Varian Wins 510(k) for X-Ray System

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Oncology and X-Ray products company Varian Medical Systems, Inc. (VAR) recently revealed that it got 510(k) clearance from the Food and Drug Administration (:FDA) for its X-Ray image processor workstation. The Nexus DRF Digital X-Ray Imaging System combines digital radiography and radio frequency expertise within one set-up.

The Nexus system allows the lab specialist to generate, relay and print quality X-Ray images. This equipment has the capability to interface with a variety of systems. It has the ability to capture minute image details that may be difficult with other systems. 

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) and Intuitive Surgical, Inc. (ISRG) are Zacks Rank #2 (Buy) stocks, which are expected to do well.

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