Imaging vendor ViewRay files for Chapter 11 bankruptcy

Imaging vendor ViewRay has voluntarily filed for Chapter 11 bankruptcy, leaders announced Monday.

Based in Denver and founded in 2004, the company’s primary product, MRIdian, is the “world’s first” radiation therapy system integrated with diagnostic-quality MRI guidance. ViewRay has been plagued by problems in recent years, hit by inflation, supply chain challenges and delinquent payments from international customers. It had an order backlog of $411 million as of March 31 and logged adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) losses of $25 million in the first quarter of 2023.

ViewRay said it intends to pursue a sale of the business as part of the bankruptcy proceedings and has secured $6 million in financing to help facilitate the process. Prior to the filing, the company also terminated its CEO, interim chief financial officer and chief legal officer.

“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,” new Chief Executive Officer Paul Ziegler, who was appointed to the position at a base salary of $600,000 on July 15, said 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.”

Ziegler, who has been with ViewRay since 2019 as chief commercial officer, also is eligible to earn a performance incentive bonus “at a target level” of 100% of his salary. His contract additionally includes 1.2 million in shares of the company’s stock and a possible long-term cash incentive of another $1.2 million, according to an SEC filing.

ViewRay said it will continue “strategically managing” inventory to help maintain customer sites across the globe. It also has filed several motions in bankruptcy court with the intent of continuing to service customers and honor obligations to remaining employees “following an additional reduction in force.”

The company currently is laying of 71 staffers, on top of 36 more let go earlier in 2023, with 232 employees remaining. Unaudited financial statements listed some $226 million in assets with more than $178 million in liabilities as of the end of April, the Wall Street Journal reported.