RapidArc Spreads in the U.K.

Oncology and X-Ray products company, Varian Medical Systems ( VAR - Analyst Report ) recently revealed that a number of hospitals under the National Health Service of the U.K. are utilizing RapidArc radiosurgery know-how for providing stereotactic ablative body radiotherapy. Thus, lung cancer victims have another option to surgery.

Lung cancer is hard to treat and, as per the World Health Organization, constituted 18.2% of cancer mortality in 2010. Survival rates for lung cancer are largely poor partly because it goes undetected till it is in an advanced state.

By utilizing RapidArc know-how, stereotactic ablative body radiotherapy provides certain lung cancer victims a less invasive therapy alternative. Stereotactic ablative body radiotherapy has been the topic of more than 40 recognized clinical papers and about 30 review papers.

Hospitals in London, Glasgow, Guildford and Wirral are currently using offerings from Varian to tackle lung tumors often in the elderly or inoperable cases. For this purpose, they send well crafted, strong dosage X-Ray beams in therapy sessions that last 3 to 8 periods.

Varian is a leading manufacturer of integrated radiotherapy systems for cancer treatment, and a premier supplier of X-ray tubes for diagnostic imaging applications. The company operates in a technology-driven environment where success depends on the use of new technology, product development and upgrades. In the radiation oncology market, Varian competes with Accuray ( ARAY - Analyst Report ) .

Varian is poised to increase its market share in radiation oncology. It currently enjoys a healthy demand for its coveted TrueBeam technology, which has meaningfully contributed to its net order oncology growth. Varian’s TrueBeam was created to treat tumors with beams of high speed and precision. It incorporates several technological innovations such as positioning the patient and managing his/her motion. It can dispense dosage roughly four times faster than that possible with earlier equipment.

Moreover, Varian enjoys a strong balance sheet marked by low debt and moderate cash. The company from time to time uses a part of its healthy cash flow for share repurchases.

However, Varian competes with larger players in a technology-intensive industry. Further, uncertainties stemming from health care reform and a still weak hospital capital spending environment across many developed countries, especially in Europe, are significant challenges.

We are currently ‘Neutral’ on Varian. The stock retains a Zacks #4 Rank, which translates into a short-term Sell rating.