March 18, 2024 admin

Daxor Corporation CEO and President Michael Feldschuh Provides Corporate Update in Letter to Shareholders

Oak Ridge, TN – March 18, 2024 — 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 March 15, 2023 from CEO & President, Michael Feldschuh.

Dear Fellow Shareholder:

“Concentrate all your thoughts upon the work in hand. The sun’s rays do not burn until brought to a focus.” – Alexander Graham Bell

We have never been more focused  on our mission and goals. Every team member at Daxor sees both the remarkable strides the company has made over the past year solidifying its position as the global leader in blood volume measurement technology and the promise of what our rapid expansion means for both the company and the tens of millions of patients whose care we are eager to significantly improve. In every area 2023 and the strong start of 2024 has shown substantial progress for the company — in revenue growth, new customer acquisitions, increasing utilization of our products by existing customers, next generation systems completed and under Food and Drug Administration (FDA) review, positive clinical studies, new patents granted and pending, successful National Institutes of Health (NIH)  grant awards, Department of Defense (DoD) contracts awarded, and further research and development for groundbreaking products set to launch in subsequent fiscal years. I will detail below more in these areas but first wish to review why our company’s mission to commercialize the products that enable optimal patient care is so vital. 

Our Mission: Optimal Blood Volume for All

Daxor 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 long been hampered using proxy or 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 proven 98% accurate  system. Care teams cannot effectively treat what they do not correctly diagnose, so our rapid accurate diagnostic test 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 a shorter length of stay in the hospital, suffer fewer costly readmissions, and have lower mortality and fewer complications overall. This leads to better results for patients, hospitals, and insurers on both a health and economic level.

Financial Strength and Increase in Net Asset Value

As of December 31, 2023, Daxor’s net assets were $34,010,384 or $7.08 per share as compared to $28,969,469, or $6.75 per share on December 31, 2022. The increase in the net asset value is primarily due to the continued appreciation in value in the operating division. The valuation of the operating division increased $6,000,000 to $32,000,000 on December 31, 2023. For the year ended December 31, 2023, Daxor had a net dividend income of $157,378, net realized gains on investment activity of $603,774. There was a net decrease in the unrealized appreciation on investments, options and securities borrowed of $885,199. As we sold positions during 2023, prior period’s significant unrealized gains unwound into the gains for the period. Included in the Net Increase in Net Assets Resulting from Operations of $280,640 is non-cash stock-based compensation expense of $631,701, to provide incentive to employees, officers, agents, and consultants through proprietary interest in the company. There was an investment of $4,552,380 into 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 2024 product launch, ramping the commercial sales teams, as well as production facilities and inventory for our next generation blood volume analyzers.

Unaudited Operating Company Results: Increasing Revenue, Sales, and New Accounts 

• Revenue increased 31.8% Year on Year for 2023 versus 2022
• Revenue in the first 2 months of 2024 has increased 220% Year on Year versus 2023
• Number of Kit sold for our Diagnostic System rose 36.2% Year on Year for 2023 versus 2022
• Kit revenue in the first 2 months of 2024 has increased 95.7% Year on Year versus 2023
• 12 New Accounts launched in 2023, with a combination of sales, rentals, and ezBVA Lab services
• 6 New Accounts launched in the first 2 months of 2024, with a combination of sales, lease, and ezBVA Lab services 
• New pricing for kits of $460 per dose starting in March of 2024
• The operating company increased revenues from the second half of 2023 through additional contracts from the DoD, receiving a 2 year, $1.1M contract and is under consideration for an additional $2.5M of contracts by end of Q2 2024
• Management forecasts break-even for the operating company within 12 months if anticipated next gen units are cleared by FDA for sale, new contracts, and sales growth continues

Contributing to growth was the launch in June of 2023 of Daxor’s ezBVA Lab service for clinical sites that wish to perform blood volume analysis (BVA) testing utilizing the Company’s lab services for samples collected 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 test kits which sold for $385. In addition, this new service has helped to accelerate the opening of new accounts and increased the rate of revenue growth as well. As the statistics show, 2024 is off to an even faster pace of growth on all fronts as we see an acceleration of adoption and use of systems even prior to the launch of our next generation systems.

Next Generation Blood Volume Analyzer System

Daxor completed a multi-center study to validate its next generation blood volume analyzer in Q4 of 2023 and submitted it for review with the FDA at year-end under a 510(k)/Clinical Laboratory Improvements Amendments (CLIA) – waiver dual submission pathway. This point-of-care blood volume analysis system, developed under multiple contracts with the DoD, as well as grants from the NIH, is a significant leap forward in our market-leading technology allowing for a blood volume determination at the bedside in as little as 15-minutes. This new system has been validated in our study to be three times faster, simpler, battery powered and capable of being a full point-of-care CLIA-waived device. 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 management that can broadly change medicine and find acceptance into workflows at a much greater level than our current lab-based system.

Management anticipates that upon approval there will be significant interest and uptake of the new systems based upon preliminary discussions with clinicians helping to develop the technology, as well as an increase in disposable kit sales driven by the speed and convenience of the new system. The speed and convenience of the new system will open additional points of use in the hospital and outpatient setting. Indications such as critical care, where the speed of results is paramount, should see significant growth as a result. 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.

Further Research, Patents, and Clinical Outcomes

Equally important is the progress that Daxor has made in clinical outcomes utilizing our blood volume analyzer. In Q2 2024 the results of a pilot Randomized Control Trial (RCT) in heart failure patients with BVA guided treatment were published in the prestigious Journal of the American College of Cardiology 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 because of their findings. In Q3 2024 a Phase I RCT from two Veterans Administration hospitals under NIH funding reported comparable results to the Duke trial – that 70% of patients’ total volume or red cell volume was misdiagnosed absent a BVA test. These results are additional objective evidence of the scale of the problem that BVA can solve. 

Since the start of 2023, over a dozen new research studies on BVA have been published in peer-reviewed journals or at society conferences. These studies importantly highlighted that BVA can reduce hospital length of stay by 2.6 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. Regarding 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 were led by Key Opinion Leaders comparing volume versus pressure measures, representing the growing awareness and substantial need for BVA as an innovative diagnostic to improve heart failure care. Management is pleased at the strong and growing reception that our technology is receiving at these events in special sessions that are not sponsored by Daxor in any way.

Daxor has also received two patents in the past quarter relating to the use of BVA to guide care and has several more patents pending. The family of patents relating the use of BVA and integrating it for optimal care is a focus of the company to add value to and protect our innovation. The company also has an active R&D effort including next-generation tracer technology which has been recognized by the NIH and is now supported by its Catalyze Program offering non-dilutive support for its development. 

In Memoriam

It is with a heavy heart that I must report that Mr. Jim Lombard, a director of the Company who served on the board of directors for over twenty years, passed away at the age of 89 last October.  Mr. Lombard was smart, dedicated, affable, and quick with a story or recollection to give perspective on the issues at hand before the board.He will be missed, we thank him for his contributions to our mission to improve the lives of patients everywhere and send our condolences to his family.

Summary 

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 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 acquisitions of our BVA technology by customers.

For more information, please visit our website www.daxor.com. Sign up to receive news on Daxor’s innovative technology and investor announcements at www.daxor.com/investors.

Cordially Yours,

Michael Feldschuh

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.

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 Shapiro
Sr. Managing Partner, CORE IR
1-516-222-2560
brets@coreir.com