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X-Ray Startup Enlists Chipmaker to Disrupt Century-Old Industry

(Bloomberg) — Nano-X Imaging Ltd., a startup founded by Israeli investor Ran Poliakine, is joining forces with South Korean chipmaker SK Hynix Inc. to build a machine that could disrupt a century-old X-ray industry.

Valued at about $2 billion after listing on Nasdaq last month, Nano-X is seeking to transform a multi-billion-dollar industry that has essentially relied on the same technology since Nobel prize winner Wilhelm Roentgen discovered X-rays in the late-19th century. Nano-X’s device uses semiconductors instead of metal filaments to generate X-rays.

The backing of SK Hynix, the world’s second largest maker of memory chips, is a boost for an eight-year-old outfit that hasn’t quite established its tech bona fides yet. It also reflects growing technology cooperation between Israel and South Korea, two nations that have helped shape the global economy by advancing innovations and taking big risks.

Nano-X stock has more than doubled in the weeks since its listing, even before it has revenue or regulatory approvals. That speaks to market excitement about the company, but has fanned skepticism among people who’ve seen companies like Theranos Inc. fall apart when their visions weren’t fulfilled.

“I realize there are skeptics,” Poliakine said in an interview at the Seoul office of private-equity backer The Yozma Group. “This is a promise, but it wouldn’t have been a promise if there were not a huge risk.”

Disruptive Potential

At the heart of that promise is a donut-shaped scanner dubbed Nanox.ARC, which uses semiconductors to digitally calibrate the intensity of beams to capture layers of human organs instantly, without having to reach intense temperatures or rotate like a conventional CT scanner, according to the company.

Nano-X says its devices not only generate less radiation but also cost a fraction of the cost to manufacture because they do away with large cooling systems and other bulky components. The devices will be given away if clients agree to a pay-per-scan plan.

If it really can reduce radiation, improve images and provide access for more patients, while saving money for doctors, the machine has the potential to be “very disruptive,” said David Smith, associate professor of clinical radiology at LSU Health Sciences Center & University Medical Center in New Orleans. “If it fails in any of those things, it may not be disruptive, but it may fill in a niche market.”

With much of the world lacking access to diagnostic imaging, Nano-X says it has deals to supply some 4,500 units in more than a dozen countries, and plans mass production with the help of iPhone manufacturer Foxconn Technology Group.

Its success heavily depends on securing regulatory approval from each nation where it operates, including the U.S. Food and Drug Administration, which this year has been focused on the fight against the coronavirus pandemic.

The company has submitted applications for FDA approval, a process expected to take months. Poliakine, who previously founded Powermat Technologies Ltd., said he’s “very confident” Nanox will get such clearance.

Smaller Clinics

Nano-X targets “neighborhood clinics” such as urgent-care centers found across the U.S., rather than the high-end CT-scan market, he said. Those smaller facilities cater to patients with broken bones, internal bleeding or other illnesses requiring immediate care, but often can’t afford the kind of scanning devices that bigger hospitals have.

“They don’t have the equipment, money, and there’s not enough data or algorithms to sort out the noise from signals,” Poliakine said. The clinics will consult with Nano-X radiologists via the cloud, “so it’s a win-win.”

Images could even be scanned in ambulances or helicopters, but that would require high-speed wireless connections, which SK Telecom Co., South Korea’s biggest carrier, seeks to support.

The Seoul-based firm has invested $23 million in Nano-X and seeks to provide some of the artificial-intelligence technology that would analyze medical images and reduce the chance of mis-diagnosis. Applications could go beyond medicine, helping enable more thorough inspections in South Korea’s manufacturing industries, said Irene Kim, a spokeswoman for SK Telecom.

SK Telecom’s subsidiary, SK Hynix, is supporting Nano-X in enhancing the nano-technology behind the semiconductors. Poliakine visited South Korea this month to explore a site for a joint chip-fabrication plant.

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