Knowing your blood volume

Dr. Joseph Feldschuh
Chairman and President

Interview conducted by:
Diane Reynolds, Co Publisher

CEOCFOinterviews.com
June 2002

CEOCFOinterviews: Please explain to my readers what is going on with your company today.

Dr. Feldschuh: The company is primarily engaged in medical instrumentation manufacturing, although it has an interest in cryobanking, which I’ll explain later.  Daxor has the only FDA approved automated blood volume analyzer on the market, and we have patents on the instrument in the United States, Europe and Japan.   A blood volume analyzer is an instrument that measures the total amount of blood in the human body. The test isn’t new; it’s been around for over sixty years.   It requires the injection of a very precisely measured injection of a tracer.   The collection of samples starts ten minutes later, and is repeated in short intervals thereafter. A total of one ounce of blood is required for the measurement.   While the test is relatively easy in principle, it was rather difficult to perform because of the requirement to prepare precisely matching standards.  There are multiple steps in the preparation and performance of the test, creating the possibility of error.  What we did was automate the test. The most common medical test is a hemoglobin or hematocrit test.  It’s basically a test to detect anemia, but what it actually does is it determines the ratio of red cells to plasma.  If someone has a 40% hematocrit, then what we are really saying is that 40% of their blood is red cells and 60% is plasma, the water part of blood.  The red cells primarily carry oxygen.   The problem with the test for anemia is that the underlying assumption is that the patient has a normal blood volume.  If they don’t have a normal blood volume, their hematocrit percentage can be very misleading; for example, heart failure patients retain water, which expands their plasma volume.  They can have a 20 or 25% decrease in their hematocrit.  In other words, you dilute the red cells and your hematocrit automatically drops.  You may think that the person is anemic or losing blood, whereas what they are doing is diluting their red blood cells.  In contrast, some conditions can result in a lower blood volume.  When you have a lower blood volume, the hematocrit is artificially elevated.  These patients may have a normal hematocrit, but have a serious hidden anemia.  Hidden anemia is common in women and cancer patients, and may be unrecognized before complications occur.

CEOCFOinterviews:  In what conditions would doctors use this test?

Dr. Feldschuh: There are multiple conditions where blood volume would be helpful, such as heart failure and high blood pressure (which affects over 50 million people).  When treating high blood pressure, it is automatically assumed that a person has too much blood in their body, and they are given a diuretic which causes loss of salt and water. This is a form of internal bleeding that depletes the water and salt in your body. The problem is, if you don’t have an expanded blood volume as the cause of high blood pressure, your kidneys don’t get enough blood.  You can eventually develop kidney failure.  Another example is fainting.   President Bush fainted, Janet Reno fainted, the Governor of Chicago fainted, Katherine Graham, publisher of Washington Post probably fainted when she fractured her skull.  Fainting, aka syncope, is very common and dangerous.  Sometimes people faint because they don’t have enough blood.  We all know that on a hot day you can sweat so much that your body loses an excessive amount of water.  As a result, fainting, (or the medical term “syncope”) can result.  The reason you faint is your blood volume drops and you don’t have enough going to your brain.  Some people have unrecognized chronic low blood volume.  Without a blood volume test, these patients may not be correctly treated because their condition may not be detected.

CEOCFOinterviews: Are insurance companies reimbursing for this procedure?

Dr. Feldschuh: Yes, this is a standard accepted test.  The test is over 60 years old; Daxor simply automated it.  There are six CPT codes for it.  It is a fully reimbursable test.

CEOCFOinterviews: What is the norm blood volume?

Dr. Feldschuh: The norm blood volume depends on an individual’s body size and configuration, as well as the sex of a person.  One of the things that the blood volume analyzer does is it computes the norm for a person with a high degree of accuracy.  The computation is somewhat complex, but is based on height and weight. The blood volume analyzer does it all automatically.  A woman has 20% less blood cells than a man of equal height and weight.  People of different body sizes have different blood volumes.  These variable factors are taken into account in computing a person’s normal blood volume.  Now, while the percentage of red cells is relatively similar, a man of five feet tall may have a 45% hematocrit, and a man who is six feet tall may have the identical hematocrit of 45%, but the normal blood volumes may be very different.  A five-foot person weighing 130 pounds has significantly less blood than a person who is six feet and weighs 200 pounds.  The instrument calculates the normal for each individual.  It is essential to know what is the normal blood volume for an individual; it’s not enough to just measure blood volume. 

CEOCFOinterviews: Do most hospitals recognize this test?  Is this strictly in the US or is it global?

Dr. Feldschuh: We’ve only had it installed in the United States and Puerto Rico; we haven’t done marketing overseas yet.  We’re hoping to get some overseas placement.  Our strategy has been to get this into the best hospitals in the country.  We are in Columbia Presbyterian here in New York.   We are also in the Cleveland Clinic Cardio Vascular Center. You’re probably familiar with US News Report Annual Survey of 6200 hospitals.  The Cardiovascular Center in Cleveland ranks as the number one center in the US for that.  Every patient who comes into the cardiovascular department for syncope gets a blood volume. Over a thousand cases will soon be reported in their study.  Exact treatment for fainting is very crucial.  If you faint while you are driving you may not only kill yourself, but a few other people as well, so this is not a minor issue.  If you faint in the wrong place at the wrong time, you might fracture your skull.  Katherine Graham died because she fractured her skull.  She got up from a meal, went for a short walk, and fainted.  When some people with low blood volume eat, their blood pressure drops to dangerous levels.  It’s important to know why one has low blood pressure, because the treatment for Syncope is different depending on if you have a low blood volume, normal or expanded blood volume.

CEOCFOinterviews: What would be your marketing philosophy?

Dr. Feldschuh: Our strategy has been to get into these major hospitals and expand our sales and marketing.  You can obtain the instrument on a lease or direct purchase.  We are going to be running more education seminars on the advantages of doing blood volume.  We intend to expand the awareness of blood volume analysis.

CEOCFOinterviews: How about going into the teaching hospitals, the University type hospitals, the colleges where young men and women are studying to become doctors?  Are you informing them before they become health care professionals?

Dr. Feldschuh: We are reaching the larger medical school hospitals such as John Hopkins, ranked as number one in the US, and the MAYO Clinic.  Those are major teaching facilities. Columbia Presbyterian also is a major teaching institution, so we are focusing on those kinds of hospitals.

CEOCFOinterviews: Is this sometimes done during a surgical procedure to make sure that the blood counts are up where they should be?

Dr. Feldschuh: Several hospitals do blood volume tests pre-surgically.  One of the important things you can do is to do a blood volume on a patient several weeks prior to the operation, especially if this is going to be an elective operation.  Many patients enter surgery in a blood-depleted state.  The doctor will give them anesthesia and if they are blood depleted, their blood pressure may drop suddenly and severely.  This kind of complication can be avoided by testing a patient several weeks in advance and, if they have low blood volume, give them a medication such as Epogen or Procrit.  These are natural hormones that are manufactured to stimulate the bone marrow to make more blood.  There is no reason a woman has to enter surgery in a blood-depleted state. 

CEOCFOinterviews: If you’re tested weeks prior to surgery, is it possible that your blood can change between the time you were tested and your actual surgery day?

Dr. Feldschuh: It depends on what you are doing. If you take blood from a person for self-donation, then obviously their blood volume will change.   Sometimes you can harm a person by doing that because they may have low blood volume to begin with.  With a blood volume measurement you can prescribe medication to stimulate their bone marrow to rapidly make blood.

CEOCFOinterviews: Nowadays more people want to donate their own blood because of the potential hazards of receiving banked blood.

Dr. Feldschuh: Anyone who is going to self donate blood prior to surgery should have a blood volume done.  That way they can be actively treated, if necessary, to restore their blood volume to normal.  If you take blood from someone who was anemic to begin with, you are not helping him or her.  You can then decide the frequency you can take blood. Someone who has an expanded blood volume can donate two pints for themselves. You can then give them medication to have their bodies stimulate their blood.  If you have a blood volume measurement you can treat them in a scientific way. 

CEOCFOinterviews: Now the Blood Volume Analyzer, is that the only product you have at the moment?

Dr. Feldschuh: That is the main commercial product.  It works with a disposable kit that allows you to do one patient at a time.  We also have a frozen blood bank where people can store their own blood, and a semen bank where people can store their own frozen semen or donate sperm as an anonymous donor.  We are planning to expand the blood banking capacity significantly. 

CEOCFOinterviews: When people donate their own blood, that’s great, they have their own blood available at any time worldwide, but here in the US especially after a major disaster, the amount of blood necessary may not be there.

Dr. Feldschuh: It depends on what you mean by catastrophe.   Let’s say you were at the World Trade Center and when you got to a hospital and you had blood stored at our facility, we could have shipped it to wherever you were.  

CEOCFOinterviews: Where are your blood banks located?

Dr. Feldschuh: The main blood bank is located in the Empire State Building.  It is a very high security building with 24-hour security. 

CEOCFOinterviews: Obviously, besides the income from the actual Blood Analyzer itself and then the disposable kits, what else will you be working other than the blood and sperm banks?

Dr. Feldschuh: These are our main areas of concentration.   Market size is important - there are a million people who faint every year.   There are five million people hospitalized for congestive heart failure.   Fifty million people have high blood pressure.  Four million people receive blood transfusions without their physician knowing how much blood they have.  There are five hundred thousand people who have kidney failure.  There is a market potential for 15 – 20 million people to benefit from a blood volume analysis.    

CEOCFOinterviews: How long has this company been in business?

Dr. Feldschuh: It’s been in business almost thirty years.

CEOCFOinterviews: Then during the hard times in the market this company managed to stay afloat.

Dr. Feldschuh:  We only got approval for the Blood Analyzer in 1998 and the kit in 1999.  We really started BETA testing in the year 2000, so it’s only been in the past year that we started marketing the product. 

CEOCFOinterviews: As the market opens up for you, do you have the manpower to do the sales and marketing?

Dr. Feldschuh: We are increasing our staff as we speak.

CEOCFOinterviews: Do you have the cash and/or credit available to keep up with potential growth?

Dr. Feldschuh: The Company has almost $10 a share in cash.  We’re selling at a low price compared to what our fundamental assets are.  Most companies sell at 20 or 30 something times their cash, we are selling less than 2 times the cash.   We have a real product, and we think we are undervalued relative to our potential.

CEOCFOinterviews: Do you see any other avenues for growth in your company?

Dr. Feldschuh: Possibly.   Last year we acquired a very small laboratory relative to our overall company.  We may consider other acquisitions, yes.

CEOCFOinterviews: Everyone uses their website for informational purposes, business to business to order products or whatever they need.  Are you addressing these new areas?

Dr. Feldschuh: Yes, we have a website with over 120 pages to it. There is a big “Power Point” presentation on the Blood Volume Analyzer.

CEOCFOinterviews: What makes this company unique?

Dr. Feldschuh: I think relative value.  If you look at most other biotech companies, they are selling ten or twenty times their assets; not us, we’re selling at a small fraction of that, and we have a product that is approved by the FDA.   Many of these other companies are in the process of trying to get FDA approval.   We are already in the first stages of getting our instrument into the major institutions.  It’s difficult to get into major institutions, but we are already in some of the most significant US hospitals.

CEOCFOinterviews: Do you have any closing comments or anything that you may want to say to my readers?

Dr. Feldschuh: I think that our company is uniquely positioned.  We have two major areas - we have blood banking and the blood volume analyzer, and there is synergy between them.  We are looking for hospitals to partner with in terms of providing self-storage blood services and blood volume measurement.  We think many people with hidden anemia are not actively treated because they don’t have their blood volume measured.  Postoperative patients don’t know if they need transfusions, and some of them have their transfusions withheld because their physicians are unaware of the blood levels of their patients.  There are many things you can do to optimize the amount of blood in a person’s body during surgery or in chronic conditions.  Usually treatment is based on clinical impressions or guesstimates, which can be inaccurate.   The technology is here.  Just think how CAT Scans, MRI’s and PET scanners revolutionized diagnosis and therapy in many areas.  Blood volume measurement has the same potential.

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