Pro Medicus is arguably the top ASX 200 healthcare stock. It is a leading provider of radiology software, having gone strength to strength with and selling its Visage software. PME reported an impressive net profit of $82.8m in FY24 from $161.5m in revenue. It was a very successful year due to a series of new contract wins with US healthcare and life sciences and other providers of life sciences.

There is a lot of debate as to whether or not it is overvalued. But it is unlikely to retreat without a major disruption to its market or the economy generally. Many investors don't understand just how high-margin and revenue-sticky its business model is and how it still has only penetrated a small proportion of the US market.

Neuren Pharmaceuticals is nearly 18 months fresh from being given FDA approval to sell its Trofinetide drug in the US for Rett Syndrome. The stock has re-rated substantially, but is still only A$1.5bn (a fraction of Telix). We see further upside from Neuren entering Europe & Canada for Rett Syndrome and eventually commercialising its secondary asset NNZ-2591.

The company has obtained top-line Phase 2 results for Pheland McDermind Syndrome, Angelman syndrome and Pitt Hopkins syndrome in the last 12 months and is about to commence Phase 3 for the first of these. Moreover, we expect European and Canadian approval for Trofinetide to come in the next 12 months.

Yes this is an easy choice and one that some investors may be doubting in the aftermath of a recent profit downgrade, but hear us out here. They are a global leader in the health care sector. CSL has two primary businesses: flu vaccines and blood products development – for influenza vaccines.

CSL just released its FY24 results. It delivered US$14.8bn in revenue and a $2.9bn post-tax profit, both up 11% from FY23. It paid a total dividend of US$2.64 per share, or A$4. The biggest contributor was the Behring segment which delivered US$10.6bn in sales, $5.7bn of which came from its Immunogobulin products including Privigen and Hizentra.

The company anticipates its profit to be $3.2-3.3bn for FY25 and for revenues to be 5-7% higher. CEO Paul McKenzie proclaimed the company was in a strong position to deliver annualised double-digit earnings growth.