Daxor Corporation is indeed a unique company. However, it is clearly not an investment company. As a major investor of the company, I was attracted to both its pioneering medical diagnostic device and its long-term conservative approach to resource utilization. Most medical device start-up companies subscribe to the business model which requires a relatively large upfront investment, and then subsequent large infusions of cash to maintain operations as its new medical device or drug navigates its way through governmental approvals, medical trials, reimbursement acceptance, and eventually “standard of care” acceptance. The majority of medical start-ups succumb to the many years required to find its way to “standard of care”. Most die off; the lucky few are eventually purchased by a larger financial concern which often spends even far more resources to bring the device or drug to market. One needs to only look at common everyday medical technologies of today like the MRI, electrocardiogram or PET scanner and remember the long path and huge financial resources that these technologies required on the path from “discovery-to-market”.
Most savvy investors would look at some of the clinical results of Daxor’s early research. For instance, studies published in 2004 demonstrated that heart failure patients who were identified to have a normal blood volume by Daxor’s Blood Volume Analyzer had a 100% survival rate versus a 55% death rate of those patients identified to have a larger than normal blood volume. Further, when compared to existing standards of care to identify a patient’s blood volume, physicians incorrectly identified the volume status of patients 50% of the time!
Based upon this research and other medical data, Daxor’s strategy has been to invest its limited resources in research and development. Although it is unusual for a medical device company to generate a greater amount of income from investment sources, to those that understand the rigors of bringing a medical device to market, Daxor has positioned itself in an enviable position to continue its simultaneous approach to market, research and develop what will assuredly become a standard of care in the near future.
I would much rather invest in a company that has the financial resources to continue to develop and market its device than a company that lives day-to-day hoping that either some other company will pick-up its technology or, even worse, that a great medical invention gets passed over due to a lack of resources.