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Varian (VAR) & Reliance Group Tie Up to Enhance Cancer Care

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Varian Medical Systems, Inc. (VAR - Free Report) recently announced that its Advanced Radiotherapy Clinical School will run courses at India-based Reliance Group's flagship Kokilaben Dhirubhai Ambani Hospital (KDAH) in Mumbai. The school will run multi-day courses with an aim to provide greater access to training in advanced radiotherapy and radiosurgery techniques. The latest move is likely to boost Varian’s core Oncology Systems business.

Additionally, Varian and KDAH will provide an advanced fellowship program for radiation therapy technologists, enabling them to implement high-end treatments of cancer.

This is likely to strengthen Varian’s stance in providing quality cancer care in an emerging economy like India.

For investors’ notice, the Varian Advanced Radiotherapy Clinical School involves case-based learning with expert clinicians from some of the leading cancer centers in the United States.

Presence in India

Mumbai’s first Varian Edge radiosurgery system was installed in 2016. In the same year, the California-based MedTech giant was selected by India’s Apollo Hospitals Group for the supply of 12 advanced medical linear accelerators and five brachytherapy systems to replace traditional cancer treatment machines.

Recently, the first lung cancer patient in India was treated with Varian’s popular Halcyon system in Gujarat’s Sterling Cancer Hospital.

Performance in Other Emerging Economies

Apart from India, Varian has a strong presence in other emerging economies.

Earlier this year, the company announced the acquisition of Cooperative CL Enterprises (COOP), a leading distributor of radiotherapy equipment in Taiwan.

Last month, Varian collaborated with Kenya’s Mediheal Group of Hospitals to expand radiotherapy access in the country. (Read More: Varian Up on Tie-Up With Kenya's Mediheal Group of Hospitals)

Furthermore, the company announced a software technology training and education cooperation agreement with the Brazil Ministry of Health (MOH) and seven universities and science and technology institutions (ICTs) in Brazil. (Read More: Varian Medical Merges With Brazil MOH to Fight Cancer)

Oncology Business at a Glance

Varian’s Oncology unit currently offers six high-tech solutions — Radiosurgery, Radiotherapy, Proton therapy, HyperArc, ARIA OIS and Brachytherapy.

The segment has been the primary contributor to revenues so far (almost 94.1% in the third quarter of fiscal 2018).

In fact, in APAC, gross orders increased 7% year over year and 9% at constant currency.

Price Performance

We believe positive developments such as these will cushion Varian’s shares, which have rallied only 6% compared with the industry’s 25.7% in a year. The current level is also lower than the S&P 500 index’s 15.2% increase.

The stock currently has a Zacks Rank #4 (Sell).

Key Picks

A few better-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Masimo Corporation (MASI - Free Report) and Veeva Systems (VEEV - Free Report) .

Intuitive Surgical has an expected long-term earnings growth of 14.7%. The stock has a Zacks Rank #2 (Buy).

Masimo’s long-term earnings growth rate is projected at 14.8%. The stock carries a Zacks Rank #2.

Veeva Systems’ long-term earnings growth rate is estimated at 19.3%. The stock carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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