China Relies on Varian

Varian Medical Systems (VAR) recently reported that it supplied the latest GammaMed brachytherapy afterloader to Jilin University No. 1 Hospital located in Jilin China. This sophisticated device is the first high dose rate afterloader supplied by Varian to a medical facility in that country. Jilin University No. 1 Hospital, the leading oncology care giver in the region, will soon offer cancer treatment using the new equipment.

Under brachytherapy, cancer is treated by positioning a radioactive substance directly into, or adjacent to, the area in need of treatment, thereby enabling medical practitioners to deliver a solid dose with least possible adverse effect on near-by healthy tissue.

Brachytherapy has been utilized to treat different cancers such as those of the cervix, prostate, breast, skin, esophagus, head and neck and several other forms of the disease. Medical providers at Jilin stated that their initial brachytherapy treatment would concentrate on rectal and cervical cancer cases.

Varian is the world’s leading manufacturer of integrated radiotherapy systems for treating cancer and a premier supplier of X-ray tubes for diagnostic imaging applications. In the radiation oncology market, the company competes with Accuray Incorporated (ARAY) and TomoTherapy (TOMO).

Varian’s X-ray products segment is a distinct strategic business unit, set apart from its oncology products business. The company offers over 400 categories of medical and industrial X-ray tubes, besides its PaxScan series of silicon flat panel detectors for digital radiography or imaging without using films.

Varian is poised to increase its market share in the radiation oncology market. The company is currently enjoying robust demand for its RapidArc radiotherapy technology, which is meaningfully contributing to its oncology net order growth. Orders for its TrueBeam system, launched in April 2010, are encouraging.

Varian’s revenues and profit increased 7% and 22% year over year, respectively, in first-quarter fiscal 2011 led by double-digit growth in net orders for its X-ray products. Based on the healthy first quarter results, the company has lifted its earnings per share target for fiscal 2011.

Varian feels that strong order activity at its oncology systems segment as well as current momentum in the X-ray products business will set the stage for better performance in fiscal 2011.

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