Varian Medical Systems, Inc. VAR recently partnered with Google Cloud to develop an advanced artificial intelligence (AI) based diagnostic platform to lend support to the battle against cancer. Varian and Google Cloud AI have undertaken a deployment endeavor, utilizing Neural Architecture Search (NAS) technology through Google Cloud AI Platform, to build AI models for organ segmentation.
Notably, organ segmentation is the procedure of determining the organs and tissues in diagnostic images, which should be targeted or protected during a course of radiation therapy. This, in turn, can hinder the cancer treatment clinical workflow, as the aforementioned procedure is a labor-intensive one and a clinician might spend hours per patient because of the same.
This collaboration is likely to boost Varian’s Oncology systems, which is the company’s largest operating business segment.
Significance of the Collaboration
Per management, Varian remains committed to creating a world where there will be no fear of cancer by delivering superior-quality cancer care, which will be customized and optimized for each patient, and will be accessible everywhere.
In fact, the company has been focusing on Intelligent Cancer Care, wherein routine or repetitive tasks in the radiation oncology workflow can be automated by utilizing smart algorithms, machine learning and AI.
Hence, this partnership will enable Varian to accelerate its efforts in this space.
Per a report by Allied Market Research, the global healthcare IT (HCIT) market estimates that the market for HCIT solutions and services was $125 billion in 2015 and is projected to reach $297 billion by 2022, witnessing a CAGR of 13.2%.
Growing demand for quality healthcare services and solutions together with patient safety & care, proactive supportive government initiatives, and increase in acceptance of mHealth & telehealth practices have been driving this market. Further, growing adoption of smartphones is bolstering healthcare IT market growth.
In December 2020, Varian inked a three-year Memorandum of Understanding (MoU) with Yonsei Cancer Center, Yonsei University Health System to partner on research and development projects in the field of radiation therapy and oncology. Notably, Yonsei Cancer Center is Korea's first cancer hospital (founded in 1969) and one of the leading cancer treatment centers in the world.
In November, the company inked a new $10 million investment and partnership agreement with COTA, Inc. — a Boston-based curator of clinical data in oncology. Both companies will collaborate to equip cancer clinics with data analytics and decision support tools, using real-world evidence to help guide clinical and operational decisions as well as drive cost-efficient patient outcomes.
Shares of this currently Zacks Rank #3 (Hold) company have gained 60.7% compared with the industry’s rally of 35.3% in a year’s time.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Hologic, Inc. HOLX, Hill-Rom Holdings, Inc. HRC and Cantel Medical Corp. CMD, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic’s long-term earnings growth rate is expected at 15.4%.
Hill-Rom Holdings’ long-term earnings growth rate is estimated at 7.3%.
Cantel Medical’s long-term earnings growth rate is estimated at 19%.
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