Oak Ridge, TN – August 28, 2023 – 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.
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CEO 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.
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:
Sr. Managing Partner, CORE IR