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Varian (VAR) Launches Software Platform for Cancer Care

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Varian Medical Systems Inc. (VAR - Free Report) recently launched the 360 Oncology care management platform. It is a software system designed to integrate and coordinate key elements of cancer care.

The 360 Oncology platform brings together on a single platform, radiation, medical and surgical oncology, social services, primary care physicians, as well as the patient. This facilitates collaborative and coordinated care. The platform comes with several key features to present a dashboard view of clinical and operational data to simplify care coordination, increase patient engagement and enable more informed decisions.

Varian’s oncology business growth prospects are impressive. The company is addressing both the tier 1 and mid-tier markets through its Edge, Truebeam and VitalBeam products. Moreover, the company is winning contracts, not only in the Americas but also in international markets, which is a huge positive.

Strong third-quarter 2016 results validate the company’s growth scenario. Adjusted earnings of $1.22 per share beat the Zacks Consensus Estimate by a nickel and increased 6.1% on a year-over-year basis. The figure comfortably surpassed management’s guided range of $1.16–$1.20 per share.

Oncology System sales increased 8.3% from the year-ago quarter to $605.2 million, while gross orders increased 6.4% to $675.9 million in the quarter. Moreover, Oncology gross margin improved more than 400 basis points to 46% driven by a favorable product mix (higher mix of TrueBeams and software) as well as productivity gains.

Following robust results, Varian raised its fiscal 2016 guidance. The company now expects adjusted earnings in the range of $4.62–$4.66 per share, up from the previously guided $4.55–$4.65. Revenues are still expected to increase 3% in fiscal 2016.

Zacks Rank & Key Picks

Currently, Varian Medical has a Zacks Rank #3 (Hold). Better-ranked stocks in the medical sector include GW Pharmaceuticals plc (GWPH - Free Report) , NuVasive, Inc. (NUVA - Free Report) and Baxter International Inc. (BAX - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Biopharmaceutical major, GW Pharmaceuticals consistently surpassed expectations in the last four quarters, with an average positive surprise of 41.7%. This represents an impressive year-to-date return of approximately 58.1%.

Lantheus Holdings, a worldwide provider of diagnostic medical imaging agents, has an impressive long-term earnings growth rate of 12.5%. Year to date, the stock has performed better than the S&P 500, with a gain of 143.2%.

Quidel, a provider of diagnostic testing solutions for applications primarily in infectious diseases, women’s health, and gastrointestinal diseases, has an impressive long-term earnings growth rate of 20%, better than the industry’s 14.8%. The stock recorded a gain of 4.3% year to date.

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