Varian Medical Systems (VAR) recently reported that Da Nang Cancer Hospital of Vietnam will avail from the company a radiotherapy configuration capable of providing intensity-modulated radiotherapy treatment (:IMRT). The system will accurately target tumors to reduce collateral damage to surrounding healthy tissue. The installation has come about following coordination between Varian, the U.S. Embassy in Vietnam and local partners.
The Da Nang Cancer Hospital is a charitable entity with 500 beds. Its IMRT set-up, the first in Central Vietnam, includes a modern Clinac linear accelerator and other essential features. The hospital estimates that it will utilize Varian’s equipment for cancer treatment later in 2012.
The placement of Varian’s cancer equipment at Da Nang was backed by the U.S. Department of Commerce’s Trade Advocacy Center. In addition, senior Government officials supported the joint endeavor between Varian Medical Systems and Da Nang Cancer Hospital.
According to the International Agency for Research on Cancer, Vietnam faces an incidence of almost 112,000 fresh cases of cancer each year. The country is witness to about 82,000 cancer-related mortalities every year.
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).
Varian 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.
Moreover, Varian enjoys a strong balance sheet marked by low debt and sizeable cash. The company uses a part of its healthy cash flow for 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.
We are currently ‘Neutral’ on Varian. The stock retains a Zacks #4 Rank, which translates into a short-term Sell rating.Read the Full Research Report on VAR
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