Back to top

Analyst Blog

Varian Medical Systems' (VAR - Analyst Report) TrueBeam technology will be deployed across Meridian Health’s network of cancer treatment clinics in New Jersey. TrueBeam technology, developed by Varian, is used to treat cancer patients with advanced radiotherapy treatment. It is designed to treat tumors with great speed and accuracy, along with tumors that move at the time of treatment as the patient breathes.

Varian's shares, which are up around 14% over a year, rose 1.4% in the trading session following the news release. The stock is up roughly 8% so far this year.

Under this deployment program, Meridian will install seven TrueBeam machines across its five sites, together with Varian's Aria data management and Eclipse treatment planning software. Using Varian's FullScale cloud-based oncology IT data hosting solution, the entire network of these TrueBeam machines will be integrated and centrally managed. The five centers where these machines will be installed offer radiotherapy and radiosurgery treatment to oncology patients.

Meridian will also acquire patient support tools including tumor registry along with a survivorship software product, which will enable these cancer clinics to provide coordinated navigation and survivorship care planning for cancer patients.

Varian is a world leader in designing, manufacturing and marketing radiotherapy and radiosurgery equipment and software, to treat patients who suffer from different types of cancer. Varian's TrueBeam and TrueBeam STx, two new state-of-the-art radiotherapy and radiosurgery systems, are designed to treat cancer. These cutting-edge technologies will enhance the radiosurgery capabilities at Meridian's health care clinics through out Central and Southern New Jersey.

Installation of the TrueBeam technology will offer shorter treatment cycles to many patients. It will also add arc therapy to the range of treatment options the company currently utilizes. The installation of the TrueBeam technology is part of a multi-year agreement, worth roughly $30 million, signed between Meridian and Varian. This agreement was signed to expand, upgrade and standardize radiotherapy and radiosurgery treatment capabilities across the entire system.

A portion of the system order has been booked during Varian's fiscal first-quarter 2014. The remaining portion of the order will be booked over the term of the agreement. According to this agreement, Varian will also provide professional consulting services to Meridian's clinical teams in order optimize patient workflow and throughput at each of the centers.

Varian currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks worth considering in the medical instruments industry include Natus Medical Inc. (BABY - Snapshot Report), Cynosure, Inc. (CYNO - Snapshot Report) and Syneron Medical Ltd. (ELOS - Snapshot Report). All these stocks carry a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.