How Sam Hupert turned Pro Medicus into an understated giant

In Visage, Pro Medicus didn’t just get a technology platform. It also got a research and development team based in Berlin, where the company’s chief technology officer remains to this day, and a foothold in the American market, where big hospital and healthcare groups are much easier to sell to than Australian equivalents. The US now accounts for more than 85 per cent of revenue.

Hupert says a few big tailwinds have helped drive Pro Medicus’ recent growth. One is a shift to remote work, which has been exacerbated by the pandemic; Pro Medicus’ technology allows radiologists and doctors to view medical images anywhere, which is vital in an industry where radiologists are in short supply, even as artificial intelligence arrives in the sector.

The increasing size of medical image files – “gigabytes is the new megabytes”, Hupert says – is another important growth driver. Pro Medicus has led the shift to cloud-based systems for hospitals, which can support much bigger data sets.

Remarkably, Hupert’s rivals haven’t really followed him into the cloud; Goldman Sachs analyst Chris Cooper says Visage “is the only solution currently available that can be fully cloud-deployed at this scale, and hence represents a tangible competitive advantage”.

While Pro Medicus trades as Visage in the US, Hupert says the company wears its Australian roots on its sleeve, as they provide a key competitive advantage. The ability to offer customers technical support under a “follow the sun” model across Melbourne, Berlin and San Diego is a big selling point.

“We’re so mission-critical, so that gives them a lot of comfort and the model has worked really, really well.”

Hupert and Hall both retain stakes of $2.2 billion in Pro Medicus. But if that paper wealth has changed Hupert, it’s hard to tell; one fund manager calls him “the nicest billionaire in Australia”.

“The business side of it has been very rewarding, but I think for us and particularly for me, because I’m a clinician by training, the things we often don’t see are on the clinical side – that we are actually moving the needle in terms of the diagnostic process, and that we allow radiologists and clinicians to do things they otherwise couldn’t do.”

Cooper concedes that Pro Medicus shares look expensive, with the stock trading on an eye-watering multiple of 115 times next year’s earnings. But he notes that the multiple comes with profit margins above 50 per cent, long-dated nature contracts and a strong balance sheet.