Stock in Nanox fell Thursday following a hold placed by the FDA on the premarket application for the company’s multisource, digital tomosynthesis imaging system.
Shares lost nearly 10% of their value Thursday, following five days of losses, reports Seeking Alpha
. The hold will remain until Nanox fixes a number of deficiencies found in its Nanox.Arc 3-D digital tomosynthesis system, according to a filing with the Securities and Exchange Commission.
In response, the company says it will respond by the due date, which is set at 180 days after the federal government’s request for more information was made. “The company expects to continue to optimize and develop further features of Nanox.ARC and is considering submitting an additional 510(k) application for the next version of multi-source Nanox.ARC during the fourth quarter of 2021, which will benefit from the FDA’s feedback on the first version of the multi-source Nanox.ARC,” officials said in the Aug. 19 SEC filing.
Nanox.Arc 3-D digital tomosynthesis system is designed with multiple alternatively-switched X-ray tubes arranged around the patient to scan human body parts and is intended to increase affordable access to imaging for healthcare populations worldwide. The solution is based on proprietary silicon MEMs semiconductor technology, which allows for the generation of electrons without using heat, with the system still performing at the same level as legacy X-ray systems.
The additional application may include the addition of higher-power tubes for a wider range of indications that could raise the chances of its commercial success, according to Cantor Fitzgerald analyst Steven Halper. He also says that the filing of the next 510(k) “is probably a positive,” if it is done on a timely basis, according to Seeking Alpha
its premarket application for the solution back in June. The announcement of the application sent company stocks soaring over 15% on NASDAQ, with shares hovering around $31.
This was a far cry from last September when the company’s stock plummeted
from $66.67 to $28.60 due to a class action lawsuit filed by investors. The suit was the result of a report published by online stock commentator, Citron Research, which accused Nanox of failing to produce any evidence comparing Nanox.Arc to conventional CT scanners, criticized its R&D spending, and claimed it fabricated distribution agreements with fake customers.
“There is not one scientific paper or submission that would back up any of these claims,” according to the Citron report, which described the company’s claims as a "farce". “As a matter of fact, we have not even seen proof of the product and have only seen a mock-up drawing of what this machine is supposed to look like.”
Despite the success of the company’s IPO, which was set up in August 2020, the report resulted in a net loss
for the company of over $11 million in the third quarter of the 2020.
The company earlier this year scored FDA clearance
for its single-source Nanox.Arc digital X-ray technology. Intended to be a less expensive alternative to legacy X-ray machines, Nanox.Arc is designed to generate 2D CT and tomography scans using the company’s digital source. This could potentially expand access to imaging for two-thirds of the world where it is lacking, decrease waiting times and identify serious and chronic illnesses early.
Nanox also recently acquired Zebra Medical Vision and USARAD for $230 million
together. Zebra Medical will embed a scalable cloud infrastructure into Nanox’s imaging equipment to make scanning more accessible and affordable globally. USARAD, a U.S.-based teleradiology provider with over 300 certified radiologists, meanwhile, will make Nanox a provider of subspecialty radiology and teleradiology.