Varian Applies Latest Vitesse

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Oncology and X-Ray products company Varian Medical Systems (VAR) recently revealed that a patient with prostate cancer was the first to receive therapy from the most current edition of Varian’s Vitesse. This offering enables doctors to plan and carry out the latest high dose rate (“HDR”) brachytherapy care, which is guided by ultrasound. The therapy was provided at the Levine Cancer Institute in Charlotte, North Carolina.  

In HDR brachytherapy, radiotherapy is delivered from within the anatomy by positioning a small transient radioactive source within the tumor. Many medical practitioners report a drop in the quantum of time (in comparison to other forms of treatment) required to complete the therapy. 

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. Varian’s TrueBeam is 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. Given its high intensity nature, TrueBeam can dispense strong dosage over twice as fast as that possible with earlier equipment.

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 significant challenges.

The stock carries a Zacks Rank #3 (Hold). Cepheid (CPHD) and Cyberonics Inc. (CYBX) are Zacks Rank #1 (Strong Buy) stocks, which are expected to do well.

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