MRI-guided radiation startup files to raise up to $69M in IPO

The ongoing convergence of diagnosis and treatment capabilities into the same device is a prominent theme for med tech. Now startup ViewRay, which is doing just that for cancer, has filed to raise up to $69 million in an IPO.

Med techs have had a mixed reception on Wall Street so far this year, with at least five IPOs getting done at the same time that several med techs have postponed their debuts on the public markets.

ViewRay already has some high-profile investors; its roster includes Aisling Capital with a 21.3% pre-IPO stake, Beacon Bioventures (21.3%), OrbiMed Advisors (21.3%) and Kearny Venture Partners (12.2%).

The company had burned through $142.4 million by Sept. 30 since its 2004 inception. That can make it tough for new investors to come in at a valuation that's attractive for them.

The MRIdian System--Courtesy of ViewRay

ViewRay markets MRIdian--the first and only MRI-guided radiation therapy system that images and treats cancer patients at the same time, according to the company. It uses magnetic resonance imaging to differentiate between different types of soft tissue. It then delivers radiation treatment to the tumor, delivering less radiation to the surrounding healthy tissue than traditional radiation treatments.

The system can be used in more than 20 different tumor types, in some of which radiation therapy previously was not an option. MRIdian was cleared by the FDA in May 2012 and received a CE mark in November 2014. The company had $5.9 million in revenues for the 9 months ending Sept. 30 with an operating loss of $20.4 million during that period.

The MRIdian system is expected to improve tumor visibility and targeting, enable surgeons to adapt during a procedure as well as record and evaluate the delivered dose. All this is expected to lead to better patient outcomes and reduced side effects from off-target radiation delivery.

But the company noted in its SEC filing that it is tough to secure reimbursement from third-party, U.S. payers that are increasingly cost-conscious and may provide "limited coverage for, and reimbursement of, certain procedures such as MRI-guided radiation therapy."

MRIdian has not received a National Coverage Determination (NCD) from the Centers for Medicare & Medicaid Services (CMS), which would aid in its systematic reimbursement within the U.S. But some local Medicare Administrative Contractors have adopted or proposed local coverage determinations covering MRI-guided radiation therapy.

- here is the SEC filing

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