Varian Links With Siemens Systems

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Oncology and X-Ray products company Varian Medical Systems, Inc. (VAR), and Siemens Healthcare, a part of Siemens AG (SI), recently revealed that technicians at The Ohio State University are utilizing Varian software to conduct radiotherapy sessions with linear accelerators manufactured by Siemens. The two companies have created an interface that links the Aria system from Varian with certain equipment of Siemens.

In Mar 2013, Siemens was granted 510(k) clearance from the Food and Drug Administration for connectivity between Aria software and two of its linear accelerators.

As per Varian, its software can function with 80% of Siemens hardware. In fact, a large proportion of Siemens locations may utilize Aria to handle different forms of care.

Siemens Healthcare is a leader in diagnostics, medical imaging and other health care areas. The company offers a wide range of offerings ranging from prevention to diagnosis. 

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 Incorporated (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). HeartWare International Inc. (HTWR) is Zacks Rank #2 (Buy) stock, which is expected to do well.

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