Australia's medtech industry is growing strongly, supported by an ageing population and increasing demands for healthcare from within Australia and across the globe, according to Jai Mirchandani, founder, CIO & portfolio manager at ELM Responsible Investments, who sees further upside in ASX-listed companies, 4DMedical and Pro Medicus, after enjoying a very strong year.

Australia is a notable player in the global medical technology sector, and locally listed healthcare companies are leveraging global growth in healthcare to deliver attractive returns to shareholders.

“The healthcare sector is benefitting from several key trends. The ageing population in Australia and other developed nations is one of the most important. The increasing prevalence of chronic diseases will also continue to drive up the demand for healthcare and imaging technology,” said Mirchandani.

“4DMedical offers leading-edge lung imaging technology. The company’s alliance with Philips and a recent $10 million investment from Pro Medicus will be important in expanding 4DMedical’s international reach,” he said.

“While its shares have gained strongly over the past year, we believe the company still represents a compelling investment opportunity. 4DMedical’s lung imaging software is more efficient and safer than traditional X-rays and nuclear medicine, and it could potentially reduce healthcare costs while improving patient outcomes,” he said.

Mirchandani also favours Pro Medicus, which holds a leading position in ELM’s portfolio. A leading global provider of radiology information systems (RIS) and advanced visualisation solutions, Pro Medicus’s shares have gained 90 per cent over the year to September 9.

4DMedical’s stock has surged 370 per cent, but both are still likely to gain in the months ahead, according to Mirchandandi.

“We look for opportunities in innovative companies that are driving positive change to benefit society, which is why we like health technology. We see a strong outlook for both companies. Pro Medicus’ strategic $10 million investment in 4DMedical includes distribution rights, allowing Pro Medicus to leverage its existing relationships with major hospital systems, including Mayo Clinic and Johns Hopkins, to commercialise 4DMedical's solutions.

“Additionally, 4DMedical has secured a distribution agreement with Philips, providing access to over 14,500 CT scanners across the United States. This partnership includes exclusive rights within US government markets, particularly the Veterans Affairs healthcare system, which serves approximately 4.5 million additional veterans following the PACT Act expansion,” he added.