U.S. Markets close in 2 hrs 2 mins

Varian Medical's (VAR) ProBeam Installed in China's HIMC

Zacks Equity Research

Varian Medical Systems, Inc. VAR recently announced the installation of cyclotron for the Varian ProBeam proton therapy system at Hefei Ion Medical Center (“HIMC”) in China. On completion, the HIMC will feature three proton therapy treatment rooms with full 360-degree rotational gantries.

 

Following the announcement, shares of the Zacks Rank #2 (Buy) company has risen 0.6% to $141.97 at close.

 

This fortifies the MedTech giant’s position in the global proton therapy market.

 

More on Proton Therapy

 

Cyclotron is a core piece of equipment in the ProBeam proton therapy system. Notably, the company’s ProBeam is the world's first commercially available pencil beam scanning system, which is the most precise form of proton therapy available.

 

The platform has seen worldwide developments in recent times.

 

Notably, the company completed clinical handovers to Emory Proton Therapy Center in Georgia, HollandPTC in the Netherlands and Christie Hospital in the United Kingdom. These represent a major recurring revenue stream for the Proton business. Flash and ProBeam 360, Varian’s new smaller footprint Proton Systems, are also seeing rising momentum.

 

In January, Varian Medical announced the installation of the gantry for the Varian ProBeam Compact single-room proton therapy system at the new oncology center at Biopolis, an international biomedical research hub in Singapore. (Read More: Varian Medical's ProBeam Compact Picked by Biopolis)

 

Market Prospects

 

Per HIMC management, more than 10 thousand people are diagnosed with cancer every day in China.

 

Moreover, Technavio analysts expect the global proton therapy market to see a CAGR of more than 9% between 2018 and 2022. Advantages of proton therapy over standard radiation therapies currently fuel demand for proton therapy around the world.

 

Hence, the developments have been well-timed for Varian Medical.

 

Apart from Varian Medical, another key player who enjoys a solid presence in China is Accuray Incorporated ARAY. In recent times, the company’s subsidiary, Accuray Asia, recently formed a joint venture with CNNC High Energy Equipment Co., a subsidiary of China Isotope and Radiation Corporation, to manufacture and sell radiation oncology systems in China.

 

 

Price Performance

 

Over the past year, shares of Varian Medical have rallied 18.4% compared with the industry’s 9.7% rise. The current level is also higher than the S&P 500 index’s 8.6% rally.

 

Other Key Picks

 

Other top-ranked stocks in the broader medical space are Stryker Corporation SYK and Penumbra PEN, each carrying a Zacks Rank of 2.

 

Stryker’s long-term earnings are expected to grow 10%.

 

Penumbra has a long-term earnings growth rate of 20.9%.

 

Today's Best Stocks from Zacks

 

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

 

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Penumbra, Inc. (PEN) : Free Stock Analysis Report
 
Varian Medical Systems, Inc. (VAR) : Free Stock Analysis Report
 
Accuray Incorporated (ARAY) : Free Stock Analysis Report
 
Stryker Corporation (SYK) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research