CT vs Tomo vs Fluoro

I have been having some interesting discussion with Nuno Lemos aka StockZombie @ Twitter, who has compiled his due diligence on Nanox at "Nanox Vision – a fools gold?"  

Here is some feedback on some of his points. 

Can you replicate CT with Tomo?

Nanox has been misleading the public, investors, and medical professionals for quite some time that it can do CT (including the "noise-free simulation" slide shown on the TV screen near the end of the RSNA 2020 presentation, 24:04).

That simulation was supposedly done with an imaginary device with 11 sources and detectors that don't exist.

But Nanox admits in its Prospectus that it intends to do only tomosynthesis - no usable axial slices can be produced.  CT or CAT is a short-cut for Computed Axial Tomography.  See also below.

Does the proposed Nanox.Arc 2.0 have 5 or 6 x-ray sources?

The information about the 5 x-ray sources comes from a video showing the making of Nanox.Arc 2.0.  If one pays close attention at 0:19-0:20, one can see the holes of the 5 sources.  I tweeted about it and so did Nanox promoter, but he did not count the holes.  

counted by me

not counted by promoter

The CEO was lying throughout the RSNA 2020 presentation that the device had 6 x-ray sources.  If the sources were so precious and novel, he would have gotten a least the number correct, as this was the first public demo of the source.

Here is how Nanox advertised its presentation on its exhibitor page at RSNA 2020:

Nano-X Imaging Ltd Nanox is a developer of MEMs based electrons field emitter cold-cathode, enabling the manufacturing of digitally controlled, low-cost x-ray tubes. Nanox's technology is under third party review, pending 510k clearance. Please join the Virtual Meeting Room button below at 10:30 am CST on Thursday, December 3 for a Featured Demonstration as Nanox unveils a proprietary digital X-ray source based on a silicon MEMs electrons field-emission technology. The presentation debuts a novel X-ray tube that emits digitally controlled X-ray pulses and can be used across multiple medical imaging use cases. https://www.nanox.vision 

So, what is the main proposed modality of Nanox.Arc 2.0?

Page 1 of the Prospectus explains that the main use of the Nanox.Arc that Nanox supposedly plans to commercialize is tomosynthesis:

Subject to receiving regulatory clearance, the first version of the Nanox.ARC that we expect to introduce to the market will be a three-dimensional (“3D”) tomosynthesis imaging system. Tomosynthesis is an imaging technique widely used for early detection, that is designed to produce a high-resolution, 3D X-ray image reconstruction of the scanned human body part for review by a professional diagnostics expert

Slide 8 from the March 17, 2021 Oppenheimer presentation states: 

The Nanox.ARC 3D computerized tomosynthesis:  New breed of medical imaging.  

Also, if one looks carefully during the RSNA 2020 presentation video (for example, at 12:55), what Nanox appears to be doing for any "scan" is collecting 45 images (5 sources x 9 tilted positions) and creating synthetic slices from them in a plane parallel to the flat detector placed in the "box" below the arc.

Can the proposed Nanox.Arc, either single-source or 2.0, do fluoro?

According to Nanox, Nanox.Arc can do fluoroscopy (even though it is not its main use case), but Nanox can also license its proposed x-ray source to traditional device manufacturers to incorporate in their own fluoroscopy systems (the white paper addresses that second case).  Today's fluoroscopy systems are very simple - a single source (pulsed, for two reasons - to prevent source overheating, and to reduce radiation exposure) and a fast detector (10+ fps) - clearly a single-source Nanox.Arc can do it (for say, $200,000/unit) ,assuming a powerful enough hot-cathode dental source with a stationary anode (but the best price quote for a new system I have gotten is $28,500/unit FOB Shanghai, and it is not cleared yet in the USA, so it cannot be used as a predicate).  

Slide 20 of the January 2020 presentation at JP Morgan shows the multi-source Nanox.Arc device doing "3D fluoroscopy" (I guess you need a Hololens or Oculus headset for it) using 3 of the 5 sources. 

Yes, fluoroscopy has its own product code(s) for 510K clearance purposes (for example, JAA), but a system can have more than one product code for clearance purposes.

Update:  Here is the completely-misleading slide from the January 2021 JP Morgan presentation that shows that the proposed Nanox.Arc 2.0 can replace the Chinese fluoroscopy system, among others.  See also my previous post, focusing on cost.

An early easter egg

Nanox removed the link to its Mammography white paper from its webpage sometime in January 2021 (the paper was first published in late November 2020 in the company's RSNA 2020 virtual booth, and then a link to it was posted on the front webpage in December 2020).  There must be something very important there for Nanox to remove it. 

Maybe it is this:

The first application for [Nanox novel x-ray source] technology is breast tomosynthesis using Nanox’s small X-ray sources in an arrayed series.

Proposed stationary array head (design concept)

Doesn't look much like the multi-source Nanox.Arc, which is supposed to be the first commercial device using the proposed Nanox source, does it?

The paper itself is self-contradictory.  It claims on page 14 that the scan time of one 3D image in present breast tomosynthesis is 15 seconds - moving tube between shots.  But on page 17, the paper admits that the gantry of the 10-year old Hologic machine takes only a total of 4 seconds for the scan (this old intro confirms it).

Why is this important?  Fujifilm, the first potential licensee for Nanox source (see page 88 and II-3 in this registration statement), declined to license the technology when its rights expired in June 2020, but Nanox insists that Fujifilm is still its strategic shareholder and a Mammography OEM (presentation slides 3 and 35 from JP Morgan conference in January 2021).  Nanox also told the press in March 2020 that its Nanox.Arc can perform no-squish mammography, which, of course, it can't (not even in theory):

It could perform tests such as ... a no-squish mammogram for women.

More later.

Update March 31, 2021:  Nanox promoters insist that Fujifilm invested in Nanox.  According to Nanox draft registration statement filings with the SEC, that is not really correct.  For example, the December 2019 filing states that in May 2019, Nanox Gibraltar (that is not Nanox, but its predecessor) issued 1,583,710 ordinary shares to FUJIFILM Corporation for an aggregate purchase price of approximately $3.5 million, and in exchange FUJIFILM was granted a right to first negotiation for license - a right that FUJIFILM declined to exercise and it expired.  A draft filed in August 2020 mentions the same number of shares, but the prospectuses filed in August 2020 and February 2021 do not mention any Fuji shares.  It is rather strange that the number of shares remained the same between December 2019 and August 2020, as a January 2020 press release by Nanox implied that Fujifilm participated in another funding round.

Foxconn is joining Fujifilm, SK Telecom, and other private investors, who have previously invested in the project, as part of a round that is aimed to support Nanox’s development, commercialization, and deployment of its Nanox System.

The press release, issued just before the supposed submission for FDA clearance, is also remarkable because it proves that the Nanox device (presumably, the multi-source one) cannot be cleared. 

The Nanox System is composed of the Nanox.Arc, a novel digital X-ray device...

Novel devices, by the dictionary definition, are obviously not substantially equivalent to any device on the market. 

Update April 12, 2021:  Nanox promoters continue to insist that Fujifilm invested in Nanox, citing a crunchbase entry about the Series B round.   However, it appears crunchbase simply misread the tricky Nanox press release.  

Foxconn is joining Fujifilm, SK Telecom, and other private investors, who have previously invested in the project, as part of a round that is aimed to support Nanox’s development, commercialization, and deployment of its Nanox System.

See, the press release never states that Fujifilm invested or is about to invest in Nanox.  It says that Fujifilm invested in "the project" (that is, Nanox Gibraltar, a Nanox predecessor).  And it does not say that Fujifilm is participating in this round.  In any case, all subsequent SEC filings confirm that Fujifilm did not invest in Nanox - either in that round or thereafter.  As confirmed by the recent annual report, Fujifilm is neither a strategic investor in Nanox nor a Mammography OEM for Nanox, contrary to all investor presentations. 

see, for example, page 3 and 35 in January 2021 presentation at JPM conf.

How does the device look like?

Nanox website, investor presentations, social media, press releases and promo pieces are all littered with designs and photos of various versions of the fancy but fake multi-source Nanox.ARCs.  But you will never find the single-source device that Nanox claims to have submitted for FDA clearance in January 2020.  Not once.

So, how do we know for sure what the device is supposed to look like?  Is it the ugly one that supposedly took the radiograph of the CEO's hand at RSNA 2020 or some fancy multi-source one with just one tube activated?   Has Nanox ever stated, in writing, how the device looks like?

Yes.  A presentation slide helps here - this one, Slide 22, is taken from the January 2021 JP Morgan presentation deck.

It states:

On the left the hand of Ran Poliakine, Nanox s CEO, as was taken during the 2020 RSNA live demo, using the Nanox single source device with the Nanox tube;

So the ugly device from the RSNA 2020 live demo is indeed the device Nanox claims to have submitted for FDA clearance. 

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (the ugly device).

Does the FDA ever disagree with the Third Party recommendation?

Let us assume for a moment that Nanox were not a fraud and the Third Party did indeed recommend SE on December 28, 2020.  Is it possible that the FDA disagrees and issues an NSE decision anyway?

The FDA's "Third Party Review Organization Performance Report" that comes out each quarter can be very useful for answering such a question.  The latest one has this nice table.

Turns out, it is not very likely, but it is possible.  Of the 75-85 submissions each year, the FDA disagrees in 1 or 2 cases.  Between 5 and 10 submissions are withdrawn or deleted (basically, the submitter gives up).  Interestingly, no Third Party seems to make an NSE recommendation - I guess that's why they are paid the big bucks by the submitters.

Update April 5, 2021:  Nanox beat the odds and got clearance for a Nanox.Cart (the ugly device).

The chip that proves that Nanox is a fraud

Nanox tweets how its "small" chip is changing 100 years.  That would be quite a feat, if the chip were not fake.  But it is easy to see that it is fake.

 

Let's magnify:

The things in the red ovals are either defects or large specks of dust (which should not exist in a clean room).  The chip is not functional.

Why doesn't Nanox have a better picture of the chip?  Nanox has no access to facilities to manufacture the chip, contrary to the false claims in its Prospectus.  Specifically, Nanox claims to have its own equipment placed in clean rooms at the University of Tokyo.  However, there is no equipment that belongs to Nanox there.  Moreover, the University of Tokyo prohibits any commercial use of its clean room facilities, which it rents per day to anyone who is doing academic research. 

The proposed chip, even if manufactured without defects, changes nothing.  The proposed chip requires much higher voltage than a corresponding filament, first introduced by GE in 1913.  The proposed x-ray tube with such a chip in the cathode generates just as much heat as a regular tube using a filament (since 99% of the heat in both tubes is generated at the anode and 99% of the energy used by both tubes is wasted as heat).  Switching speed is the same as a regular tube with a grid.

Update:  Another view of the chip, from a snapshot of the RSNA 2020 "Nanox - Technology & Vision" video (1:02).

Another market-moving tweet

Nanox tweets that is going to change the world, and the stock jumps 15%.

The market is oblivious to the irony that it is investors who have been waiting for months for "FDA approval," whatever that is supposed to mean.  As of today, no Nanox x-ray system is legal anywhere in the world. 

Expect FDA approval in early 2020 (quoted November 2019 conversation with the CEO)

Note also that all my research so far indicates that it is not true that two-thirds of the world cannot reach medical imaging and that one-third of the world waits too long to get a scan.  The availability of low-cost x-ray systems (both stationary and portable/mobile) and ultrasound devices has solved this problem years ago.

 

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (the ugly device).

Doubting the doubter

Doubter71050722 tweets this morning that the CEO sold 750,000 shares after the Q4 results call, and everyone on Twitter doubts him.  Stock even shoots up nearly 30% pre-market.

But he provides a link to the emailed forms on the SEC website.

He also notes that the CFO also sold 40,000 shares.

 

Now, why are they in such a rush to sell, if the "FDA approval" (as the CEO likes to mislead and misbrand the supposedly-pending FDA clearance) were to come within "two weeks" of March 2,  that is, on March 16, tomorrow?

Update (March 17, 2021):  Director Onn Fenig follows the CEO and CFO lead and sells all his 12,573 shares.  But the CEO insists at the Oppenheimer conference today that "FDA approval" will be coming any day - he is an artist!

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (an ugly device).

Importance of using the right terminology

Nanox and its promoters want you to believe that FDA clearance, also known as premarket notification or 510(k), and FDA approval are the same thing.  Here is what the Code of Federal Regulations, the US administrative law, states:

Submission of a premarket notification ... and a subsequent determination ... that the device intended for introduction into commercial distribution is substantially equivalent ... does not in any way denote official approval of the device. Any representation that creates an impression of official approval of a device because of complying with the premarket notification regulations is misleading and constitutes misbranding. ( 21 CFR Part 807.97 ) 

So, Nanox is misleading and misbranding on slide 3 of its investor presentation:

And on its investor calls.

And one more thing.  Notice the device is "intended for introduction into commercial distribution."  But Nanox claims it does not intend to introduce into commercial distribution the device it has submitted, the single-source Nanox.Arc, according to its latest prospectus.

Subject to receiving regulatory clearance, the first version of the Nanox.ARC that we expect to introduce to the market will be a 3D tomosynthesis imaging system [not the single-source device].  If cleared by the FDA, we expect to commercialize the multi-source Nanox.ARC and we may seek alternatives for commercialization of our single-source Nanox.ARC. (page 79)

If the device was not intended to be marketed in January 2020, then the premarket notification was redundant, and the Third Party should have immediately rejected it, if it knew that the device was not intended to be marketed.  Did the Third Party know what Nanox was writing in its draft registration statements filed with the SEC?  And that is one of the reasons why the submission was likely fraudulent, if Nanox submitted anything to anyone for clearance.

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (the ugly device).  So, what were the Third Party and the FDA told?  More hints when the FDA published the summary document, around May 1st...    

Side by side

Nanox tweets "It's time to move forward. It's time for Nanox."

Maybe it is the Twitter limitation, but it is not clear what Nanox meant to write.

On the left, we have Hologic EPEX digital x-ray system, introduced in 1999.  On the right, we have a device that simply cannot take Chest PA, the most common medical x-ray image worldwide, even if it weren't fake.

Is Nanox finally admitting that the latest version of its multi-source device, the one that Nanox is promoting here, is the equivalent of an ancient x-ray machine?

The Hologic system had an introductory list price of $395,000.  Nanox says free, $10,000, or tens of thousands of dollars, depending on the day.

Please let me know, if you know the clearance, or 510(k), number for the Hologic device.  The Nanox device has not been submitted for clearance, according to Nanox.  Therefore, it cannot be promoted.  "For demonstration purposes only" does not really cut it, but that's for the FDA to decide, of course.

Update:  Here is how one more modern and cleared x-ray machine looks like (list price is below $10,000, I believe, detector excluded).  X-ray is not x-ray, it seems.

Foolish misdirection

Nanox stock is up more than 15% today.  The catalyst may have been a nice promo that claims that Nanox, the healthcare disrupter, is about to receive FDA clearance within a month and start distributing its new X-ray device.

Quite interesting, given that Nanox claims that it has not submitted its magic device for FDA clearance yet.  Nanox claims instead that it has submitted another, a "single-source," device that it does not intend to market or ship or distribute or offer for subscription or service.    

Here are some of the factual inaccuracies and false implications in the promo:

• Nanox has a new kind of X-ray
• X-rays are kind of boring
• [X-ray devices] are very expensive
• MRI devices use or create X-rays
• A CT scanner costs about a million, 2 million, 3 million dollars
• Nanox has made a radical new discovery
• The traditional X-ray devices and CT scanners create X-rays by heating the machine up over 1,000 degrees Fahrenheit, might be 2,000 degrees Fahrenheit
• X-rays devices and CT scanners are incredibly hot machines and have to be cooled down
• The expense in X-rays devices and CT scanners is in cooling the devices down
• Nanox can create X-rays without having to manufacture all this heat and cool the machine down
• Nanox proposed machine is far cheaper (to manufacture), $10,000 instead of a $1,000,000
• Nanox will radically disrupt the market, and is also going to expand the market
• We are going to see a lot more X-rays
• The proposed Nanox machine (a rudimentary tomosynthesis device) can generate images that are comparable to MRI images or CT images, not just to traditional X-ray or tomosynthesis images.

Update (March 13/14, 2021):    thedudemd  @ Stocktwits disagrees that the factual inaccuracies are factual inaccuracies and argues that 

a)  "Traditional xray tubes used in cts do get incredibly hot; so much so that scanners automatically shut down if tube gets overheated,"  and   

b)  "ct scanners do cost millions of dollars."

Tubes or devices/machines?  The Fool contributor said that the traditional x-ray device or traditional CT scanner was being heated up over 1,000 degrees Fahrenheit, which is clearly not true.  These systems operate at room temperature.

But let's talk tubes.  Both the traditional and the proposed Nanox tubes use the exact same inefficient mechanism of generating x-rays, whereby nearly 99% of the heat is generated at the anode and nearly 99% of the energy used to generate x-rays gets wasted as heat.

Interestingly, the filament in the tiny incandescent Christmas tree lightbulb gets even hotter - 2,200 degrees Kelvin to 3,200 degrees Kelvin -  or 3,500 degrees Fahrenheit to 5,300 degrees Fahrenheit!  Each one filament operates at about 2.5 V consuming about 0.4 W, and there are hundreds of them on the tree.  Christmas trees must get incredibly hot and burn up instantly, no?

  

Photo by Jason  Krieger from FreeImages.com

Regarding costs - maybe the latest and greatest CT scanner could cost over $2 million, but you can buy a used one for $80,000, as described here and here.   Of course, the proposed fake five-source Nanox.Arc is in no way comparable to even the oldest, cheapest and abused CT, as it cannot generate axial slices, even in theory.  Moreover, it is not even submitted for clearance, according to Nanox.  The device that Nanox claims to have submitted for clearance is a single-source device that cannot be cleared.

Update June 3, 2021:  The Nanox single-source device that got cleared was the Nanox.Cart.

A reason

There are many reasons why I suspect that Nanox did not submit anything to anyone for FDA clearance, or if it did, it did so fraudulently. 

Here is one.

It is February 7, 2020. The month of January had been very exciting at Nanox because the team finally submitted the super-secret single-source device for FDA clearance, after getting it to work and completing extensive testing with it at Hadassah.  No more need for fake videos showing fake tests of fake devices.  Right? Everybody is excited and still celebrating - even the lawyers and the assistants know what Nanox has achieved - they are getting rich! So what does Nanox do? It files a draft registration statement with the SEC and states on page 1: 

As a first step, we plan to submit a 510(k) application for a single-source version of the Nanox.Arc to the U.S. Food and Drug Administration (the “FDA”) in January 2020.

Plan to submit?  But it is February 7 already!  It should read "we submitted!"   How come whoever wrote the filing forgot about the submission?  On page 1, not buried on page 146 or something...

And what else do we learn in that draft registration statement on page 9?

We have not produced a working prototype of the Nanox.Arc

Wait, what?  How can you do testing, if you don't even have a working prototype?   Where did all the numbers and images in the submission come from?  How did Nanox write these sections in the submission without a working device:  Specifications , Substantial Equivalence Comparison, and Performance? 

Note that regulations require that all

510(k) submitters must include a statement certifying that all information submitted in the 510(k) is truthful and accurate and that no material fact has been omitted. 

So, did Nanox file a false draft registration statement with the SEC, or did Nanox made false statements to the FDA, or maybe both?

Note:  The fake video of the fake device titled "Nanox ARC  -  Raw chest scan demonstration," that was later "updated," was initially encoded on February 25, 2020.  Here is a snapshot.

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (the ugly device, not the one shown here).  So, the draft registration filing was erroneous or the clearance submission was fraudulent.  More hints will be revealed in the summary that will be published around May 1st.  

Another weird press release

 According to the today's press release,  

Nanox is Scaling up Semiconductor Fabrication Plant in South Korea in light of Increased Demand

and

Nano-X Korean Inc, ... boosts construction to support key source manufacturing in light of growth in global demand

So, Nanox already has a fabrication plant, but is now scaling it up, and actually boosting the construction of a new plant, to meet increased demand for its products?

Turns out, none of the above.

The press release explains down below that the plant or FAB is only in the planning stage, and no construction has began.  It is just a piece of barren land and a nice design.  The CEO further hedges that there is no demand, but just a "growing interest in demand," whatever that means.  Clearly, demand is zero, as the product has no regulatory clearance (it is, in fact, fake, after all).  He also seems to admit that the company is "undergoing a smooth transition from development to manufacturing."  Meaning, there is no manufacturing.

Investors also learn that Dr. Ilung (IU) Kim is now a Chairman of Nano-X Korean Inc.  He had previously been introduced by Nanox as a President of SK Telecom (Hong Kong Office) just before his RSNA 2020 testimony disappeared.  He was not considered an executive officer or part of the management team as late last last month, based on the prospectus and latest (January) slide deck.  In a press release by another company, he was introduced in February as the president of SK Telecom, ICT committee.  Eli Reifman, the convicted felon, claims to be a marketing manager at that company.

So, Dr. Kim states:

Scaling up the production line to meet market demand is one of our main priorities, as we would like to see the Nanox.ARC systems tested and operating globally as soon as possible

But, again, how can a production line be scaled, if it does not exist yet.  Why do you need a production line, if all you need a is a few units to be tested?  Didn't Nanox assemble 10 such systems in November, per investor call, and all of them have now vanished, per latest investor call?

Nanox claims in its prospectus to be manufacturing the chips of the cold cathodes in the clean rooms at University of Tokyo in Japan using its own equipment, but that is a lie because the University prohibits commercial use and all the equipment belongs to the University.  So, the novel cold-cathode x-ray source is just a figment of Nanox imagination, as of today, yet Nanox claims that the device it has submitted for clearance uses that source.  I wonder what the FDA thinks of that.

Update March 11, 2021:  The Kim/Reifman connection was first pointed out to me by Steve @ Yahoo.  

Update March 22, 2021:  TerraPharma1 @ Twitter found the FAB project on the website of the reputable Korean architectural and construction management firm Samoo C.M.  Turns out the actual design/plan is different from what Nanox and its promoters have been posting.

The parcel covers about 10,000 square meters, while the building is about 4,000 square meters, per Samoo.  Nanox claims to have paid $6.2 million for the land, per Prospectus, page F-34 (which seems on the high side - who sold the land to Nanox?). The project is supposed to be completed in October this year.  The parcel is located at about 37.1527, 127.2995 , closely in line with the coordinates first published by BH @ Yahoo.com in February.

Numerous discrepancies are visible - The Nanox and Samoo designs are essentially two different designs:

• a long ramp A in Samoo vs very short one in Nanox.
• a cut in section B in Samoo vs no cut in Nanox, and section B is shorter than then middle section in Samoo vs taller than the middle section in Nanox
• section C is same height as middle section in Samoo, but shorter in Nanox.  Shape is different.
• section D is equal height to the middle section in Samoo, but taller in Nanox

If Nanox were serious about getting 150,000 nano-Spindt cold-cathode chips (for the supposed 15,000 ARC units), it won't be building a new fab anyway.

Update April 19, 2021;  Someone posted on twitter the info about the permit for the building granted on April 15.

After OCR and google translate:

경기도 용인시 처인구 원삼면 학일리 원삼 일반산업단지 산업-2

허가구분               신축허가          허가/신고일              20210415

건축면적(m2)            2208.43          대지면적(m2)             11124

연면적(m2)              4810.1

주용도                 공장              기타용도

착공구분         미착공       착공예정

실착공일

사용승인구분                 사용승인일

Industry-2, Wonsam General Industrial Complex, Hakil-ri, Wonsam-myeon, Cheoin-gu, Yongin-si, Gyeonggi-do

Permit Category New Construction Permit Permit/Report Date 20210415

Building area (sq meters) 2,208.43  Site area (sq meters) 11,124

Total Area(sq meters) 4810.1

Main use Factory other use

Start of construction Classification Not to be started Construction scheduled to start

Actual date of arrival

Use approval category Use approval date

Update October 15, 2021:  The Nanox design appears closer to what is on the ground so far.  Images below are snapshots from recent TV footage.

Why Nanox.Arc has no chance for clearance

Nanox has a nice video on its front webpage titled "Understanding Nanox technology & vision"  It is extremely misleading, and, thus, extremely useful to regulators.  It proves that Nanox.Arc has no chance for FDA clearance, not this year and not ever.

How so?  Well, about 40 seconds into the video, the mesmerizing voice proclaims:

Years of dedicated development by Japanese and Israeli scientists have achieved a novel X-ray source and device that bring hope by being more affordable by orders of magnitude than the conventional X-ray technology used today.

Oops.  See, the FDA clearance pathway is only for a device that is substantially equivalent to a legally marketed device.  A novel device will be immediately rejected, as it fails the RTA checklist, and must go through either a De Novo classification request or a PMA approval submission.  Either one takes years.

Incidentally, according to the same segment in the video, the device below represents the X-ray technology used today:

Unfortunately, that is a sketch of an MRI device, which has nothing to do with X-ray technology - note the "chimney," which is actually part of liquid-helium cooling system (the superconducting electromagnets require very low temperature to operate).

Thanks to ThreadEnhancer @ AuntMinnie for the novel tip.

The video was published sometime in February or March, 2020, that is, after the supposed January 2020 submission for clearance of the single-source device.

Update:  The MRI device in the sketch is a stylized Siemens MAGNETOM.

Update (March 13, 2021):  The video, of course, is not the only place where Nanox explicitly describes Nanox.Arc as novel.

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (the ugly device).  Nanox.Arc (a multi-source one) still has no chance of clearance, unless Nanox admits that the device is not novel. 

Nanox explanation of the FDA timeline makes no sense

According to the latest prospectus and Q4 results call, the recent timeline of Nanox 510(k) submission goes like this:

• December 28, 2020:  The Review Organization recommended [Nanox single-source device] to the FDA for clearance
• January 1, 2021:  [Nanox] received an information request from the FDA through the Review Organization
• January 4, 2021:   [Nanox] responded
• January 30, 2021:  [Nanox] received additional information request(s) from the FDA
• March 2, 2021:  [Nanox] submitted a [complete and] comprehensive response.

If all of the above were true, Nanox should have received clearance no later than yesterday, March 8, 2021.  The explanation as to why is in two FDA guidance documents - 510(k) Third Party Review Program and FDA and Industry Actions on Premarket Notification (510(k)) Submissions: Effect on FDA Review Clock and Goals.  

Essentially, Section 523(a)(2) of the FD&C Act requires the FDA to make a final decision whether to clear the device or not within 30 calendar days after receiving a recommendation from the Review Organization.  Note that the final decision is confusingly termed "initial classification."  Any requests for additional information stop the clock until a complete answer is received.  So assuming the FDA got the recommendation on January 1, and then the clock stopped for 4 days or so and then for another 32 days or so, while FDA awaited for the complete responses, then the 30-day calendar deadline expired on March 8, 2021.

But Nanox press release says:  

The Company is in direct communication with the FDA and continues to expect that it can obtain U.S. regulatory clearance of the single source Nanox.ARC this year  (?!?!?)

And during the call, on March 2, the CEO rambled about "quite soon," "30 days" from the day of the call, and even "a couple of weeks" from the day of the call.  If Nanox disclosures were correct,  then it should have been within "a week."

So, in summary, Nanox is lying to investors about the status of its submission for clearance of the single-source device.  In fact, there are reasons to believe that Nanox may not have submitted anything to anyone for any clearance, or if it did, it was fraudulently.

And, of course, Nanox CEO did not miss the opportunity to confuse investors again by talking about approval (aka PMA) on the call vs clearance  (aka 510 (k) or pre-market notification).

We continue to believe that we will receive FDA approval of both our single source and multi-source device still within this year

According to Nanox own disclosures, the company has not submitted for approval but for clearance.  Or maybe this was a Freudian slip?  Any device that fails to get clearance is automatically classified as Class III, and would require a submission for approval, in which case Nanox has to supply sufficient valid scientific evidence that provides reasonable assurance that the device is safe and effective for its intended use or uses.  That translates into years and millions of dollars in human trials.  Not happening this year.

Update April 5, 2021:  Nanox got clearance for a Nanox.Cart (the ugly single-source device), within 30 days of the call, just as the CEO said.  Outstanding FOIA requests may eventually shed light on the actual FDA timeline. 

Cost confusion

How much does the fancy Nanox.Arc 2.0 cost to manufacture?

The original press release says $10,000, and it can do, among others:

• Real-time 3D imaging 
• Multi-spectral layering 
• Digital sync with treatment tools

CEO reiterated $10,000-$15,000, except for the first 100 units, on the Q4 2020 results call.

But Slide 41 in the January 2021 presentation says:

Costs tens of thousands of dollars

So, $10,000 or tens of thousands dollars?

Neither.

Any functional device that can do real-time 3D imaging, even basic tomosynthesis, will require a built-in detector that costs well over $100,000.

If we remove the real-time requirement and are willing to strap and completely immobilize the patient for over 4 minutes while taking the 45 projections for the tomosynthesis, then we can maybe possibly, however unlikely, get to $20,000, using the lowest-cost DR detectors, and assuming extra cheap hot-cathode dental tubes, HV generator, PC, etc.

Update:  The combined selling price of the three "analog" systems (which are actually quite digital, in fact) that are supposed to be replaced by Nanox.Arc 2.0, as shown in that slide, is less than $500,000, not "Millions of dollars" as the slide claims (actually, less than $400,000, if one leaves out the redundant Canon/URS U-arm machine)

Update:  Why is cost important?  First, the company has about $200 million in cash only, which will barely cover production and deployment of about 1,000 "working" non-fake machines.  Second, payback becomes moot (in the same presentation, Slide 27, the company claims $27,000 in estimated "minimum" annual revenues per machine) 

Update:  Of course, even if Nanox.Arc 2.0 were not fake, its design does not permit taking a Chest PA image, which is the most common x-ray procedure (but it can be easily done with either the Canon or the Shimadzu machine on the slide) 

Yes, We sCam!

 

Nanox tweets an interesting excerpt today, stating that the company 

has already made 25 of its ARC systems at a partner facility in Israel.

It is interesting, because the CEO and CFO forgot to mention that number three days ago at the investor call, even though they were asked what exactly happened to the 10 prototypes that were supposedly being assembled for partners during the investor call in November 2020.   The latest prospectus, filed February 12, 2021, states on page 1 that the company has only 1 working prototype (even if true, it is likely the ugly single-source device, not shown, here: added March 25, 2021).

Here is the cropped photo from the tweet, showing the supposed 25 systems:

It actually shows 8 Nanox.Arc "systems" only, and none of them is functional (3 don't even have a rudimentary skeleton Arc).

Just another day at Nanox - yes, we scam!

Thanks to K @Yahoo for the slogan idea.

Update (March 12, 2021):  Only one of these 8 unfinished and fake devices looks like the latest version of Nanox.Arc (even though it is very hard to see from this perspective) - 3 don't have an Arc and the other 4 have the black half-arc skeleton of Nanox.Arc 2.0.

Update (March 25, 2021): Another photo surfaces (posted by TerraPharma1 @ Twitter, likely coming from the company - CEO collages it) from the supposed March 16 "company event at the factory [that] celebrated many more devices at the production floor" (Slide 11 and 15:11 into Oppenheimer presentation on March 17, 2020).  Not even one of these devices is completed (to reiterate, the CEO claimed on the November 2020 results call that the company was assembling 10 devices, and latest Prospectus dated February 2021 says only one working prototype, likely the ugly single-source device, even if true) 

Here is the actual March 5 photo (edited by Bloomberg):

And, just so we keep everything together, the one posted by John Nosta @ Twitter
 

Nanox CEO caught lying again

According to Nanox CEO, 

SK Hynix is one of the largest MEMs manufacturers in the world. 

That is an outright lie.  Here is the ranking of the top 30 MEMs manufacturers in the world.  SK Hynix is nowhere to be seen.

Source:  Yole via EETImes.eu

Quick credibility check

It is easy to spot that Nanox' management is not familiar with this simple thing called the truth.  Here is a quick example.  Today's press release announces:

With [the RSNA 2020] demonstration, we brought X-ray technology, which had not seen material technological advancements since its discovery more than 120 years ago, into the 21st century.

But Nanox own technology white paper states:

Modern X-ray and the evolution of radiologic modalities started in 1913 by introducing tungsten filament to the cathode part of the “Coolidge” tube, which supplied far better reliability than the preceding technologies. Over a hundred years later, X-rays continue to be generated by electrons supplied by heating tungsten filaments. The history of radiology is the history of the “Hot Cathode” invented by Mr. Coolidge.

1913, by the way, was just 108 years ago.  And X-rays were discovered in 1895, according to the same paper.

So, which one is it?    Did X-ray technology see a material technological advance after the discovery of X-rays but prior to RSNA 2020, or not?  The white paper says, yes, in 1913, when the hot-cathode technology introduced by GE completely obliterated the cold-cathode technology that Roentgen used and that Nanox now pretends to use.  The press release says no way!  Which one (press release or white paper) should we believe?   Which one (Coolidge or Poliakine) advanced X-ray technology?

Update:  By the way, Nanox cannot say that this is a simple mistake or misunderstanding, as Nanox claims that the Chair of its Advisory Board is Morry Blumenfeld, who was a GE employee.

You can't have it both ways

Even the best artists (scam artists included) slip sometimes - they are human, after all.  Let's take a listen to what the CEO has to say in the Nanox "vision" video released in late November ahead of RSNA 2020:

"Our mission is to democratize medical imaging, to make it way more available.  There are simply not enough machines today - it is too expensive - expensive to buy, expensive to maintain, expensive to operate, and therefore not very practical." (starting at 47s)

So, medical imaging  is not practical and accessible today?  

Here is what he wrote in his March 30, 2020 blog post:

In Israel, as in practically every country in the world, we have a real shortage of [COVID-19] testing kits.  Lung scans on the other hand are accessible, cheap, and the results are immediate - a critical factor in patient outcomes and in preventing the spread of the infection.

He can't have it both ways.  Chest (or lung) radiographs represent the majority, about 40%, of all imaging procedures performed worldwide, according to the World Health Organization (Communicating Radiation Risks in Paediatric Imaging, page 16).  The CEO states that they are accessible, cheap, and with immediate results in practically every country in the world.  So, it seems there are enough medical imaging machines, they are not expensive, and they are easy to operate and quite practical, no?  Poof goes Nanox vision!

In his blog post, he also states that Nanox machines

can be installed not only in medical facilities but also in offices and even retail locations, so people don’t need to drive hours to get to a scanning machine.

But Nanox now admits that is not possible - Nanox proposed machines leak radiation - and any potential deployments of those proposed machines, in the unlikely event that they ever become real, is at risk due to:

the inability or unwillingness of potential customers to invest in the required safety infrastructure, including customary X-ray shielding, to allow the Nanox.ARC to be safety[sic] operated (page 17, prospectus)

 

The production Nanox.Arc has no detector?

So John Nosta puts a tweet out that shows that Nanox.Arc has no detector, and therefore, cannot make any images.  Stock goes up 15%.

Here is the fake, non-functional device that (supposedly) goes into production, with no clearance or any regulatory approval pending, in all its glory:

John Nosta is the same evangelist who in August 2019 posted the photo of the completely-fake 12V-battery-operated Nanox.Arc 1.0 that could emit electromagnetic waves, but only in the visible spectrum.  According to Nosta, it could fit in a suitcase (it must be a gigantic suitcase!)  and would emit "lower" radiation (which is correct, as visible light is lower in the energy spectrum than x-rays, but can't penetrate most human organs and is therefore useless for diagnostic purposes).  

Update:  In case it is not clear, here is where the detector goes in Nanox.Arc 2.0 (which is the finalized production-ready design, per CEO investor presentation post RSNA 2020 demo).

Cropped snapshot from the Making of Nanox Arc video 

Update:  Added zoomed view of Nanox.Streak and Nanox.Thread:

Update:  Apparently some people are confused where this picture was taken, and believe it is at Foxconn, where the volume production was initially supposed to take place.  The picture was taken in Israel, however (notice the green EXIT sign above the door in Hebrew יְצִיאָה - thanks google translate!).  

Due, in part, to travel restrictions as a result of the COVID-19 pandemic, we expect to manufacture a small number of Nanox.ARC units in Israel on a purchase order basis that will be used for the acceptance tests under our MSaaS agreements, demonstrations, regulatory approvals and for the initial global deployment, among other purposes. (page 5, prospectus)

Update:  Added a link to Nosta's August 2019 tweet and a few words about it.

Update:  Ok, ok, this could be the detector.  Added a question mark to the title of this post...

Update April 21, 2021:  Based on inspection of the latest Nanox video, the device in Nosta's tweet has no detector.  What looked like a possible detector in the view from this angle is likely just a part of the support frame.

zoomed-in snapshot from the new video

Nanox is faking it and stealing

Nanox posted a promotional video today titled "NanoxCLOUD Demo Flow" and then removed it (after some comments on it emerged).  It appears Nanox stole some sample CT images made 15 years ago from a French DICOM viewer vendor and used them to make the video, in violation of the owner's terms of use which prohibit commercial use.  A snapshot from this video has previously appeared in Nanox investor presentations, but the resolution was too low to make any conclusions. 

Here are two shapshots of interest (red ovals for the fun stuff).

Update February 19, 2021:  Note that the findings in the diagnostic report, obtained with the help of Artificial Intelligence (AI), mention "T2 hyperintense white matter lesions," which is mAgIc, since it is impossible to see such lesions in an x-ray or CT scan (white matter hyperintensities are lesions in the brain that show up in an MRI scan as areas of increased brightness when visualized by T2-weighted magnetic resonance, I am told, see also)

Update February 23, 2021:  Nanox is apparently telling people that this video was not supposed to be published.  Unfortunately, Nanox has already shown the stolen images in the past.  Here is Slide 33 from Nanox September 2020 presentation to investors.  What do you see in the lower right corner?  Stolen images.

The individuals behind the Nanox pump

I was referred to a writeup by a self-described stock marker nerd and writer for the The Motley Fool (thanks Nibbler @AuntMinnie).  

While this thing probably deserves a complete reply here, let's just focus on four lines there:

• Ma = brightness
• KvP = speed of electron emission 
• both are positively correlated w/radiation exposure 
• specifically: KvP of 40 & Ma of 1.5 for $NNOX vs. typical levels of 50-60 & 3-5 respectively 

By looking at each of these lines, anyone with basic understanding of how X-rays are generated, detected, and used in diagnostics should immediately realize that the individuals who authored and edited that piece have no idea what they are writing about, or pretend to have no idea.