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Vyaire Medical Files for Bankruptcy Amid Decline in Ventilator Demand

Vyaire Medical files for Chapter 11 bankruptcy with $500 million in assets and $1 billion in liabilities.

6/10, 13:00 EDT
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Key Takeaway

  • Vyaire Medical Inc. files for Chapter 11 bankruptcy, listing assets up to $500 million and liabilities reaching $1 billion.
  • Post-pandemic decline in ventilator demand and supply chain disruptions have severely impacted Vyaire's cash flow and market share.
  • The company plans to sell all its assets while continuing operations during the sales process, seeking court approval.

Vyaire Medical Files for Bankruptcy

Vyaire Medical Inc., a prominent ventilator manufacturer, has filed for Chapter 11 bankruptcy. The Illinois-based company, which specializes in developing breathing technology, listed assets of up to $500 million and liabilities reaching $1 billion. The filing, made on Sunday, marks a significant turn for the company that saw a surge in demand for its products during the Covid-19 pandemic. Vyaire has announced its intention to sell all its assets and is seeking court approval to continue operations throughout the sales process.

Decline in Demand Post-Pandemic

The demand for Vyaire's ventilators soared during the height of the Covid-19 pandemic. However, as the pandemic has eased, the need for such equipment has significantly declined. This reduction in demand has been compounded by pandemic-related supply chain disruptions, which have adversely affected the company's cash flow. Additionally, increased competition in the market has further eroded Vyaire's business, leading to a loss of over 10% of its market share in the ventilation segment since the peak of Covid infections.

Chief Executive Officer John Bibb commented on the situation, stating, "The Covid-19 pandemic significantly increased demand for the Company’s products and services, but post-pandemic macroeconomic challenges, including higher interest rates, inflationary pressure, and supply chain disruption forced the Company to reposition itself for the long term."

Historical Background and Operations

Vyaire Medical was founded by Forrest Bird, a World War II army pilot who studied high-altitude respiratory problems and went on to invent the first mechanical ventilator over a decade after the war. The company has since grown to operate approximately 27 offices and manufacturing facilities worldwide, employing about 950 people. Despite its historical significance and global presence, the company has struggled to maintain its market position in the face of evolving economic conditions and competitive pressures.

Management Quotes

  • John Bibb, CEO of Vyaire Medical Inc.:

    "The Covid-19 pandemic significantly increased demand for the Company’s products and services, but post-pandemic macroeconomic challenges, including higher interest rates, inflationary pressure, and supply chain disruption forced the Company to reposition itself for the long term."