Why did the shares of the manufacturer of medical equipment NanoX rise by 15% after the report?
Medical equipment manufacturer Nano-X Imaging Ltd. (NNOX) has published a report for the fourth quarter of 2021. Investors took it positively, and at the auction on March 31, the NNOX stock rose by 15.07% to $10.84. Nano-X is not yet receiving much revenue, as it is just selling its medical imaging system, which is a cheaper analogue to traditional MRI devices.
In the last quarter, Nano-X’s revenue amounted to $1.3 million (there was no revenue at all a year earlier), and they received it from sales of radiology services and medical solutions with artificial intelligence (AI) elements. The non-GAAP loss amounted to $15 million, whereas a year earlier, it was $8.4 million.
The revenue figure doubled Wall Street’s expectations, but the loss was more than expected. Should note that Nano-X stock quotes have experienced a drop, having lost over 25% in 12 months?
This is due not only to the general stock market movement but also to the fact that Nano-X could not quickly get its MRI scanner certified by the US Foods and Drug Administration (FDA). Therefore, according to the results of the report, the primary driver of the growth of Nano-X stock quotes was not financial indicators, but a statement that the company had submitted new documents for certification of the latest version of the Nano-X scanner.
According to the company’s management, Nano-X specialists are in constant contact with FDA experts in order to speed up the certification processes. Successful completion of all procedures and getting approval from the FDA will give a strong positive impetus to Nano-X quotes.
The cheap MRI scanner has a large addressable market with expected orders for thousands of devices in the early years of commercialization. Such scanners are in demand in many hospitals that can not purchase and maintain more expensive analogues. The Nano-X scanner can also in rapidly deployable hospitals, for example, in a disaster zone.
