Radiology vendor Nanox Imaging cutting 30% of costs in bid to save company
Nanox Imaging on Monday announced plans to slash 25% to 30% of its expenses in a bid to fix the troubled radiology vendor’s finances.
The Israel-based company’s board recently approved the cost-cutting initiative, which also will seek to boost operational efficiencies. Founded in 2018, the vendor offers the Nanox.Arc, a low-cost, 3D multisource digital tomosynthesis system “designed for ease of use and scalability.”
Nanox, has been plagued by troubles in recent months including construction delays, regulatory hurdles and an investor lawsuit, forcing it to seek answers.
“Our objective is to translate Nanox’s technological and clinical progress into measurable commercial performance while strengthening our financial foundation,” CEO and Acting Chairman Erez Meltzer said in a statement Nov. 9. “We remain focused on managing our resources carefully and prioritizing the activities we believe are most important to our business,” he added later.
Nanox said the expense reductions include about $2 million in annual cost savings realized as part of restructuring operations in South Korea. Nanox also plans to reduce other expenses, slash its global workforce and make “other operational adjustments” it sees fit.
“The company expects that, once fully implemented, these measures will reduce its ongoing cash burn,” the announcement says.
Nanox is reviewing further opportunities to cut costs and increase efficiencies. These include potential changes to certain manufacturing and supply chain arrangements, infrastructure expenditures and other operational activities. The scope, timing and implementation of cost-cutting measures remains subject to further evaluation and potentially “any required third party or regulatory consent.”
Along with cutting costs, Nanox plans to focus on accelerating commercialization of its imaging system, strengthening commercial partnerships, and seeking ways to boost financial flexibility. As previously disclosed in October, Nanox has experienced recurring operating losses and negative cash flows from operations. This has led to “substantial doubt” about its ability to continue as a going concern. Nanox also recently disclosed that it's at risk of being booted from the Nasdaq stock exchange, with its share price falling below acceptable thresholds.
“The measures announced today are intended to address…the company's liquidity needs, but there can be no assurance that they will be sufficient to do so,” Nanox said in Monday’s announcement. “The company expects that it will need to obtain additional financing, which may not be available on acceptable terms, or at all.”
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.