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ViewRay stock drops 15% after Elekta divests

by Gus Iversen, Editor in Chief | January 25, 2021
Business Affairs Rad Oncology
ViewRay's office in Cleveland Courtesy: ViewRay
Elekta has sold its entire 7.3% of the outstanding common stock (11,501,597 shares) in MR-guided radiation therapy market peer, ViewRay.

The shares in ViewRay were purchased in a public offering in December 2019 at $3.13 per share and sold on Friday at $4.65 per share. The proceeds from the sale were approximately $53 million, resulting in a gain of approximately $17.5 million, which will reportedly be booked in Elekta's third quarter 2020/21.

ViewRay, which manufactures the MRIdian linac system, saw its stock dive by over 15% on the day, according to The Motley Fool. Those loses remained through Monday.

The MRIdian combines a 0.35 Tesla MR scanner with a linear accelerator-based 6 MV photon beam.

Elekta offers its own MR-guided linear accelerator, called Unity.

In buying the stock, Elekta also signed a memorandum of understanding with ViewRay to advance the knowledge and application of MR-guided radiation therapy. The agreement involved the use of both companies’ MR-guided linear accelerator technologies, and included other initiatives, such as the formation of a cooperative group to focus on initiatives that could include efforts to affect healthcare policy.

“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 at the time of the investment. “By investing in ViewRay, we ensure that the two inventors of MR-guided radiation therapy continue to drive the paradigm shift forward.”

Elekta did not provide any reasons for its sell-off.

"It's always tough news when a company loses either a key investor or an important collaborator; ViewRay seems to have lost both," The Motley Fool reported. "So the healthcare company, already struggling with its financials, will have an additional burden to shoulder."

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