Back to top

Analyst Blog

Oncology and X-Ray products company, Varian Medical Systems (VAR - Analyst Report) recently revealed that China's State Food and Drug Administration has given it clearance to sell the Unique offering, which is a medical linear accelerator for cancer therapy with sophisticated types of image-guided radiotherapy.

The Unique system may be utilized to provide RapidArc therapy as well as intensity-modulated radiotherapy and accurately focus on tumors while reducing collateral damage to adjacent healthy cells. The Unique system may be used to treat different types of cancers.

It is estimated that over 2.2 million fresh cancer cases come up in China each year. Many cancer institutions function on two or even three shifts to meet the demand for radiotherapy. In order to reduce backlog, the Ministry of Health in China has decided to permit hospitals to sharply increase the number of accelerators. For its part, Varian developed the Unique system keeping in mind the growing requirements of China and other countries.

The Unique radiotherapy system is the first radiotherapy system equipped for beam shaping, image guidance and RapidArc know-how. Varian’s Eclipse therapy planning software is integrated with the system. Unique may be used to provide RapidArc therapy, as much as four times more rapidly than orthodox intensity-modulated radiotherapy.     

Varian is currently selling two versions of its system namely the Unique Power Edition which is a somewhat basic upgradeable setup and the Unique Performance Edition which is an integrated version for RapidArc radiotherapy.

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 designed 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.

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

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%