ViewRay files for Chapter 11 protection

BY Richard Summerfield

ViewRay Inc., has filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the District of Delaware. The company’s filing, which came on Tuesday, saw it further disclose that it intends to pursue a sale of its business under section 363 of the Bankruptcy Code, including a sale of all or a portion of the company’s assets, while continuing to support its customers during the Chapter 11 process.

To facilitate the Chapter 11 filing, in addition to having the use of its sufficient existing cash reserves, the company has received a commitment of around $6m in debtor-in-possession (DIP) financing from MidCap Financial Services.

The company has appointed Paul Ziegler as its chief executive. Mr Ziegler, who had previously served as the chief commercial officer (CCO) of the company, has also been appointed to the board as a director. The board also decreased from nine to seven directors. Prior to the Chapter 11 filing, the company terminated its then-CEO, its interim chief financial officer and chief legal officer.

ViewRay developed the MRIdian radiation-therapy system, the ‘world’s first’ radiation therapy system integrated with diagnostic-quality MRI guidance.

“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,” said Mr Ziegler 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.”

ViewRay has endured some financial difficulty in recent years. Hit by inflation, supply chain challenges and inconsistent payments from international customers, the company has fallen on hard times. As of 31 March 2023, ViewRay had an order backlog of $411m and recorded adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) losses of $25m in the first quarter of 2023. The company currently intends to lay off 71 employees, in addition to the 36 it let go earlier in 2023. ViewRay currently has 232 remaining employees.

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

News: ViewRay Files Voluntary Chapter 11 Petitions

Eli Lilly to acquire Versanis for $1.925bn

BY Fraser Tennant

In a deal designed to strengthen its position in the fast-growing market for weight-loss treatments, US pharmaceutical company Eli Lilly is to acquire biopharmaceutical firm Versanis.

Under the terms of the definitive agreement, Versanis shareholders will receive $1.925bn in cash, inclusive of an upfront payment and subsequent payments upon achievement of certain development and sales milestones.

“Eli Lilly is committed to investigating potential new medicines to fight cardiometabolic diseases, including obesity, a chronic disease that affects over 100 million Americans,” said Ruth Gimeno, group vice president, diabetes, obesity and cardiometabolic research at Eli Lilly. “By unifying the knowledge and expertise in incretin biology at Lilly with the deep understanding of activin biology at Versanis, we aim to harness the potential benefits of such combinations for patients.”

A private clinical-stage biopharmaceutical company focused on the development of new medicines for the treatment of cardiometabolic diseases, Versanis’ lead asset, bimagrumab, is being advanced in the BELIEVE Phase 2b study as a novel treatment to help adults achieve and maintain both fat loss and a healthy body composition.

Analysts expect the market for weight-loss drugs to reach up to $100bn within a decade, with early movers such as Eli Lilly and Novo Nordisk acquiring a large portion of the market.

“It has been a privilege for our team to advance bimagrumab to address one of the greatest health crises of our time,” said Mark Pruzanski, chairman and chief executive of Versanis. “As a global leader developing life-changing medicines, Eli Lilly is ideally positioned to realise the potential of bimagrumab in combination with its incretin therapies to benefit people living with cardiometabolic diseases.”

The transaction between Eli Lilly and Versanis is subject to customary closing conditions.

News: Eli Lilly to buy Versanis for up to $1.93 billion in obesity drugs push

Global e-commerce fraud “growing and mutating”, reveals new study

BY Fraser Tennant

E-commerce losses to online payment fraud are growing and mutating, financially impacting businesses across the globe, according to a new study by Ravelin.

The study, ‘Global Fraud Trends: Fraud & Payments Survey 2023’, which surveyed 1900 global fraud professionals, reveals that over the past 12 months businesses have seen a huge leap in online payment fraud, account takeover, promotion abuse, refund abuse, and customer and friendly fraud.

As a consequence, businesses are spending more on expanding fraud teams in a bid to mitigate losses. Globally, three-quarters of all online businesses state that their fraud budgets will grow in 2023. In the UK, 62 percent of businesses will be spending more on managing fraud, with France spending 70 percent, Germany 74 percent, the US 69 percent and Canada 84 percent.

Despite this increase in spending, the study found that the funding and expansion of fraud items is only part of the solution, and new approaches are urgently needed to fight fraud and minimise losses.

“Over the years, businesses have built up fraud investigation teams which they are justifiably proud of,” said Martin Sweeney, chief executive of Ravelin. “But fraud continues to grow and mutate and simply throwing more people and money at the problem will not make it go away. Losses will continue to grow.”

When it comes to tools for tackling fraud, the study reveals that most businesses opt for in-house solutions, with machine learning and two-factor authentication two of the tools increasingly being adopted by e-commerce businesses to help with the issue. However, in-house solutions are expensive to maintain and quickly become unsustainable as a business grows, according to Ravelin.

The study also found that there is no singular ‘one and done’ fraud strategy that is most effective. Different solutions are effective at fighting different frauds, and having a robust tool stack allows teams to consider the complex nature of fraud.

“Businesses need to get on the front foot managing fraud: using automation to nip fraudulent transactions in the bud,” concluded Mr Sweeney. “Better automation helps teams scale and frees up fraud investigators from mundane tasks enabling them to focus on informing product development, identifying other sources of profit erosion, and other more important strategic tasks that drive growth.”

Report: Global Fraud Trends: Fraud & Payments Survey 2023

TPG to acquire Forcepoint unit in a $2.45bn deal

BY Richard Summerfield

Global asset management firm TPG has agreed to acquire Forcepoint’s global governments and critical infrastructure (G2CI) cyber security business in a deal worth $2.45bn.

The deal is subject to regulatory review and customary closing conditions and is expected to close in the fourth quarter of 2023.

Under the terms of the deal, Forcepoint’s commercial and G2CI businesses will be separated and will establish the G2CI business as an independent entity. The unit focuses on critical infrastructure for US government and federal agencies.

TPG will invest in Forcepoint G2CI through TPG Capital, the firm’s US and European late-stage private equity platform.

“It’s our mission to support the national security and intelligence communities by providing trusted, data-driven security solutions that enable them to collaborate and conduct mission-critical work securely and effectively,” said Sean Berg, president, global governments and critical infrastructure at Forcepoint. “TPG has a long history of carving-out, building, and scaling world-class cybersecurity companies. We’re confident that this partnership, along with continued support from Francisco Partners, will provide us the resources and expertise to strengthen our position as a partner of choice for government agencies.”

“Today’s operating environment – one in which data volumes are compounding, attack surfaces are broadening, and threats are growing in sophistication – demands dynamic security solutions,” said Tim Millikin, a partner at TPG. “This is especially true for the public sector, and Forcepoint has designed its platform to address the unique complexities of government objectives and culture. We’re excited to partner with Sean and the G2CI team to expand the platform and further its position as a leader in high assurance, zero trust security.”

“We are proud to have built an industry-leading portfolio of security products that protect government and enterprise customers’ infrastructure, people, and data,” said Manny Rivelo, chief executive at Forcepoint. “This transaction represents an exciting opportunity for the Forcepoint G2CI business to continue its trajectory of growth, delivering high assurance security to government and critical infrastructure customers worldwide. Similarly, it enables the Forcepoint Commercial business to further focus investment and innovation in accelerating growth of the company’s Data-first SASE platform, Forcepoint ONE, while delivering increased value to our customers.”

“Sean and the Forcepoint G2I team have been excellent partners and built a thriving business that will benefit from operating as its own standalone business,” said Brian Decker, a partner at Francisco Partners. “We are excited to remain investors in the business and partner with the management team and TPG to help it continue to grow and succeed”.

Francisco Partners, a leading global investment firm that specialises in partnering with technology businesses, acquired Forcepoint in January 2021 from Raytheon Technologies. Francisco will retain a minority stake in the unit going forward.

News: TPG to buy Forcepoint unit from Francisco Partners for $2.45 billion, Wall Street Journal reports

Bankruptcies boom in H1 2023

BY Richard Summerfield

Commercial Chapter 11 bankruptcies increased significantly over the first half of the year, according to Epiq Bankruptcy.

There were 2973 total commercial Chapter 11 bankruptcies filed during the first six months of 2023, a 68 percent increase over the 1766 filings during the same period in 2022. Individual Chapter 13 filings increased by 23 percent during the same period.

June saw a rise of 12 percent in overall commercial filings, with 2123 filings up from the 1891 commercial filings registered in June 2022. The 404 commercial Chapter 11 filings in June represented a 9 percent increase from the 371 filings in June 2022.

Bankruptcy filings for small businesses, known as subchapter V elections within Chapter 11, also increased 55 percent, according to the data.

Furthermore, total bankruptcy filings reached 217,420 during the first six months of 2023, a 17 percent increase from the 185,352 total filings during the same period a year ago. Total individual filings also registered a 17 percent increase, as the 205,313 filings during the first half of 2023 were up from the 175,094 filings during the first six months of 2022. The 85,390 individual Chapter 13 filings in the first half of 2023 represented a 23 percent increase over the 69,367 filings during the same period in 2022.

All chapters increased in June 2023 compared to June 2022, with 37,700 total bankruptcy filings representing an increase of 17 percent from the 32,198 filed in 2022.

Total commercial filings were up 12 percent from 1,891. Total individual filings were up 18 percent from 30,307.

“The increase in commercial and individual bankruptcy filings during the first half of 2023 underscores the economic challenges faced by businesses and individuals,” said Gregg Morin, vice president of business development and revenue at Epiq Bankruptcy.

Some of the most notable recent filings have included SVB Financial Group, Envision Healthcare Corp and Bed Bath & Beyond. An increasing number of companies is encountering financial difficulty as the global economy continues to fluctuate. The coronavirus (COVID-19) pandemic, the ongoing war in Ukraine, rising interest rates, inflation and increased borrowing costs have all impacted organisations significantly in recent years.

News: Commercial Chapter 11 Filings Doubled Over Same Period Last Year