In a bid to strengthen the Oncology Systems segment, Varian Medical Systems (VAR - Free Report) recently announced its plans to demonstrate its comprehensive portfolio of advanced brachytherapy solutions. The company will exhibit the product line in the American Brachytherapy Society Annual Meeting from Jun 7-9 in San Francisco.
Notably, the company will demonstrate four brachytherapy solutions in the conference. These include, BrachyVision Brachytherapy Treatment Planning System, VariSeed LDR Prostate Treatment Planning System, Vitesse Real-time Planning for HDR Brachytherapy and Varian Brachytherapy Applicators and Accessories.
Varian’s Brachytherapy Profile in Focus
Brachytherapy Boosts Oncology Segment
The announcement is likely to boost Varian's Oncology Systems segment. Apart from various volumetric modulated arc therapy (VMAT), stereotactic radiosurgery and stereotactic radiotherapy, the brachytherapy unit is a significant contributor of Oncology Systems.
Salesin theOncology Systems business represented 93%, 94% and 94% of total revenues for fiscal 2017, 2016 and 2015, respectively. In the first quarter of fiscal 2018, oncology revenues totaled $698 million, up 6% at cc on a year-over-year basis.
The company’s brachytherapy solutions design, manufacture, sell and serve advanced brachytherapy products like VariSource HDR afterloaders, GammaMed HDR/PDR afterloaders, BrachyVision brachytherapy treatment planning system, other applicators as well as accessories.
The company’s Brachytherapy also develops and markets the VariSeed LDR prostate treatment planning system and the Vitesse software for real-time treatment planning for HDR prostate brachytherapy.
However, cutthroat competition in the niche brachytherapy space has been a headwind for Varian. The company competes head to head with Elekta AB, MIM Software Inc and Eckert & Ziegler BEBIG GmbH in terms of brachytherapy solutions.
Varian manufactures its high dose rate of brachytherapy systems in Crawley, U.K. The company’s brachytherapy treatment planning products are manufactured in Charlottesville and Virginia.
Varian Medical Systems, Inc. Price and Consensus
Brachytherapy – the Market Prospects
Brachytherapy is an alternative to external beam radiotherapy. The process involves the insertion of radioactive seeds, wires or ribbons directly into a tumor or body cavity near the tumor.
Brachytherapy is often used for cancers of the head and neck, breast, uterus, cervix, soft tissue as well as prostate.
Per a recent research report by the GRAND VIEW RESEARCH, the global brachytherapy market is expected to reach $486.9 million by 2025, courtesy of increasing geriatric population, lifestyle issues and the underpenetrated emerging economies.
Considering the solid prospects in the global markets, the latest development is expected to bolster Varian’s foothold in the brachytherapy markets of the MedTech space.
Favorable Stock Performance
Varian outperformed its industry in a year’s time. The company’s shares have returned 19.2% against the industry’s fall of 2.6%. Also, the current return is higher than the S&P 500 index’s rise of 13.1%.
Zacks Rank & Other Key Picks
Varian sports a Zacks Rank #1 (Strong Buy).
A few other top-ranked stocks in the broader medical space are Abiomed, Inc. (ABMD - Free Report) , Genomic Health, Inc. (GHDX - Free Report) and Intuitive Surgical (ISRG - Free Report) .
Abiomed has an estimated long-term earnings growth rate of 27%. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Genomic Health has an expected earnings growth rate of 187.5%. The stock flaunts a Zacks Rank of #1.
Intuitive Surgical has an expected long-term earnings growth rate of 12.1% and sports a Zacks Rank #1.
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