Varian Medical Systems, Inc. VAR recently announced that it has received an order for 20 additional TrueBeam machines from U.K.-based National Health Service (NHS) Supply Chain. The initial deal, penned this September, included 10 PerfectPitch treatment couches and 50 licenses for Varian's RapidArc and Eclipse software systems.
This latest agreement is the extension of a successful tie-up between Varian and NHS. The entities had previously inked similar deals in 2013 and 2014 concerning 30 TrueBeam systems.
Varian’s TrueBeam platform has been specifically designed to treat tumors with beams of high speed and precision. Varian currently enjoys a healthy demand for its TrueBeam technology, which has significantly contributed to its Oncology order growth. In the fourth quarter of fiscal 2015, Oncology System sales increased 1.8% from the year-ago quarter to $632.6 million, while gross orders increased 0.1% (up 5% at cc) to $918.7 million.
Moreover, Varian continues to focus on gaining a stronger foothold in the global Oncology market on the back of new products and increased clients. In October this year, Varian announced FDA approval as well as CE Mark for its VitalBeam platform – a modular, high-throughput radiotherapy system which is incorporated with the TrueBeam radiotherapy system.
The VitalBeam system will allow physicians to administer radiation doses precisely and complete image-guided treatments quite fast – in just about 2 to 4 minutes – with the help of advanced capabilities like RapidArc. Varian has already received orders from various cancer treatment centers across the U.S. and Europe for VitalBeam.
This October, Varian also received CE Mark for its ProBeam proton therapy – a cancer treatment which uses a beam of protons to treat affected tissues. The therapy is usually more efficient than conventional radiation because it allows precise delivery of beams. Proton therapy also has fewer side effects because it does not necessarily expose the healthy tissues to radiation.
We believe Varian is poised to gain market share in radiation oncology, on the back of new product launches and subsequent contract wins.
Zacks Rank & Stocks to Consider
Currently, Varian carries a Zacks Rank #3 (Hold). Better-ranked stocks in the medical sector are Masimo MASI, Fluidigm Corp. FLDM and Olympus Corp. OCPNY. All the stocks sport a Zacks Rank #1 (Strong Buy).
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