Daxor Corporation (NYSE:DXR), the global leader in blood volume measurement technology, announces today it issued a corporate update in a Letter to Shareholders filed in its certified shareholder report on form N-CSR on August 30, 2021, from CEO & President, Michael Feldschuh:
Dear Fellow Shareholder:
I have never been more excited about the progress of our company or the prospects for our business in the time ahead. Daxor has been working hard for years as the global leader in blood volume measurement technology to drive sales and adoption of our novel FDA-cleared diagnostic in the healthcare system. The opportunity for our customers is the promise of smart individualized volume care which substantially improves health outcomes for patients and the financial and quality outcomes for hospital systems. 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 new point-of-care blood volume analysis systems, developed under multiple contracts by the US Department of Defense (US DOD), 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 this year will have an option for a novel fluorescing marker as well as a nuclear tracer for use in new care settings beyond our current systems.
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 the first half of 2021 we have made important breakthroughs building on our focus in each of these key areas.
Beginning with financial performance, the Company is pleased to report a 26.5 percent increase in the unaudited revenues of our blood volume diagnostic operating division for the six-month period ended June 30, 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 year-to-date has sold, leased, placed devices for research, or opened new reference lab accounts with eight new clients in addition to focusing on growing business at the existing install base. Many of these new accounts are just beginning to ramp up as they integrate the diagnostic into their treatment protocols.
At June 30, 2021, Daxor had net assets of $14,493,285 or $3.59 per share. For the six-month period ended June 30, 2021, Daxor had net dividend income of $120,878, net realized gains on investment activity of $41,822 There was a net change in the unrealized appreciation on investments, options and securities borrowed of $279,396 as markets improved from the beginning of the recovery from the COVID-19 pandemic. There was a net realized loss from the operating division relating to spend on research, development, sales and overhead of $1,546,987 as the Company continues to invest judiciously in research and development for our 2022 product launch, to ramp 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, has been promoted to Senior Vice President of Commercialization 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. Importantly, Daxor entered into agreements in the first half of this year 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 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. 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.
Equally important is the progress that Daxor has made in the area of clinical outcomes utilizing our blood volume analyzer systems. In May of this year Management announced a landmark grant from the National Institutes of Health (NIH) awarded to Daxor and investigators at the VA Hospital system for a prospective randomized multi-center blood volume trial for the treatment of heart failure (HF) with Daxor's systems. This multi-phase study has already begun and 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 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 enrolled more than 50% of its goal and results are expected later this year. 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.
Other research published in the first half of 2021 was presented at the Society for Critical Care meeting showing the value of blood volume analysis in transfusion practice. Data in the use of blood volume for measuring the impact of salt and volume adjustment to treat postural orthostatic hypertension (POTS) was published in the Journal of the American College of Cardiology, — syncope and POTS are significant additional growth areas for the Company in the future. Previously announced research trials with Duke University in HF treatment and collaborations with Nuwellis Corporation are on track after suffering delays related to COVID last year as conditions at hospitals allowed enrollment to continue.
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 this year 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 an additional four 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 a test 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. The company applied for 6 new patents in 2020 covering aspects of the new system as well as further applications of blood volume measurement and its treatment paradigms. Management anticipates that a similar number of new patents will also be filed in 2021 as R&D accelerates and new technologies are being developed based upon contracts that have been awarded and partnerships with 3rd party technology accelerators have been signed. The Company has added engineering, scientific, and production personnel to accelerate the development of new products at its highly-cost effective Oak Ridge, Tennessee facility instead of out-sourcing to expensive and slower contract research organizations and anticipates that investment in this area will accelerate this fiscal year as we develop highly valuable, patentable technology to drive growth and partnerships in years to come.
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 or 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. 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