Daxor Corporation (Nasdaq: DXR), the global leader in blood volume
measurement technology, today issued a corporate update in a Letter
to Shareholders filed in its six-month shareholder report on Form
N-CSR on August 28, 2023 from CEO and President, Michael Feldschuh.
Dear Fellow Shareholders:
There are rare times in a business when multiple
efforts converge leading to opportunity that is greater than the
sum of its parts. For Daxor, now is just such a time. The company
is focused on profoundly improving outcomes for tens of millions of
patients as well as the hospital systems and the payers which
support the system by solving a central problem of medicine –
providing highly accurate, convenient, and rapid knowledge of
patient blood volume. Managing blood volume is the cornerstone of
care for some of the largest areas of patient care – heart failure,
sepsis, post-surgical blood loss and syncope to cite a few, but
this urgent medical need has been hampered by using surrogate
markers, not direct measurement, of the blood volume. Many of these
markers are costly, some are invasive, and none are accurate – in
contrast to Daxor’s 98% accurate system. Care teams cannot
effectively treat what they do not correctly diagnose, so a rapid
accurate diagnostic is a game-changer. Every metric that matters is
impacted from this first principle of accurate diagnosis – patients
receiving optimal care are treated more quickly with better
outcomes, have shorter lengths of stay in the hospital, suffer
fewer costly readmissions, and have lower mortality and fewer
complications in the long run. This leads to better results for
patients, hospitals, and insurers on both a health and economic
level.
So, what is the convergence of efforts that has
Daxor Management so excited? A new portable point-of-care analyzer
capable of giving blood volume results in as little as 15 minutes
at the patient bedside to replace the lab-based BVA-100® (Blood
Volume Analyzer) in current use, compelling new clinical and health
economic outcomes, additional funding from the U.S. Department of
Defense (DoD) and National Institutes of Health (NIH) for further
technology development and clinical trials, and partnerships with
medical societies and key opinion leaders to shape the discourse
and guidelines on the need for direct blood volume analysis to
become the standard of care. These efforts are happening as Daxor
continues to expand its commercial adoption among leading academic
medical centers with innovations such as our new reference lab
service and growth of our intellectual property (IP) portfolio with
more than half a dozen patents pending. It is the convergence of
these efforts leading to the growing awareness that one of the
thorniest problems in medicine has a new solution which is a
paradigm shift benefiting all parts of the healthcare system.
It is my pleasure to report on Daxor’s results
for the mid-year ended June 30, 2023. For the fourth year in a row
our operating business is experiencing continued growth and
development — increasing revenues from commercialization, great
progress in research and development for our next-generation
systems set for potential approval at the end of this year, and a
growing body of clinical evidence from leading research centers of
the unique value of our diagnostic to save lives and vastly improve
patient health and hospital economic outcomes. The opportunity for
our business is to scale into the total serviceable market of more
than ten million tests per year in the United States alone through
organic growth, partnership, and joint ventures.
I have written in the past that to realize that
promise and the enormous market potential for our products requires
the company to execute on three key areas of performance: strong
commercialization, next-generation product development, and
continued clinical outcomes. I am pleased to report that in 2023 we
continue building on our focus in each of these key areas.
As of June 30, 2023, Daxor’s net assets were
$30,359,013 or $6.33 per share as compared to $28,969,469, or $6.75
per share on December 31, 2022. This increase in net assets is
primarily due to the public offering during the six-month period
ended June 30, 2023, whereby Daxor raised $4.1 million net to Daxor
by selling 464,599 shares at $9.75. The net asset value per share
was adjusted to account for the addition of 464,599 shares to the
float of the stock. For the six-month period ended June 30, 2023,
Daxor had net dividend income of $77,990, and net realized gains on
investment activity of $603,661. There was a net decrease in the
unrealized appreciation on investments, of $760,280 as we sold
positions during 2023 and prior period’s significant unrealized
gains unwound into the gains for the period. Included in the Net
Decrease in Net Assets Resulting from Operations of $3,037,182 is
non-cash stock-based compensation expense of $324,273 in an effort
to provide incentive to employees, officers, agents, and
consultants through proprietary interest in the company. There was
a net realized loss of $2,445,170 from the operating division
relating to spending on research, development, sales and overhead
as the Company continues to invest judiciously in research and
development for our 2023 product launch, ramping the commercial
sales teams, as well as production facilities for our next
generation blood volume analyzers.
Focusing further on the operating division
financial performance, the Company is pleased to report a 20.64
percent increase in the unaudited revenues of our single-use test
kits for the six-month period ended June 30, 2023, as compared to
the six-month period ended June 30, 2022. Revenue growth was driven
by a combination of the sale and leasing of our capital equipment
to hospitals and orders for our single-use blood volume diagnostics
kits for heart failure management, critical care use, among other
indications. Daxor added eight new accounts during the six-month
period ended June 30, 2023. Many of these new accounts are just
beginning to ramp up as they integrate our diagnostic into their
treatment protocols, and the need for our product has never been
greater – heart failure patients are set to rise from the current 6
million to more than 8 million in the next six years as the baby
boom generation ages, and hospitals are under increasing pressure
to improve outcomes and contain costs.
In June of this year Daxor launched its new
ezBVA Lab service for clinical sites that wish to perform BVA
testing using Daxor’s lab services without the need for an on-site
analyzer. This new service, priced at $965 per test, represents a
significant value for customers and is a premium to the sale of a
test kit which sells for $385. The company is paid for performing
the lab analysis and the customer requires little overhead and
reduced labor to administer the test. This new service has a
building pipeline of customers in the on-boarding process, and
management anticipates signing new customers at a rate of
approximately one a month going forward given the initial demand
for the product. This effort has a faster sales cycle and has
attractive margins for the company and is complementary to the
launch of our next generation analyzer which management anticipates
being priced at a similar level per test. Increasing the value of
our offerings and the associated revenue is a priority for the
company to drive growth in both absolute terms and on a profit per
unit sold metric.
Daxor anticipates submission and review by the
FDA of its next generation analyzer under a 510-K/CLIA dual
submission pathway by the end of this year. Validation has been
underway at several sites since Q1, and the study has been
proceeding according to plan although enrollment at some centers
has been slower than Management initially anticipated. This
point-of-care blood volume analysis system, developed under
multiple contracts with the U.S. DoD, as well as grants from the
NIH, is a significant leap forward in our market-leading
technology. Daxor developed the new analyzer under contract with
the U.S. DoD in 2022, and successfully demonstrated a
manufacture-ready prototype that was specified to be equivalent to
the current 510(k) cleared BVA-100 unit in terms of accuracy and
capabilities. This new system has been measured to be three times
faster, simpler, battery powered and capable of being a full
point-of-care CLIA-waived device. Our development for a model
utilizing a novel fluorescent marker is also ongoing under U.S. DoD
contract for use in new care settings beyond our current systems.
Daxor met with the FDA in the fall of 2022 to discuss its
pre-submission data for a 510(k)/CLIA dual pathway. Management was
able to ask questions and receive guidance from the agency on a
validation plan and application pathway to satisfy regulatory
requirements. Daxor is currently executing the validation of the
prototype system with clinical partners to satisfy FDA standards
and intends to submit its application with a goal of receiving
approval by the end of 2023. Driving this important project is our
Vice President of Development and Operations, Linda Cooper - a
seasoned professional with a background in bioengineering as well
as extensive regulatory experience with the FDA. For us, it is no
exaggeration that this next generation analyzer is our most
important product launch in twenty years and has the potential to
deliver a level of speed, access, and accuracy to fluid and blood
volume management that can broadly change medicine.
Management anticipates that upon approval there
will be significant interest and uptake of the new system based
upon preliminary discussions with clinicians advising Daxor in the
development of the technology as well as an increase in disposable
kit sales driven by the speed and convenience of the new system.
Daxor’s next generation devices will also be eligible for Phase III
funding awards and acquisition by branches of the military for
their deployment to aid in combat casualty care as well as further
development contracts.
Daxor recently received and is executing a new
$1.1 million contract from the U.S. DoD for additional capabilities
to its next-generation analyzer this year. This two-year contract
is just one of several pending applications for contract work with
the U.S. DoD, in addition to grant proposals for substantial
research studies under review with agencies at the NIH. These
contracts provide important sources of non-dilutive funding,
further technology development, and additional clinical validation
which drives broader adoption of our diagnostic. Management
anticipates announcing the results of several of these efforts in
Q3 and will continue to build upon successful Phase I funded
efforts toward the larger Phase II awards which commonly
follow.
Equally important is the progress that Daxor has
made in the area of clinical outcomes utilizing our blood volume
analyzer. In Q2 the results of a pilot Randomized Control Trial
(RCT) in heart failure patients with BVA guided treatment was
published in the prestigious Journal of the American College of
Cardiology-Heart Failure by researchers from the Duke Clinical
Research Institute. This RCT documented that an astonishing 68% of
heart failure patients were misdiagnosed regarding their volume
status and that care teams were ineffective at adjusting these
derangements prior to discharge. The researchers citing the
outcomes called for funding of a large-scale trial centered around
BVA technology based upon their findings. This trial is in addition
to Phase I RCT work at two Veterans Administration hospitals under
NIH funding which completed enrollment in Q2 and will report its
findings shortly as a prelude to making an anticipated Phase II
application. In the first half of 2023, over half a dozen new
research studies on BVA were published in peer-reviewed journals or
at society conferences. Importantly, these studies highlighted that
BVA can reduce hospital length of stay by 2.5 days on average for
heart failure patients, a significant savings, while also improving
clinical outcomes. Data on the value of BVA for use in Left
Ventricular Assist Device (LVAD) patients and its superiority to
pressure-based cardiac implantable devices are also highlights of
data that researchers from a variety of institutions published.
About recognition and awareness of these developments, a landmark
session at the Heart Failure Society of America in 2023 marks the
second year in a row that the Annual Meeting will focus on blood
volume measurement to improve heart failure care. Last year’s
meeting was attended by hundreds of physicians which posited that
Daxor's BVA provided uniquely valuable data for congestion
management, superior utility to existing standards of care of
pressure-based measures, and that further study and adoption of it
was supported by the growing body of evidence. Sessions of this
nature led by key opinion leaders - comparing volume versus
pressure measures - represents the growing awareness and
substantial need for BVA as an innovative diagnostic to improve
heart failure care. Management is incredibly pleased at the strong
and growing reception that our technology is receiving at these
events at special sessions that are not sponsored by Daxor in any
way.
The Company also announced in August 2021 that a
promising research letter on the use of Daxor’s BVA-100 analyzer on
six COVID-19 patients at NYU Medical Center had been published in
the prestigious Journal of Critical Care. Daxor launched a
prospective multi-center trial on the back of that data which has
been expanded to incorporate not only COVID patients but sepsis
patients as well. The COVID arm has completed enrollment and the
sepsis comparator arm also completed enrollment at the end of Q2.
We anticipate publication to follow shortly, and Management looks
forward to sharing the results of the multi-center trial when they
become available. Sepsis is a leading cause of death in hospitals
and an intense area of focus for health system improvements. All
data shows that individualized fluid management holds the key to
improving outcomes, something that BVA can uniquely do compared to
the existing surrogate markers. A substantial expansion of the
Company's revenue in critical care medicine could be driven by a
combination of the new data, new funding opportunities the data
will open, as well as our next-generation analyzer which promises a
speedy workflow which is critical to the needs of this
specialty.
The strong trend of healthcare is toward
individualized care and cost-effectiveness. Our BVA diagnostic is a
non-invasive, inexpensive, and rapid blood test which allows care
teams to solve the significant challenge of accurately managing the
fluid levels of patients, whether it is in the heart failure clinic
(outpatient) or the hospitalized heart failure patient or in the
ICU, and studies published and presented are proving just how
exciting the potential for this approach is. Reducing mortality,
lowering complications, reducing hospital resource use and length
of stay with a non-invasive and 98% accurate test is achievable
with our patented technology. In the competitive area of
healthcare, having achieved reimbursement for our technology for
both inpatient and outpatient use is a strong competitive advantage
that will drive BVA adoption in step with our increasing clinical
evidence and commercial teams. Just as exciting is the next
generation of products that are in our development pipeline slated
for completion this year which should further enhance the
accessibility of our test and open it up to both government as well
as civilian hospital systems on an international scale.
Daxor has been reporting as an investment
company under the Investment Company Act of 1940 since January 1,
2012. See the Notes to the Financial Statements of Form N-CSR for
further information on Daxor’s strategies and goals regarding its
investments in publicly traded securities to help fund its
diagnostic operations. Because of its significant holding of
publicly traded securities, the SEC currently classifies Daxor as a
closed-end investment management company with a fully owned medical
operating division; however, the primary focus of management is on
our operational objectives. Daxor anticipates that as the value of
the operating company continues to increase as a percentage of
assets owned, it will be eligible to file under its previous
designation as an operating company and report as an operating
company and will take steps to accomplish this result.
Any shareholder who is interested in learning
more about our medical instrumentation and biotechnology operations
should visit our website at www.daxor.com or contact our
investor relations representative Bret Shapiro of CORE IR at
516-222-2560 for more detailed information. We periodically issue
press releases regarding research reports and placements of the
BVA-100 Blood Volume Analyzer in hospitals.
To sign up for electronic delivery of
shareholder reports and prospectuses, please send an email to
info@daxor.com. If you do not hold your account directly with
Daxor, please contact the firm that holds your account about
electronic delivery.
Cordially Yours,
Michael FeldschuhCEO and President
About Daxor
Corporation
Daxor Corporation (Nasdaq: DXR), is the global
leader in blood volume measurement technology focused on blood
volume testing innovation. We developed and market the BVA-100®
(Blood Volume Analyzer), the only diagnostic blood test cleared by
the FDA to provide safe, accurate, objective quantification of
blood volume status and composition compared to patient-specific
norms. Over 65,000+ tests have been performed at leading hospital
centers across the U.S., enhancing hospital performance metrics in
a broad range of surgical and medical conditions, including
significantly reducing mortality and readmissions in heart failure
and critical care. Daxor has several ongoing trials in the areas of
heart failure treatment with support from the NIH and is under
contract developing analyzers to improve combat casualty care with
the U.S. Department of Defense. Daxor's mission is to advance
healthcare by enabling optimal fluid management with blood volume
analysis. Daxor’s vision is optimal blood volume for all. For more
information, please visit our website at Daxor.com. Sign up to
receive news on Daxor’s innovative technology HERE.
Forward-Looking Statements
Certain statements in this release may include
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including without
limitation, statements regarding the impact of hiring sales staff
and expansion of our distribution channels. Forward-looking
statements are predictions, projections and other statements about
future events that are based on current expectations and
assumptions and, as a result, are subject to risks and
uncertainties. Many factors could cause actual future events to
differ materially from the forward-looking statements in this
release, including, without limitation, those risk associated with
our post-market clinical data collection activities, benefits of
our products to patients, our expectations with respect to product
development and commercialization efforts, our ability to increase
market and physician acceptance of our products, potentially
competitive product offerings, intellectual property protection,
FDA regulatory actions, our ability to integrate acquired
businesses, our expectations regarding anticipated synergies with
and benefits from acquired businesses, and additional other risks
and uncertainties described in our filings with the SEC.
Forward-looking statements speak only as of the date when made.
Daxor does not assume any obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
Investor Relations Contact:
Bret ShapiroSr. Managing Partner, CORE
IR1-516-222-2560brets@coreir.com
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