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Varian's AI-Driven Ethos Solution to Boost Global Cancer Care

Zacks Equity Research

Varian Medical Systems, Inc. VAR recently announced the launch of Ethos therapy, an adaptive intelligence solution, with a view to transform cancer care, globally. The latest development is expected to significantly drive Varian’s core Oncology Systems segment.

Notably, Ethos therapy is an AI-driven solution designed to deliver adaptive radiation therapy treatment. The solution received CE mark in recent times and is currently awaiting 510(k) approval. For investors’ notice, adaptive radiation therapy is a process where treatment is adapted to account for internal anatomical changes. It provides the ability to alter the treatment plan.

How Does Varian Stand to Gain?

The recent launch of Ethos therapy is likely to boost Varian’s core Oncology Systems segment, which accounted for 94.2% of the last-quarter revenues.

Ethos therapy’s streamlined workflow helps physicians deliver adaptive therapy treatment in a typical 15-minute timeslot. The use of multimodality images (MR, PET, CT) on Varian's latest treatment delivery technology provides fast imaging and treatment delivery without compromising on quality.

Additionally, MarketWatch predicts the global radiotherapy solutions market will reach $7.5 billion by 2022 at a CAGR of more than 6%. Rising cases of cancer and a growing grey populace currently drive the market.

Hence the latest development is a well-timed one for the MedTech giant.

AI in Healthcare

AI’s contribution in healthcare is stupendous. Notably, AI and big data have been revolutionizing the industry through increasing use of Electronic Health Records and Electronic Medical Records which help capture real-time patient data for better outcomes. Key players like Cerner Corporation CERN and Allscripts Healthcare dominate the headlines in this respect. Even non-healthcare bigwigs like Apple AAPL Google, Amazon and IBM have been eyeing the AI part of the healthcare and device market of late, courtesy of its bountiful prospects.

Additionally, the latest FDA action on SaMD (Software as a Medical Device) underpins the fact that investors should focus more on AI-driven healthcare stocks which have lucrative long-term prospects.

Price Performance

Over the past year, shares of the Zacks Rank #3 (Hold) company have rallied 6.6% against the industry’s 4.7% decline.

A Key Pick

A better-ranked stock in the broader medical sector is Masimo Corporation MASI.

Masimo’s long-term earnings growth is expected at 20.5%. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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