What happened
Shares of Nano-X (NNOX +4.43%) stock jumped out of the gate Thursday morning and are already up 15.1% as of 10:15 a.m. EDT.
The reason: The start-up maker of X-ray machines announced this morning that it has applied to the U.S. Food and Drug Administration for clearance to sell its "multi-source Nanox.ARC 3-D digital tomosynthesis system."
Image source: Getty Images.
So what
Nano-X -- which for simplicity's sake pronounces its name "Nanox" -- explains that specifically, it has filed a "510(K) Class II FDA submission" that seeks "clearance of the first version of" Nanox.ARC 3-D. Nanox describes the device itself as comprising "alternately switched X-ray tubes arranged around the patient ... that produces scans of a human body part."
According to FDA regulations, such Class II devices "require Premarket Notification 510(k)" to show that "the device is substantially equivalent to one legally in commercial distribution in the United States." Because anything already legally in commercial distribution has already been deemed safe for consumers to use, that would mean that Nanox's device, too, is presumably safe for public use.
In other words, if the FDA says yes, Nanox will be able to start distributing the device and collecting revenues from its use.
Now what
Nanox has already received FDA clearance of a different device, its Nanox Cart X-Ray System. Last month, Nanox predicted "an initial wave of approximately 15,000 Nanox.ARC units [sold] by the end of 2024" after it receives FDA clearance.
So in a nutshell, the news driving Nanox stock up today is this:
Pretty soon, this company that has never booked revenue (much less profit) before will...begin booking revenue (and maybe profit, too). That sounds like pretty good news to me.
