending money.
Mr. Lampron has also held positions at GE as well as IBM and the Imaging on Call teleradiology group.
Notably, Chairman David Chambers was previously CEO of Pro Medicus.
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