ViewRay Inc., which is developing MRI-based technology to deliver radiation therapy to cancer patients, has secured a $20 million Series C funding round.
The company is in the late stages of developing its technology, and the funding will be used to further product development, complete the first few installations of the company’s technology and beef up its sales and marketing efforts, according to CEO Greg Ayres.
The funding round was led by new investor Siemens Venture Capital GmbH and joined by existing investors Aisling Capital, Fidelity Biosciences, Kearny Venture Partners and OrbiMed Advisors, according to a statement from ViewRay.
“You just don’t see $20 million medical device venture rounds very often,” said Baiju Shah, CEO of BioEnterprise, a nonprofit that helps Northeast Ohio medical companies secure funding. “It’s a very significant validation from the marketplace that this company and its products have lots of potential.”
ViewRay says its technology helps doctors see exactly where radiation is being delivered to a cancer patient’s body, unlike existing technology, which doesn’t account for the movement of internal organs. That movement can cause radiation to be delivered to healthy issue, leading to harmful side-effects. The company’s technology aims to solve that problem by providing continuous soft-tissue imaging for more accurate delivery of radiation therapy.
ViewRay moved to Oakwood in suburban Cleveland from Florida in 2008, lured both by the region’s imaging talent and tax incentives. The Ohio Tax Credit Authority gave the company job creation tax credits worth about $537,000 over the subsequent 10 years. ViewRay pledged to hire 25 employees.
The company announced earlier this month (pdf) that Siteman Cancer Center in St. Louis would become the first clinical institution to test its device. The Series C round will fund that installation, which the company hopes to finish by early 2011. For ViewRay, product installation is a laborious process that lasts up to six weeks and involves implementing MRI and radiation-therapy machines in a radiation-shielded room, according to Ayres.
The latest capital infusion will also go toward ViewRay’s next two product installations, which Ayres hopes to begin around the middle of next year.
ViewRay received a $25 million Series B round of funding last year and has secured commitments for a total of $53 million in investment over the company’s lifetime, Ayres said.
The company plans to file for U.S. Food and Drug Administration 510(k) approval of its device sometime early next year, but there’s no telling how long the FDA’s review process will take, and in turn, when the device will hit the market.
While the company’s fundraising thus far has been impressive, its success is far from assured. That’s due in part to increased scrutiny of radiation devices by federal regulators expected on the heels of an award-winning series of New York Times articles that focused on the dangers of radiation overdoses.
ViewRay has 36 full-time employees, according to Ayres, who splits his time between Cleveland and Seattle.