FDA Clears Varian's Vitesse


Oncology and X-Ray products company, Varian Medical Systems (VAR) has won the U.S. Food and Drug Administration (:FDA) 510(k) clearance for its Vitesse software. The tool is intended for providing high-dose-rate (:HDR) brachytherapy therapy for prostrate cancer treatment, using real-time ultrasound guidance.

This advanced version of Vitesse lowers the complexities of planning and performing the treatment, as well as reduces the time required, thereby enhancing operating room efficiency. Additionally, the device from the larger Oncology Systems has also received the CE Mark approval.

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).

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.

Revenues from Oncology Systems increased 8% year over year to $524.3 million in the first quarter of fiscal 2013. Following the green signal from the FDA, the Vitesse program should further boost growth in the segment.

Moreover, Varian continues to post decent results despite the contagion of economic problems in Europe and sustained softness in certain end markets. It enjoys a strong balance sheet marked by low debt and sizeable cash. The company also periodically deploys capital to boost investor confidence via 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 matters of concern.

The stock carries a Zacks Rank #3, which translates into a short-term Hold rating. Cantel Medical Corp. (CMN) and Cyberonics Inc. (CYBX) with Zacks Rank #1 (Strong Buy) are expected to do well in the medical instruments industry.

Read the Full Research Report on VAR

Read the Full Research Report on ARAY

Read the Full Research Report on CYBX

Read the Full Research Report on CMN

Zacks Investment Research

More From Zacks.com
View Comments (0)