Varian Medical Systems, Inc. (VAR)

NetscribeMedDevs (93.80) Submitted: 3/08/07 7:06 AM : Start Price: $45.60 VAR Score: 21.96

Varian Medical Systems is engaged in manufacturing and selling of integrated cancer therapy systems worldwide. Under its Oncology Systems segment, it designs, manufactures, sells and services hardware and software products for treating cancer with radiation. Its X-ray products segment manufactures and sells X-ray imaging components and subsystems namely X-ray tubes and flat panel detectors. Oncology Systems generate 84% of revenues, whereas X-ray products and others comprised 16% of revenues for year ended September 2006.





Intensity Modulated Radiation Therapy (IMRT) has become a well-accepted standard of treatment for cancer and more clinics every year, from university hospitals to local community clinics, continue to adopt treatments. The radiation oncology market is growing globally, as the annual cancer rates are projected to increase by 50% across the world to 15 million cases by 2020. As per World Cancer Report, the predicted sharp increase will be mainly due to trends in smoking prevalence and the growing adoption of unhealthy life styles. This augurs well for company’s Oncology products particularly in the international markets, which are under-equipped with radiation therapy systems to address the growing cancer incidence.





Very recently the company completed acquisition of ACCEL Instruments GmbH, supplier of scientific research instruments and proton therapy systems for cancer treatment. The company has an opportunity to build a strong business model, based on improving cancer care with a clinically practical and affordable system for proton therapy. The shares of Varian Medical Systems offers good opportunity for long term investors as the rise in cancer cases, coupled with increase in sophistication of new treatment processes, generates demand for company products.

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