X-ray-machine maker and recent IPO Nano-X Imaging (NASDAQ:NNOX) is having another very good day Wednesday -- and that's saying something for a stock that has more than doubled off its $18 IPO price. In 1:20 p.m. EDT afternoon trading, Nano-X shares are up a strong 8.5% (down just a bit after soaring more than 15% in trading earlier in the day).
Why is Nano-X doing so well? Yesterday, I said that this company's business plan is to manufacture x-ray machines for $10,000 and then give them away for free. I also said this was probably going to be a very popular proposal with Nano-X's customers.
It turns out I was right about that. This morning, Nano-X announced that Mexican medical device distributor SPI Medical, S. A. P. I. de C. V. has signed a deal that promises to provide Nano-X with $119 million -- minimum -- in revenues over the next seven years.
Specifically, SPI has agreed to first seek "local regulatory approvals and acceptance test clearance," and then proceed to "deployment and operation of 630 Nanox Systems" across Mexico, using them to "offer a range of medical imaging services, from 2D X-ray to 3D Tomosynthesis" -- and pay Nano-X for the services.
Assuming the machines are approved for use in Mexico, this deal promises to create at least a $17 million annual revenue stream for Nano-X over the better part of a decade. For a company that to date has no revenues on its books, this is a really big deal -- and why investors are bidding up Nano-X stock today.