Daxor Corporation Q4 FY2023 earnings call

Company Update - This is an exciting time for Daxor with multiple converging factors. - Strong revenue growth seen, with kit sales rising by 437.4% between second half of 2022 and second half of 2023. - Test kit price was $385 per kit in 2023 and increased to $460 per test starting March 1, 2024. - Introduced ezBVA lab in 2023 priced at $965 per test, with increasing uptick. - First two months of 2024 saw over 95% increase in kits sold. - Added 12 new hospital accounts in 2023 and 6 new accounts in first two months of 2024. - Submitted next-generation blood volume analyzer for 510(k) approval process in Q4 2023. - Received new patents and contract awards from DoD. - Completed clinical trial for next-generation analyzer, submitted 550-page submission to FDA under 510(k)/CLEA dual waiver application system. - Next-generation system is a portable, battery-operated point-of-care system with faster workflow. - Continues R&D on next-generation tracer and files patents related to blood volume technology. - Over 25 papers and peer-reviewed presentations on blood volume analysis in past 18 months. - Announced acquisition of exclusive worldwide rights to manufacture Volumex and Megatope from Iso-Tex Pharmaceuticals, also acquiring Glofil. Will manufacture these in-house at existing Oak Ridge, Tennessee facility with no substantial additional capital investment needed. The acquisition is expected to be cash flow accretive from the first month.

For the year ended December 31, 2023, Daxor's net assets increased 17.4% to $34,103,84 or $7.08 per share compared to $28,969,469 or $6.75 per share at December 31, 2022. The valuation of the operating division increased $6 million to $32 million at December 31, 2023 from $26 million at December 31, 2022. In 2023, 464,599 Daxor treasury shares were sold at $9.75. Net dividend income was $157,378. Net realized gains on investment activity were $603,774. There was a net decrease in the unrealized depreciation on investments of $885,199. Included in the net increase in net assets resulting from operations of $280,640 is a non-cash stock-based compensation expense of $631,701. Daxor invested $4,552,380 in the operating division.

Guidance - Anticipates breakeven within 12 months from now, driven by continued growth in adoption of existing systems, anticipated revenue from contracts, and launch of new BVA-200 system. - If FDA approval of the new system is received sooner rather than later, it could accelerate the timeline to breakeven and profitability.

Risks - Uncertainty around FDA approval timeline for the next-generation blood volume analyzer. - Potential challenges in scaling up production and market adoption of new products.

Q: What is the revenue anticipated from the Glofil product?

A: The revenue from Glofil is expected to serve to pay almost entirely for the acquisition of the products themselves, and the margin improvement will help fund the acquisition. It has potential to be substantially larger as Iso-Tex currently has no salespeople or marketing effort behind it.

Q: Will Daxor be the sole source provider for the acquired products and discuss competitive landscape?

A: Daxor has the only FDA-cleared product measuring blood volume directly. For Glofil, it's the most accurate and convenient among existing products in that space, well positioned for cross-selling.

Q: What costs will be incurred to bring the acquired capabilities in-house over next six to nine months?

A: Will manufacture products in existing facility with few additional headcount, and costs will be offset by savings from not buying from third-party.

Q: Does Glofil contain radioactive component and fit with non-isotopic tracer strategy?

A: Glofil is a very mild radio isotope, has reimbursement in place, and Daxor continues to work on non-isotopic tracer with NIH funding.

Q: Will Daxor become a reporting company?

A: Been in touch with SEC, attorneys regularly engage, continue to hope to transition back to 34 ACT reporting company as revenue increases.

Q: If FDA approves next-generation device, will revenue exceed $10 million a year?

A: Not released pricing yet for next-generation analyzer. Forecast of breakeven is based on existing system utilization, contracts, and grants, not predicated on specific approval date, but sooner approval helps accelerate timeline.

Q: Reason for tax involved in investing in stocks and focus on BVA business?

A: Company has long history in lab services, invested retained earnings in securities, SEC wanted visibility, management intensely focused on operating business and creating shareholder value.

Q: What milestones for DoD funding?

A: Anticipate news on DoD contracts in next four to eight weeks, no additional work needed on past contracts.

Q: How much quarterly revenue run rate needed to reach breakeven and relation to FDA approval?

A: Forecast based on existing system utilization, contracts, grants, not predicated on specific approval date of next-generation system, but sooner approval helps accelerate timeline.

Q: Reason Iso-Tex sold products to Daxor?

A: Opportunistic moment, generational transfer at Iso-Tex, Daxor natural acquirer.

Q: Cash burn rate and anticipation of breakeven?

A: Cash burn shrinking with increasing revenues, anticipate breakeven within 12 months, timing dependent on FDA and customer pipeline.

Q: Increase in kit revenue rate due to new accounts or existing customers?

A: Combination of increased utilization from existing customers (due to customer education, grand rounds) and adding new accounts.

Q: U.S. Army waiting for FDA approval to purchase newest BVA?

A: U.S. Army generally purchases FDA-approved products, largest opportunity in civilian market despite military opportunity.

Q: Research coverage prospects?

A: Covered by analysts, including Maxim and Ascendiant Capital Markets.

Q: Surprise in revenue increase in first two months of 2024 considering next-gen commercialization?

A: Attributed to awareness among key opinion leaders, exciting clinical outcomes showing need, effective messaging, and strong sales and marketing team.