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Oncology and X-Ray products company Varian Medical Systems (VAR - Analyst Report) recently revealed that medical practitioners at the Beatson West of Scotland Cancer Centre in Glasgow, U.K. have started to provide cancer therapy with the TrueBeam STx linear accelerator.

Varian’s TrueBeam reduces time required for treatment. It enhances precision by curtailing movement. If the High Intensity Mode of TrueBeam were not available, the time required for treatment would be much longer along with other limitations.

In conjunction with the High Intensity Mode, the first therapy at Glasgow also used Varian’s RapidArc know how. In RapidArc therapy, the beam is continuously configured to align the dosage to the shape of the tumor, thereby reducing damage to nearby healthy cells.      

The Beatson West of Scotland Cancer Centre in Glasgow provides cancer care to over 7,000 individuals each year using 11 linear accelerators from Varian.  

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).

The company 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 patient positioning and managing his/her motion. TrueBeam 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.

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 #2 Rank, which translates into a short-term Buy rating.

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