ViewRay Inc. CEO Scott Drake is a familiar face in Colorado’s medical tech industry, and people in Denver are about to see a lot more of him and his ViewRay teammates.
The Cleveland-based medical device manufacturing business (NASDAQ: VRAY) is consolidating its headquarters in Denver and could create up to 274 high-paying jobs here in coming years. Currently most of its 300 employees are in Ohio and California.
In an interview with The Denver Gazette from the 30th floor of the Granite Tower downtown, Drake talked about his time as CEO for Colorado Springs-based Spectranetics Corp., finding a new mission after the company sold for $2.2 billion in 2017, the med-tech ecosystem in Colorado and ViewRay’s MRI-guided device, which he says “is a paradigm change in cancer care.”
“We will be one of the fastest growing med-tech companies in the world for years to come,” Drake said. “That’s a mouthful, but it’s true.”
The numbers he uses to support that claim:
• Expected revenue growth of 40% in 2022.
• Expanding the company’s “gross margin by 750-to-1,000 basis points.”
• Treated more than 25,000 cancer patients.
• Installed 53 of the “MRIdian” programs worldwide, with another 70 under construction.
• An estimated $700 million ($350 in backlog of systems and $350 in a backlog of service) in future revenue from customers who have paid a deposit “and they’re dying to get their system in the ground,” Drake said.
“Our customers are delivering groundbreaking clinical results in both the toughest to treat and more ubiquitous cancers,” Drake told investors during a company earnings call in February.
The MRIdian technology allows for precise delivery of radiation blasts to remove cancer without the residual damage to other soft tissue.
Technically, it’s described as “ MRIdian SMART (Stereotactic MRI-guided adaptive radiotherapy) for treatment of pancreatic, prostate, lung, liver, breast, colorectal and oligometastatic cancers,” according to ViewRay.
“Healthy tissue toxicity is cut in half,” he said. “So whether you’re talking about keeping people alive with no side effects from the traditional therapy, or dramatically improving the quality of their life. We’re talking five treatments, or one, versus 30-to-40 and no side effects. It’s an incredible breakthrough.”
Drake said there wasn’t much by way of a med-tech ecosystem in Colorado almost 20 years ago when he started with VallyLab, a surgery device business based in Boulder. But then he helped moved DaVita Inc. from California to Colorado in 2010-11, and then moved on to Spectranetics – a manufacturer of minimally-invasive cardiovascular devices.
There Drake and the team built the company from “an enterprise value” of $200 million in 2011 to the $2.2 billion it sold to Royal Philips, now called Philips Healthcare, in 2017. The number of employees doubled in that time to 500.
Published reports showed Drake cleared $8.02 million in the deal.
“We felt super blessed with that exit,” he said. “When you have an exit like that, that was successful … as a consequence we had a number of opportunities to look at.”
“If you’re a CEO, you get more credit than you deserve. And probably, on the other hand, maybe a little more blame.”
The team wanted to stay in technology and were looking for a “standout technology that would enable that societal impact.”
Drake’s mother is a breast cancer survivor “thank God.”
“I went to every one of her radiation therapy sessions,” he said. “She got fried. I mean fried. She couldn’t sleep because of all the pain, all the redness, she was embarrassed by how she looked. It was awful.”
When Drake came to lead ViewRay in 2018, he wanted to avoid a pitfall he saw many companies experiencing by “peanut butter resources” – trying to do too much and spreading the resources too thin.
Instead he implemented a four-part plan:
• Attract, retain and develop talent.
• Operate with “wicked strategic clarity.”
• Execute “as if lives depend on it, because indeed, in our case, they do.”
• “Live in the recognition that every interaction that you have, every singe one, is doing two things: Is it improving your culture? Or is it dis-improving your culture.”
“We built from scratch, or rebuilt, literally every single department in the company, with the exception of our innovation team – which is run by our founder and Chief Scientific Officer Jim Dempsey,” Drake said. “If you create a culture that great people want to be a part of, almost everything else takes care of itself.”
Company officials started the process of expanding in Colorado in 2019 – Drake and his family never left.
They secured $9 million in jobs growth incentive tax credits from the Colorado Office of Economic Development and International trade to create up to 274 “net new jobs.”
The City of Denver’s Economic Development Office chipped in a $200,000 cash incentive through its Business Incentive Fund.
“Denver ‘won’ the project and the company has been a corporate citizen of our community ever since,” said Chief of Staff Chelsea Rosty in an email statement. “The relocation of their headquarters is the final step of the company’s commitment to their Denver presence and speaks to the quality of place and talent the company has found here.”
ViewRay’s customers are hospitals and educational institutions like Cornell and UCLA. There are no MRIdain programs in Colorado.
“It would be really great to have it here in our home state,” Drake said. “I mean literally dozens and dozens of patients have traveled to California, Florida, New York even St. Louis to Washington University for their therapy.”