Daxor Corporation Acquires Volumex® and Megatope® From Its Existing Supplier Along With Glofil® to Enhance Existing Suite of Diagnostics
- Acquisition of exclusive rights and intellectual property for Volumex, Megatope, and Glofil.
- Expected increase in margins and revenue streams.
- Immediate cash flow positivity upon manufacturing transfer.
- Seller-provided financing on favorable terms.
- Structured payments over two years supported by revenue from Glofil and cost-savings from in-house manufacture of BVA test kits.
- None.
Insights
The acquisition of exclusive rights and intellectual property by Daxor Corporation from Iso-Tex Diagnostics represents a strategic consolidation of supply chain processes, which is expected to enhance operational efficiencies. By internalizing production, Daxor is likely to benefit from higher profit margins due to reduced cost of goods sold (COGS). The transition to in-house manufacturing for Volumex and Megatope, along with the acquisition of Glofil, also suggests a diversification of the product portfolio, which can lead to increased revenue streams.
From a financial perspective, the use of seller-provided financing with deferred payments is noteworthy. This arrangement could alleviate immediate cash outflows and provide Daxor with the flexibility to manage cash reserves effectively during the transition period. However, investors should monitor the company's ability to meet its payment obligations once they commence, especially since the payments are expected to be covered by the newly acquired revenue streams and cost savings. The financial health of Daxor post-acquisition will depend on the actual realization of these projected benefits.
The healthcare and diagnostics sector is increasingly competitive, with innovation and comprehensive service offerings being key differentiators. Daxor's move to acquire Glofil and the rights to manufacture Volumex and Megatope could potentially enhance its competitive positioning by offering a broader range of diagnostic solutions. Specifically, the ability to cross-sell Glofil to Daxor's existing customer base may lead to increased market penetration and customer retention.
Understanding the overlap between users of Glofil and Daxor's core hospital customers is critical in evaluating the potential for cross-selling success. The strategy to provide a combined product suite for blood volume and kidney function measurement is aligned with the trend towards integrated diagnostic solutions in healthcare. However, the true impact on Daxor's market share and revenue growth will depend on the effectiveness of their commercialization efforts and the market's reception of the combined product offering.
Transitioning the manufacturing of radiopharmaceutical diagnostics in-house is a significant operational change for Daxor. The shift to self-manufacture not only implies potential cost savings but also requires a robust quality control system and compliance with stringent regulatory standards. The radiopharmaceutical industry is heavily regulated due to the use of radioactive materials and any lapses in manufacturing processes can lead to regulatory setbacks and affect product availability.
It is essential to consider the operational readiness of Daxor's Oak Ridge facility to handle the increased production responsibilities. The company's ability to maintain a consistent supply of high-quality products will be critical in realizing the projected earnings accretion. Additionally, the acquisition of Glofil, a drug that measures glomerular filtration rate, indicates an expansion into renal diagnostics, which may require additional expertise and resources to integrate successfully into Daxor's existing operations.
Expected to Improve Margins and Increase Revenue Streams
Oak Ridge, TN, March 25, 2024 (GLOBE NEWSWIRE) -- Daxor Corporation (Nasdaq: DXR), the global leader in blood volume measurement technology, announces today it has entered into a definitive agreement to acquire exclusive and worldwide rights and intellectual property to manufacture from its existing supplier for Volumex and Megatope from privately-held Iso-Tex Diagnostics, Inc. Daxor has also acquired the exclusive rights to Glofil, a drug that measures glomerular filtration rate (GFR), which Iso-Tex has been selling directly to its customer base.
Daxor projects the acquisitions to be cash flow positive and accretive to earnings immediately upon transfer of the manufacturing. This is due to the embedded revenue streams of the drugs and significantly higher margins that will be achieved with internalized production.
“Bringing the manufacturing of these radiopharmaceutical diagnostics in-house at our Oak Ridge facility is a game-changer for Daxor that will substantially increase our margins on blood volume analysis (BVA) test kits as we scale up,” said Michael Feldschuh, President and CEO of Daxor. “Acquiring Glofil gives us a new product to cross-sell into our growing customer base."
“Glofil, a trusted GFR diagnostic, shares a user base that overlaps with Daxor's core hospital customers. Adding Glofil allows Daxor to offer a compelling combined product suite for measuring both blood volume and kidney function creating an additional revenue stream for the company,” said Senior Vice President of Commercialization and Customer Experience, Jean Oertel.
The deals have been structured with seller-provided financing on favorable terms. No payments will come due until manufacturing is fully transitioned to Daxor over the next 6-9 months. The total transaction value will then be paid in monthly installments over two years from that point, with payments anticipated to be supported by the revenue from Glofil and cost-savings from in-house manufacture of BVA test kits.
The transaction is subject to customary conditions, including receipt of applicable regulatory approvals.
About Iso-Tex Diagnostics, Inc.
Founded in 1975 by Tom Maloney, Iso-Tex manufactures radiopharmaceuticals for diagnostic and therapeutic applications for Daxor and other customers. Iso-Tex is headquartered in Pearland, Texas.
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
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