Oak Ridge, TN – March 1, 2022 – 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 certified shareholder report on Form N-CSR on February 28, 2022 from CEO & President, Michael Feldschuh.
Dear Fellow Shareholder:
It is not every day you get to walk into Times Square in New York City and see your face and company logo on a billboard 120 feet tall — so on February 4th of this year, when Nasdaq welcomed Daxor to its exchange, it was a moment marking great achievement and progress for our company. We were honored to ring the opening bell, be shown on financial cable news across the world, and be interviewed by the media. I encourage shareholders to go to our website shareholder section to see links to interviews with the Nasdaq and other sources who covered our arrival and profiled our business prospects. We now trade on the exchange known for hosting the most innovative and disruptive technology and medical diagnostic companies in the world and as our market cap grows will be eligible for inclusion in indexes that track Nasdaq med-tech stocks. Daxor is transforming how fluid is managed in several areas including heart failure and critical care and our move to this exchange cements our commitment to innovative disruptive change for the better to our healthcare system. We were joined by Joy Goudie, Esq. from our Board of Directors, our senior executive leadership team, and Daxor team members and family as we marked the next exciting phase of our company’s journey.
It is my pleasure to report on Daxor’s full year results for 2021. Our net asset value (NAV) has risen strongly, and the operating business is experiencing exciting growth and development – increasing revenues from commercialization, great progress in research and development for our next-generation systems set to launch 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 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. In 2022 Daxor plans on launching its program of new point-of-care blood volume analysis systems, developed under multiple contracts with the US Department of Defense (US DOD) as well as grants from the National Institutes of Health (NIH), a significant leap forward in our market-leading technology and the most important product launch in 20 years for the company. Our new systems are planned to be three times faster, simpler, and as announced in March of 2021 will include a model utilizing a novel fluorescent marker as well as a model with a nuclear tracer for use in new care settings beyond our current systems.
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 2021 we made important breakthroughs building on our focus in each of these key areas.
Beginning with financial performance, the Company is pleased to report a 70.6 percent increase in the unaudited revenues of our blood volume diagnostic operating division for the year ended December 31, 2021, as compared to the same period in the prior year. 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, as well as other indications. Additionally, revenue accrued from the US DOD orders as well as third-party companies contracting with Daxor to conduct blood volume analysis on their products. As of this date, the Company for 2021 has sold, leased, placed devices for research, or opened new reference lab accounts with eleven new clients and has installed or has orders to install an additional five accounts in Q1 of 2022. Many of these new accounts are just beginning to ramp up as they integrate the 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
The increase in our business has driven a substantial rise in the net asset value or our shares. As of December 31, 2021, Daxor’s net assets increased 34.7% to $21,152,719 or $5.24 per share as compared to $15,675,186, or $3.89 per share at December 31, 2020. The valuation of the Operating Division increased by 87.5% to $16,500,00 at December 31, 2021 as compared to $8,800,000 at December 31, 2020. For the year ended December 31, 2021, Daxor had net dividend income of $267,066, net realized gains on investment activity of $72,083. There was also a net increase in the unrealized appreciation on investments, options and securities borrowed of $755,960 as markets improved from the beginning of the recovery from the COVID-19 pandemic. Included in the Net Increase in Net Assets Resulting from Operations of $4,748,197 is non-cash stock-based compensation expense of $729,336, 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 $2,965,345 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 2022 product launch, ramping the commercial sales teams, as well as production facilities for our next generation blood volume analyzers.
Accelerating commercialization is a priority for Company management, and in this area Jean Oertel was promoted to Senior Vice President of Commercialization in 2021 in recognition of the strong program to build our sales organization. Jean, a veteran from both Medtronic and Sensionics, has focused on recruiting top talent to the sales and clinical support team and has added eight new territory managers/clinical support reps to the team to support the strong growth in accounts. Importantly, Daxor entered into agreements in the first half of 2021 with two distributors to amplify the reach of our products at hospitals not covered by Daxor’s own reps. Management anticipates that there will be a sales force of over 50 composed of Daxor’s territory managers, clinical support team, and third-party distributor reps backed by Daxor’s internal marketing team for 2022 helping to drive growth. The Company has never had a capability of this size before, and the highly efficient hybrid internal team/distributor model allows us to scale without the capital investment and overhead that such a large sales force would otherwise entail.
The company has also been gaining expertise with new additions to the Board of Directors (BOD) as well. Joy Goudie, Esq., a deeply experienced Senior Patent Counsel with an advanced degree in chemistry who is a partner at Wissing Miller, LLP was joined by Caleb DesRosiers, Esq., MPA on the BOD. Mr. DesRosiers is a veteran of CMS as well as Pfizer and Roche focusing on payment-policy advocacy and is a recognized expert in the field of payer strategies. Management is grateful for their contributions along with the other accomplished independent directors in overseeing the company and providing their feedback on strategic matters.
Equally important is the progress that Daxor has made in the area of clinical outcomes utilizing our blood volume analyzer systems. Institutional Review Board (IRB) approval has been granted and enrollment is underway for two studies of heart failure management (in-patient and outpatient) announced in May 2021 backed by landmark grants from the National Institutes of Health (NIH). Investigators at the Geisinger Medical system and investigators at the VA Hospital system are carrying out the studies. The VA trial of a prospective randomized multicenter blood volume trial for the treatment of heart failure (HF) with Daxor’s systems is supported by a clinical decision support system for which Daxor received a landmark method patent in January of 2022. This multi-phase study will add to the significant evidence of the impact of blood volume guided care in reducing HF readmissions and mortality. Receiving funding from the NIH and partnering with the VA system is just one of the many ways that Daxor is advancing its business in a capital-efficient and effective manner. These grants are extremely competitive, and Management sees this award as significant validation of its technology and blood volume’s clinical significance.
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’s prospective multi-center trial has completed enrollment and results are expected to be published shortly. The research letter showed a strong need for the BVA-100 to help manage COVID-19 optimally, Management looks forward to sharing the results of the multi-center trial when they become available. One thing we as a society have learned is that COVID-19 and its variants are here for the foreseeable future, and that neither universal vaccination nor social distancing will end the pandemic. If a more deadly and transmissible variant were to emerge, understanding how BVA can reduce mortality in critically ill patients would be urgent. We believe new data will demonstrate the value of our diagnostic in the process.
In addition to Daxor being awarded a novel patent for optimal fluid management metrics, new patents were filed in 2021 and the company has over half a dozen innovative patents pending. Management expects that a similar number of patents will be filed this year as research in our labs has been very promising in new and innovative areas of blood volume analysis. The IP strategy of the company has become more active in the past three years as we have added half a dozen researchers, many with PhDs and significant industry experience to our R&D department in Oak Ridge, TN. Our fully owned 20,000 square foot research and production facility achieved the valuable ISO 13485 certification in February of 2021 and provides a highly efficient center for both R&D and production. Management decided to move company headquarters from New York City to Tennessee in July of 2021 which has provided focus for the company and resulted in an annualized savings of more than $250,000 per year to be channeled into further funding for our research and commercialization. The decision to leave NYC after 30 years in the Empire State Building was highlighted in a New York Times article which featured companies that found innovative ways to adapt to the pandemic and adopt more efficient practices as a result.
2021 was another very active and successful year for new research publications highlighting the value and effectiveness of Daxor’s BVA technology to diagnose and improve outcomes in a variety of areas. 10 new studies were published in peer-reviewed journals or presented at juried conferences including data presented at the Society for Critical Care Medicine, the Heart Failure Society, The American Heart Association meeting and publication in the Journal of the American College of Cardiology.
The third area of focus of the company has been the vital research and development of next generation Blood Volume Analyzers (BVA). In March of 2021 Daxor announced that the US DOD had awarded an additional $750,000 contract for BVA systems for both military and civilian use utilizing a novel patent-pending fluorescent tracer under development by Daxor since 2018. The US DOD and the Center for Advancing Point of Care Technology (funded by NIH) have awarded the Company a total of additional five contract awards for Daxor’s next generation blood volume analyzer. The next generation device is designed to be portable, three times faster, simpler, and able to operate in areas where tests requiring a lab to analyze results is just not practical. Daxor was awarded these highly competitive contracts on the basis of its proposals showing not only revolutionary technology but also our ability to successfully develop and commercialize diagnostics in this area where the company has over 40 years of experience as the global leader in Blood Volume analysis technology.
Management anticipates that there will be significant interest and uptake of the new systems based upon preliminary discussions with clinicians helping to develop the technology. 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.
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 our 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 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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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 first 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 60,000+ 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 multicenter trials in the areas of COVID-19 and 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.
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