What happened
Nano-X (NNOX +4.68%) rose more than 16% on Wednesday. The stock opened at $23.66, then climbed to as high as $28.60 in mid-afternoon trading. The stock is still a lot closer to its 52-week low of $19.05 than its 52-week high of $94.81. Nano-X, which went public with an initial public offering in August of 2020, is down more than 38% for the year, but up more than 24% over the past month.
So what
This was purely a retail-investor push. The stock, which has the potential to be a disruptive force with its low-cost commercial grade digital x-ray system, didn't have any news to announce and its next earnings report isn't until Nov. 17.
Image source: Getty Images.
The key for Nano-X is getting Food and Drug Administration (FDA) clearance for its multi-source imaging system. The company already received clearance in April for its single-source Nanox.ARC digital x-ray system, but the product it intends to market is its multi-source imaging Nanox.ARC machine and in June, it submitted a 510(k) premarket notification application for its multi-source Nanox.ARC 3-D digital tomosynthesis system. It is still waiting for the FDA clearance and in its second-quarter earnings call, said it would likely have to push its launch back from late 2021 to sometime in 2022.
Now what
Nano-X, while it could be a big disruptive force in healthcare, doesn't yet have a marketed product and because of that, isn't yet profitable. It lost $13.6 million in the second quarter, but it does have $193.4 million in cash.
There's obviously a lot of risk here. Not only does Nano-X need FDA clearance for its multi-source machine, it also has to gear up to produce them. It has said it would like to produce 15,000 multi-source units by 2024. The interesting thing is Nano-X CEO Ran Poliakine said last year that the company plans to sell the machines for $10,000 per machine, a fraction of what typical X-ray machines cost and instead make its profits from a per-scan basis, essentially a software-as-a-service (SaaS) model.
Another concern with Nano-X is it is in the process of buying two companies, medical artificial intelligence (AI) developer Zebra Medical Vision and USARAD, which operates a network of 300 radiologists and its related company, Medical Diagnostics Web. To pay for those purchases, it is likely the company will sell more stock, diluting the stock's price.
