by Thomas Dworetzky
, Contributing Reporter | December 13, 2019
ViewRay has inked respective agreements with Elekta AB and Medtronic that aim to increase understanding into and practices of MR-guided radiation therapy.
The partnerships will each include the establishment of clinical studies to assess the impact and benefits provided by the treatment, as well as probes into additional therapeutic areas in which the technology could prove beneficial.
"We are pleased to announce these important collaborations and investments in ViewRay,” said ViewRay’s president and CEO Scott Drake in a statement. “Our goal is to concurrently prove the value of MR-guided radiation therapy and strengthen our balance sheet.”
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The agreement with Elekta will involve the use of both companies’ MR-guided linear accelerator technologies, and includes other initiatives, such as the formation of a cooperative group to focus on initiatives that could include efforts to affect healthcare policy.
Elekta will also invest in ViewRay, taking on a minority interest with the potential to rise to 9.9 percent.
“Elekta believes that competition is crucial to drive the adoption of any new technology, and that is why we are committed to continuing to develop and offer customers our high-field Elekta Unity and promoting this technology to benefit patients worldwide,” said Elekta's president and CEO Richard Hausmann in a statement. “By investing in ViewRay, we ensure that the two inventors of MR-guided radiation therapy continue to drive the paradigm shift forward.”
The deal between Medtronic and ViewRay is a similar clinical collaboration, that will make use of the MRIdian MR-guided radiation therapy system in studies. Medtronic has also committed to investing in a minority share of ViewRay as part of the deal.
"We are well-positioned to drive MRIdian to standard of care,” noted Drake, adding that, “the ability to see clearly during the procedure, track tumors and soft tissues, and auto-gate the beam is integral to delivering highly precise, personalized medicine."
The agreements with Elekta and Medtronic follow a rough period for ViewRay, which was,hit with an investor lawsuit in September
, filed over allegedly false or misleading statements made regarding negative operational and financial issues reported in August.
Specific allegations included failure to disclose that demand for ViewRay systems dropped due, in part, to changes around Medicare reimbursement; overstating reported backlog; and damages suffered by investors because of materially false and misleading statements made by ViewRay at all relevant times. Upon disclosing these challenges, the company’s stock price fell by more than 50 percent. It also slashed its previously issued full fiscal year 2019 financial guidance.
In addition to the deals with Elekta and Medtronic, ViewRay's biggest shareholder, Fosun International Limited will be putting in more money in order to keep its ownership percentage at present levels.
The investments from Elekta and Medtronic, however, will only take place if at least $75 million is raised. Elekta's investment will also require an aggregate cap of $36 million.
The deals are non-binding, subject to various terms and conditions.