Daxor Corporation (NASDAQ:DXR) Q4 2023 Earnings Call Transcript

I think that I’ve received a number of questions from investors we’re concerned that because we have a next-generation system that we’re planning on launching, they were concerned that there would be a slowdown in adoption of our technology as customers waited to upgrade to the new system. We’ve actually seen the exact opposite with a 95.7% year-on-year increase in the first two months of the year. We just actually had our best week of kit sales in last week. So we’re continuing to see stronger growth. We’re also seeing a forecast now where we anticipate being able to breakeven within 12 months from now, we are thinking that, that will be driven by a combination of the continued growth that we’ve been seeing in the adoption of our systems, anticipated revenue from various different contracts that we are aiming to receive.

And of course, the launch of our new system, the new BVA-200 system, which contains a number of very important potential upgrades and will be adopted by customers we anticipate at a much higher rate, more quickly and with a higher rate of utilization. So I’ll go into that system now. So Daxor completed a clinical trial last year at several sites where we did a comparison between lab results from our existing FDA-cleared BVA-100 system and what we have used as an internal designation, the so-called next-generation blood volume analyzer. Those — that clinical trial involved several hundred samples that were drawn from patients in a variety of conditions in real-world hospital situations. And then that was packaged into a 550 page submission to the FDA that was under the so-called 510(k)/CLEA dual waiver application system.

And that’s a system of approval, which involves the submission to show the equivalence between an existing approved system and a proposed system. We were quite pleased with the data that we collected. We had validated this next-generation device with the Department of Defense under contract with them, and we were then happy to do the civilian side validation for our submission. So just to review to everyone, why is this next-generation system so important? What is it? Our existing system is a carousel-based system that sits in the lab typically of a hospital. So the workflow involves the injection of our tracer into the patient, usually at the point of care, collection of blood samples, which are then sent to a lab for processing. And then the results are entered into usually the electronic medical record system of the hospital and then results are reviewed by the clinical care team.

The new system which was developed under contract by the U.S. Department of Defense is a portable, battery operated point-of-care system. It’s about the size of a shoebox. It was designed initially or under the specifications of the U.S. Army to be ruggedized, so that it could be used for forward deployment in Combat Casualty care. But it’s also been made with the civilian market very much in mind. So the new system involves a completely different workflow. It involves that the patient has the pacer injected into them. But as the blood samples are collected, they’re processed immediately at the bedside, and then a result is available to the clinical care team. So why is that so important? Well, under the current system, the workflow can involve waiting for 60 to 90 minutes to receive the results of a test.

If the hospital is using or send out service, it’s actually a 24-hour delay. The new system was shown in our trials to be able to give an initial blood volume result in as quickly as 15 minutes on the bed side, with considerably less effort by the technicians because they don’t have to bring samples back to the lab, etc. And so this is really something that opens up a very broad array of potential users, for example, where timely blood volume measurement is really important. Think about patients in a critical care unit where they want to make a fluid intervention, but they need to make that intervention in a rapid way. It’s something that makes the system more attractive for potential hospitals to take on because of the resources required. The workflow is just much more friendly towards adoption in the hospital system.

So we’re really excited about this. The other thing is that we’re looking for this device to be so-called CLIA waived. The CLIA waiver certification will make adoption of the system and its utilization much more friendly to the hospital systems. We anticipate that with the approval of the system, that there would be potentially significant adoption of that new system, not only at existing customer accounts who would be very attractive to the new workflow and footprint of the system, but it would also open up a large number of accounts at hospitals that have expressed interest in our technology, but would like to see this new workflow that’s available, based upon the speed, the convenience and, of course, its ability to provide timely information that will guide interventions.

Touching on a related area, our R&D. We continue to do further next-generation tracer development into our fluorescent marker also with support by the U.S. military and we have also been filing and receiving patents related to the utilization of blood volume technology. So specifically [indiscernible] has been receiving method patents that are related to the application of blood volume measurement and the guidance of care. We feel that these patents are quite important and will help to protect the valuable IP that the company has been developing for years. We’ve been seeing that there’s also been an important amount of clinical outcomes that have been occurring. We’ve seen over 25 papers and peer-reviewed presentations on blood volume analysis in the past 18 months alone.

And so we’re seeing a very large upsurge of interest in blood volume measure and technology, when I go to the type of society meetings, the Heart Failure Society of America, for example, featured a whole session on blood volume measurement. Last fall, that’s two years ago that they had been doing it. When I go to conferences like the THT conference, which is one of the leading Heart Failure Technology conferences in the world. Again, blood volume keeps coming up again and again with important presentations and acceptance. So we’re seeing that as we’ve had much higher profile on the podium at these events. Key opinion leaders have been bringing the system into their hospitals. There’s just been a much higher profile and recognition for what blood volume analysis can do.