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Varian Medical (VAR) Collaborates With Korea-Based Hospital

Zacks Equity Research

Varian Medical Systems, Inc.’s VAR recent tie-up with Korea University Medical Center Anam Hospital led to the first treatment by the company’s flagship Halcyon system in the country. Notably, Varian Medical’s ARIA oncology information system and Eclipse treatment planning software will also be used by the hospital.

Following the announcement, shares of this Zacks Rank #2 (Buy) company rose 3% to $139.12 at close.

The Halcyon radiotherapy treatment system has been designed to offer cost-effective cancer care, streamlining every aspect of image-guided volumetric intensity modulated radiotherapy. Meanwhile, the ARIA oncology information system is a comprehensive information and image management solution that lets patients oversee all aspects of oncology care. Eclipse is an integrated treatment planning system, supporting a variety of treatment options including protons, electrons, external beam, low-dose-rate brachytherapy and cobalt therapy.

Operations in Asia

Varian Medical enjoys a significant presence in Asia.

In the last reported quarter, orders in Southeast Asia and Korea nearly doubled. Notably, the company received two Halcyon orders from Korea. Further, APAC revenues shot up 7% on a year-over-year basis.

In March, the company signed a three-year agreement with Tata Trust for increasing patient access to advanced radiation therapy treatments in India. (Read More: Varian & Tata Trust Tie Up to Boost Radiotherapy in India)

Last December, the company’s Halcyon radiotherapy system, which are manufactured in China, received approval from the United States Trade Representative for its exclusion from Section 301 tariffs. (Read More: Varian Medical's Halcyon Excluded From Trade Tariffs)

Additionally, the Halcyon system was granted approval by the China National Medical Product Administration, expanding its global availability. (Read More: Varian Medical's Halcyon Gets NMPA Approval in China) Notably, the system was introduced to the China market earlier this year.

Market Prospects

The Newsmates suggests that the global radiation therapy equipment market will see a CAGR of 6.4% between 2019 and 2023.

Another key player in the space is Accuray Incorporated ARAY, whose subsidiary Accuray Asia recently formed a joint venture with CNNC High Energy Equipment Co., a subsidiary of China Isotope and Radiation Corporation.

Price Performance

Over the past year, shares of Varian Medical have rallied 14.1% compared with the industry’s 12.6% gain. The current level is also higher than the S&P 500 index’s 7.9% rise.

Other Key Picks

Other top-ranked stocks in the broader medical space are Veeva Systems VEEV and DexCom. Inc. DXCM. Notably, each of these stocks currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Veeva Systems’ long-term earnings growth rate is estimated at 14.8%.

DexCom’s second-quarter earnings per share are projected to grow 120%.

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