Micro-X (ASX: MX1) is the latest small cap to benefit commercially from the spreading coronavirus outbreak that is wreaking havoc in China, with the company receiving a large order for its mobile x-ray devices from two Asian countries fighting the virus.
The company entered a trading halt this morning after its share price opened almost 39% higher at $0.215 with investors catching wind of the company’s rocketing sales for its Carestream DRX Revolution Nano technology.
While an early stage diagnosis for coronavirus 2019-nCoV involves a simple blood test, a chest x-ray is used to diagnose the progression and severity of the illness in patients presenting with acute respiratory distress.
The World Health Organisation has outlined the criterion for the coronavirus progressing from confirmed case to a severe illness as a patient showing multi-lobar infiltrates or pulmonary infiltration via chest x-ray.
Under the definition, progression has to have exceeded 50% within 24-48 hours.
Carestream DRX Revolution Nano
Micro-X’s Carestream DRX Revolution Nano is an “ultra-light” digital medical and mobile x-ray system for use in hospitals and healthcare.
The device has regulatory clearance and is sold in a number of markets internationally via Micro-X’s distributor Carestream Health.
What’s spurred Micro-X’s share price upward is an increase in purchase orders from Carestream for the x-ray units.
The purchase orders total about $780,000 with the units to be delivered to two Asian countries and are part of the governments’ response to the mounting coronavirus (renamed COVID-19) epidemic.
According to Micro-X, the new orders require “urgent delivery” and the company has ramped up production of these units to full capacity to fulfil the orders over the following four weeks.
The company noted it was working with supply chain partners to maximise its ability to respond to any future requirements to deliver large orders in a “very short time frame”.
“While these are terrible circumstances with the coronavirus epidemic spreading so quickly, we are pleased that our equipment will soon be able to assist medical teams with their response in affected countries,” Micro-X managing director Peter Rowland said.
“Chest x-rays are a key tool in monitoring the progression of the pneumonia-like symptoms of severe coronavirus infection.”
“Additional x-ray imaging capabilities are being deployed in many countries to meet these needs for the growing number of confirmed coronavirus cases and mobile x-ray imaging units offer a flexibility of use most suited to the requirements of infection control procedures and also the nature of temporary hospital quarantine buildings,” Mr Rowland explained.
The WHO has labelled the coronavirus outbreak a global health emergency, with the coronavirus impacting ASX stocks both negatively and positively.
In WHO’s latest situation report which was published 12 February, there were 45,171 confirmed cases of the virus globally.
Of those 44,730 have been identified in China, with the region also reporting 1,114 deaths from the disease.
Outside of China, there are 441 confirmed cases across 24 countries, with one fatality.
Half year 2020 results
Despite the increase in orders for its x-ray technology, Micro-X’s half year results for the period ending December 2019 revealed a $4.15 million loss, underpinned by a 12.23% fall in revenue for the period of $840,000.
Although there was a loss for the period, it was less than the $6.14 million loss in the previous corresponding period.
Micro-X attributed the loss reduction to a “focused effort” on lowering cash burn.
Following the announcement of increased orders, Micro-X’s share price closed Thursday at $0.20 – up almost 30%.