BY Richard Summerfield
ViewRay Inc., has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware. The company’s filing, which came on Tuesday, saw it further disclose that it intends to pursue a sale of its business under section 363 of the Bankruptcy Code, including a sale of all or a portion of the company’s assets, while continuing to support its customers during the Chapter 11 process.
To facilitate the Chapter 11 filing, in addition to having the use of its sufficient existing cash reserves, the company has received a commitment of around $6m in debtor-in-possession (DIP) financing from MidCap Financial Services.
The company has appointed Paul Ziegler as its chief executive. Mr Ziegler, who had previously served as the chief commercial officer (CCO) of the company, has also been appointed to the board as a director. The board also decreased from nine to seven directors. Prior to the Chapter 11 filing, the company terminated its then-CEO, its interim chief financial officer and chief legal officer.
ViewRay developed the MRIdian radiation-therapy system, the ‘world’s first’ radiation therapy system integrated with diagnostic-quality MRI guidance.
“Despite the operating challenges, MRIdian has facilitated real societal value and remains critically important for a broad population of cancer patients, including those who were previously considered untreatable,” said Mr Ziegler in a statement. “We deeply appreciate our teammates, customers, partners, and patients that we serve. We will continue to work diligently to maximize value for the benefit of all stakeholders.”
ViewRay has endured some financial difficulty in recent years. Hit by inflation, supply chain challenges and inconsistent payments from international customers, the company has fallen on hard times. As of 31 March 2023, ViewRay had an order backlog of $411m and recorded adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) losses of $25m in the first quarter of 2023. The company currently intends to lay off 71 employees, in addition to the 36 it let go earlier in 2023. ViewRay currently has 232 remaining employees.
Going forward, ViewRay has vowed to continue “strategically managing” its inventory to help maintain customer sites across the globe. It has also filed several motions in bankruptcy court with the intent of continuing to service customers and honour obligations to remaining employees “following an additional reduction in force”.