Shares of Nano-X Imaging (NNOX 2.82%), or simply called Nanox, continued jumping higher on Tuesday after the company announced that it's opened a new facility to aid in the production of its medical devices. The stock was already up roughly 20% following the release of financial results last week. And it kept adding to those gains today with shares up an additional 13%, as of 1 p.m. ET.
Nanox hopes to commercialize a digital-imaging device that can replace x-ray technology. The company's fundamentally different system requires novel parts, meaning Nanox has to build them itself. Today, it announced that it's opened a plant to make its Nanox.SOURCE chips, which are essential components for the machines that it hopes to commercialize.
Nanox's business plan is still largely aspirational -- it generated just $1.3 million in revenue in 2021 and this was from an acquired company, not its 3D medical-imaging machines. But today's news simply means that the company is one step closer to making its dreams a reality and that's why investors are excited.
Nanox believes its new production facility will be operating at scale by the middle of this year. That's good news. However, the company is still waiting to get Food and Drug Administration (FDA) approval for its multi-source Nanox.ARC system. In other words, Nanox is taking steps forward but there are still plenty of additional steps to come before the company can create lasting shareholder value.
Therefore, investors should take today's news for what it is: a step. Celebrate the step. But remain patient while waiting for the entire business plan to play out -- it could take years before Nanox gets to scale. And there are plenty of things that could still derail it between now and then.