HealthTech Profitability Is Finally Being Rewarded

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Welcome to Unlocking Liquidity, the PrimaryMarkets podcast exploring the companies, trends and ideas shaping private markets.

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In this episode, we explore why profitability—and a credible pathway towards it—is becoming an important part of the HealthTech investment conversation.

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Promising science and innovative devices can attract attention. But building a sustainable business also requires clinical adoption, a clear paying customer and economics that work beyond the development stage.

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We examine how different healthcare businesses are approaching that journey. How companies operate at different stages, as they strive for profitability.

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For wholesale and sophisticated investors, the question is how clinical progress translates into lasting commercial value.

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Let’s take a closer look........

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Healthcare innovation has always offered a compelling investment proposition: solve a meaningful medical problem, improve patient outcomes and build a business around enduring demand. Translating that proposition into sustainable shareholder value, however, requires more than promising technology or a large addressable market.

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For wholesale and sophisticated investors, the critical question is how clinical value becomes commercial value. Who pays for the product? How readily will clinicians adopt it? What does it cost to deliver? And how much additional capital will be required before the business can support itself?

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Recent funding activity offers examples of investors backing businesses that combine growth with profitability. It also highlights the importance of distinguishing established earnings from a credible pathway towards them.

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Across HealthTech, medical devices and the broader life sciences sector, that distinction matters. A profitable healthcare platform, a device developer approaching commercialisation and a preclinical biotechnology company require different valuation frameworks. What connects them is the need to demonstrate that each stage of investment builds a stronger economic proposition.

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The market has not abandoned healthcare innovation. Rock Health reported that US digital health companies raised US$7.4 billion across 244 deals in the first half of 2026, compared with US$6.4 billion across 245 deals in the corresponding period of 2025. However, transactions of US$100 million or more accounted for 45% of the capital invested. Funding increased, while the number of transactions remained broadly unchanged.

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Those figures show a selective funding environment rather than a universal recovery. They do not, by themselves, demonstrate that profitable businesses command a consistent valuation premium. Nevertheless, individual transactions illustrate how commercial performance can support both growth funding and shareholder liquidity.

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In September 2026, US healthcare benefits platform Angle Health announced a US$600 million financing transaction at a headline US$2.7 billion valuation. The transaction comprised US$200 million in Series C funding and a US$400 million tender offer. Alongside the announcement, the company reported four consecutive quarters of profitability.

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The distinction between new capital and secondary liquidity is significant. Funding can support business expansion, while a tender offer can provide an exit opportunity for existing holders. This example suggests that profitability and growth can coexist in an investment proposition capable of attracting substantial capital. It does not mean that similar outcomes are available to every healthcare business.

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Healthcare presents a particular commercial challenge: the patient, the clinician and the organisation paying for treatment may be different parties.

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A technology might improve the patient experience but require a hospital to purchase equipment, train staff and change established procedures. A diagnostic tool might provide additional information without immediately changing a treatment decision. A monitoring service might identify problems earlier while creating extra work for the clinicians responsible for reviewing its results.

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The economic case therefore needs to be specific.

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If a device is intended to reduce procedure time, that benefit needs to be measured in practice. If a platform aims to reduce unnecessary referrals, the company needs evidence that clinicians use it and that referral patterns change. If a product claims to improve treatment adherence, investors need to understand whether patients continue using it beyond the initial trial period.

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These considerations connect clinical evidence with procurement decisions. They also explain why a narrowly defined product addressing an expensive, repeatable problem can offer a clearer commercial proposition than a broad platform with multiple unproven applications.

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A high gross margin is useful, but it is not the same as a profitable business.

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Medical device companies must fund development, manufacturing quality systems, regulatory work, distribution, training and ongoing support. Digital health businesses may carry substantial clinical labour, integration and customer acquisition costs. Biotechnology companies can face years of research expenditure before a product generates revenue.

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Investors therefore need to understand what sits beneath the headline numbers. Positive adjusted EBITDA may coexist with negative operating cash flow. A profitable product line may sit within a loss-making company. Strong revenue growth may require inventory purchases or customer acquisition spending that increase the need for external funding.

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The practical test is whether growth improves the company’s financial position. As sales increase, does each additional customer contribute enough to cover the costs of expansion? Can the business retain customers without repeatedly spending to replace them? Are reported earnings translating into cash?

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For earlier-stage companies, the corresponding question is whether the current funding round can deliver a meaningful reduction in clinical, regulatory or commercial uncertainty.

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BioAnalytics Holdings, featured on PrimaryMarkets, is developing a user-adjustable, connected oral device for obstructive sleep apnoea, with a focus on comfort, affordability and treatment compliance.

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The company reports that it has completed production tooling, developed functional electronics-enabled units and secured CE and TGA approvals. Its proposed commercial model combines injection-moulded manufacturing with replacement-device demand and software revenues. The listing also identifies clinical trials as a purpose of the current capital raising.

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For investors, this illustrates how product design and manufacturing strategy can influence potential economics. Low production costs and recurring revenue opportunities may support an attractive business model, but they must be tested against actual selling prices, distribution expenses, patient uptake and continued usage.

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The investment assessment therefore extends beyond the prevalence of sleep apnoea. It concerns the company’s ability to convert a defined clinical need into repeatable sales and sustainable margins.

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Biosignals Diagnostics illustrates a different model, combining cardiac monitoring devices, diagnostic services and a developing software platform.

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The company’s business model centres on three revenue pillars: diagnostic services, data acquisition devices and platform licensing. It reports TGA registration and CE marking for ecgme®, a national Chemist Warehouse distribution agreement and completed integration with Best Practice Software. The mapdx™ platform remains in development, with its software-as-a-medical-device regulatory pathway being planned.

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The commercial relevance lies in connecting technology with existing clinical activity. Integration can make a product easier to incorporate into daily practice, while services and licensing may create revenue beyond the initial device sale.

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However, distribution access is not equivalent to sales, and integration does not guarantee regular use. The measures that would strengthen the investment case include active clinical customers, monitoring volumes, repeat usage and the contribution earned after specialist review and service delivery costs.

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VeinTech is developing Felix, a handheld ultrasound platform designed to help clinicians find, assess and select veins for intravenous access.

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VeinTech has reported results from its first 20 patient feasibility cases, including patients with difficult intravenous access. Junior clinicians achieved 75% venepuncture success following 15–30 minutes of device training. These are early feasibility findings, rather than evidence of performance across large patient populations or routine commercial deployment.

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The potential economic proposition is straightforward to investigate: whether better information at the bedside can reduce unsuccessful attempts, staff time and wasted consumables sufficiently to justify the cost of adoption.

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Those benefits still require validation. Investors should distinguish the ability to identify a vein from successful cannulation, and both from demonstrated savings for a healthcare provider. Establishing that connection would help translate an encouraging clinical development programme into a stronger purchasing proposition.

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GRETALS Australia sits at an earlier development stage. Its MEMORISE™ neurodegeneration programme is based on natural-source (2S)-pinocembrin, supported by proprietary botanical supply and extraction capabilities.

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MEMORISE™ remains a development programme, with no product currently on the market. GRETALS is progressing preclinical research partnerships, oral formats and an injectable formulation intended as a potential licensable prescription asset.

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Current profitability is therefore not an appropriate measure of this programme’s progress. The relevant assessment concerns scientific evidence, intellectual property, regulatory pathways and the funding needed to reach subsequent milestones.

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Commercial discipline still applies. Investors need to consider which results could support a partnership or licensing discussion, how different development pathways affect expenditure, and whether available capital is sufficient to complete the next meaningful stage. A licensing strategy may change future funding requirements, but remains dependent on successful development and partner interest.

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These four companies illustrate why healthcare opportunities should not be assessed using one common earnings timetable. Their inclusion here is not a claim that they are currently profitable.

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For a device company, progress may involve manufacturing readiness, clinical validation and conversion of evaluations into paid orders. For a diagnostic platform, it may involve recurring usage and a service model that produces an adequate contribution after clinical costs. For a preclinical biotechnology programme, it may involve reproducible research results and a clearer development or licensing pathway.

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The common requirement is evidence that capital is moving the business forward.

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A useful assessment links each proposed milestone to its financial implications. Completing a study may reduce uncertainty, but does it enable market access, a commercial agreement or the next funding round? Securing a distributor may widen reach, but what investment is needed to support that channel? Expanding internationally may increase the addressable market while also increasing regulatory costs and management complexity.

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This approach makes it easier to assess progress without confusing activity with value creation.

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Profitability can provide a private company with greater flexibility. A business that generates cash may have more choice over when to raise capital, how quickly to expand and which commercial opportunities to pursue.

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For businesses still investing towards profitability, funding resilience remains central. The amount being raised should be considered alongside expenditure, milestone timing and the possibility of delays. Investors also need to account for future dilution if further funding is required.

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Valuation remains equally important. A promising business can be an unattractive investment if its price already assumes rapid adoption, strong margins and an uncomplicated regulatory pathway. Conversely, an earlier-stage company may warrant consideration where the valuation appropriately reflects uncertainty and the next milestones are clearly defined.

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Private share liquidity also remains separate from business performance. Better earnings or successful development can improve a company’s appeal, but neither guarantees a buyer for existing shares or an exit within a particular timeframe.

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HealthTech’s investment appeal rests on the ability to improve healthcare in ways that customers can adopt and businesses can sustain.

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Recent funding examples show that profitability can sit alongside innovation and growth in a compelling investment proposition. For emerging companies, the corresponding opportunity is to establish a credible route from clinical need to commercial adoption, with funding requirements and risks made clear.

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For wholesale and sophisticated investors, this creates a more demanding definition of progress. Scientific advances matter. Regulatory milestones matter. Partnerships and distribution agreements matter. Their investment significance depends on how they contribute to a business capable of generating durable value.

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As private markets continue to evolve, investors and companies are increasingly seeking greater access, transparency and liquidity. PrimaryMarkets is an Australian-based platform that helps facilitate capital raising and secondary trading opportunities in private companies, managed funds and other unlisted investments.

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Through its capital raising and trading solutions, PrimaryMarkets connects sophisticated and wholesale investors with a diverse range of private market opportunities across sectors including technology, healthcare, energy, resources, property and alternative assets. The platform also assists companies and fund managers to access growth capital while providing existing shareholders and unitholders with potential liquidity pathways.

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By combining technology with market expertise, PrimaryMarkets is helping to modernise private capital markets, making it easier for investors to discover opportunities and for companies to connect with capital. As the private market ecosystem continues to mature, platforms such as PrimaryMarkets are playing an increasingly important role in improving access, facilitating transactions and supporting the efficient flow of capital.

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And that brings us to the end of this episode of Unlocking Liquidity. Thanks for spending your time with us, we hope today’s conversation gave you a fresh perspective on private markets and how liquidity is evolving. If you enjoyed the episode, please follow or subscribe wherever you listen, and feel free to share it with someone who’d get value from it. For more insights, opportunities and episodes, visit PrimaryMarkets.com. Until next time, thanks for listening, and we’ll see you in the next conversation.