The healthcare industry has reached a seminal point. Faced with ageing populations, soaring demand and intense political pressure to improve patient outcomes, governments have realised that the only way to cope is to embrace ‘revolutionary’ new technologies. Not just those which deliver incremental improvements, but real ‘step changes’ that generate far superior results from much less resource. Focusing for instance on prevention rather than cure, where there is typically more bang for the buck.
To us, this strategic shift is a ‘no-brainer’, and next generation medical imaging equipment powered by CZT fits the bill. Accelerating the diagnosis & treatment of some of the world’s most common, yet serious conditions - such as cancer, heart disease, dementia, diabetes & osteoporosis. Fine, but when will these machines become available in hospitals?
Well, hopefully pretty soon. This morning Kromek announced that it had been awarded a ‘ground-breaking’ $58.1m (minimum) 7 years contract to supply its patented CZT detectors to a leading medical imaging device manufacturer (and existing client) with 1st revenues expected to commence in FY20.
This watershed agreement is significant on numerous counts. Firstly, along with its unique D3S ‘dirty bomb detector’, KMK now has a 2nd monster ‘home-run’ to bolster its near-term pipeline.
Next, given this OEM has decided to invest heavily CZT, then today’s news removes any lingering doubt (if there was any) concerning the magnitude of the opportunity. In fact, this secular upgrade cycle is likely to drive KMK’s growth over not just months & years, but probably decades too.
Better still, the RNS could potentially set the stage for a mini ‘gold rush’ across the industry. In one fell swoop, shifting the technology goal-posts and positioning KMK as the front-runner to sell its patented CZT detectors to other medical imaging OEMs. Organisations with whom we suspect discussions are already underway.