By Anita Dushyanth, PhD
The FDA 510(k) application for the MRIdian-Linac system was submitted in August 2016. ViewRay (NASDAQ:VRAY) announced today (February 27, 2017) that the company received the much awaited 510(k) clearance from the FDA to market the MRIdian Linac system in the U.S.
The impending approval on the newer MRIdian-Linac systems had resulted in substantially limited demand of ViewRay’s MRIdian-Cobalt systems as customers awaited the newer system. Since the MRIdian-Linac upgrade maintains the footprint of the legacy system, the pop-apart model allows replacing the Cobalt with the Linac gantry. Even though the press release stated that the first two MRIdian Linac systems are expected to be installed at Henry Ford Hospital in Detroit and Barnes-Jewish Hospital at Washington University in St. Louis, it will not be surprising to see most of the existing customers opting for a Linac system as it is designed to be an easy upgrade. As the firm’s CEO Chris Raanes stated on the Q3 conference call (November 14, 2016) customers are flexible and about 85% of them are waiting for the launch of the new system. The firm has a backlog of 23 signed orders which translates to a total value of ~$133 million. With the new system, the firm could potentially climb to the top of the mushrooming Linac market and consolidate its position there with competitive pricing.
In September 2016, ViewRay received CE Mark for MRIdian-Linac in the EU. The German Research Foundation (DFG) has purchased a MRIdian Linac to treat patients at the University Clinic Heidelberg, the largest medical center in Germany and especially renowned for the treatment of cancer. This federal institution will be the first, and currently the only, to use the MRIdian Linac in a clinical setting within Europe.
The company reported revenue of $16 million for Q4 2016. Sale of four MRIdian systems resulted in revenue of close to $22 million for fiscal 2016, Net loss in Q4 2016 amounted to $11 million and ~$50 million for the full year 2016. VRAY exited fourth quarter 2016 with close to $14 million in cash and cash equivalents. In order to help support its operations in 2017, ViewRay announced (on January 18, 2017) that it had obtained gross proceeds of approximately $26 million through a private placement (closed on January 18, 2017) from the sale of 8.6 million shares of common stock and warrants. The warrants have an exercise price of $3.17/share and are exercisable after six months and expire seven years from the date of issuance. The cash is expected to be used primarily to support the ongoing commercialization of the MRIdian-Linac as well as towards the firm’s ongoing R&D and business operations.
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