Varian Medical Systems, Inc. VAR recently received the U.S. Food and Drug Administration (FDA) registration for its Claymount Optica 20 and Optica 40 collimators. Claymount Optica, part of Varian’s Imaging Component business, are used to narrow the focus of X-ray beams in film-based and digital radiography systems.
As a result, the device helps in rapidly reducing radiation exposure to patients and also achieves improved image quality.
The collimators are attached to the Linatron Systems along with the primary beam path for specific applications. The Optica Collimators are manually operated with a range of filtration options, which are used in film-based and digital radiography for better quality image.
Varian is confident that its Optica collimators will be a one-stop solution for patients. Moreover, the increasing uptake of these products will drive revenues at Imaging Component segment.
VARIAN MEDICAL Price and Consensus
VARIAN MEDICAL Price and Consensus | VARIAN MEDICAL Quote
Meanwhile, Varian is planning to spin-off the Imaging Components business as a new, stand-alone public company through a tax-free distribution to stockholders in a transaction anticipated to be completed by the end of 2016.
Focus on Portfolio Expansion
Of late, Varian has been focusing on expanding its product portfolio. The company is addressing both the tier1 and the mid-tier markets through its Edge, Truebeam and VitalBeam products. The company is also winning contracts, not only in the Americas but also in international markets, which is a huge positive.
Additionally, Varian believes that the Proton therapy system has massive growth opportunities despite a smaller financing base. Varian noted that growing governmental spending will reduce financing problems related to Proton therapy systems over the long haul. Moreover, increasing demand for smaller units is a positive for the system.
Nevertheless, intensifying local competition is the primary headwind. The weakness in the Imaging Components business is also a concern, at least for the near term.
Key Picks in the Sector
Varian Medical carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the medical sector are Masimo Corporation MASI, Novadaq Technologies Inc. NVDQ and Mesa Laboratories Inc. MLAB. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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