Oncology and X-Ray products company,
Varian Medical Systems
) has won the U.S. Food and Drug Administration (FDA) 510(k)
clearance for its Vitesse software. The tool is intended for
providing high-dose-rate (HDR) brachytherapy therapy for
prostrate cancer treatment, using real-time ultrasound
This advanced version of Vitesse lowers the complexities of
planning and performing the treatment, as well as reduces the
time required, thereby enhancing operating room efficiency.
Additionally, the device from the larger Oncology Systems has
also received the CE Mark approval.
Varian is a leading manufacturer of integrated radiotherapy
systems for cancer treatment, and a premier supplier of X-ray
tubes for diagnostic imaging applications. The company operates
in a technology-driven environment where success depends on the
use of new technology, product development and upgrades. In the
radiation oncology market, Varian competes with
The company is poised to increase its market share in
radiation oncology. It currently enjoys a healthy demand for its
coveted TrueBeam technology, which has meaningfully contributed
to its net order oncology growth.
Revenues from Oncology Systems increased 8% year over year to
$524.3 million in the first quarter of fiscal 2013. Following the
green signal from the FDA, the Vitesse program should further
boost growth in the segment.
Moreover, Varian continues to post decent results despite the
contagion of economic problems in Europe and sustained softness
in certain end markets. It enjoys a strong balance sheet marked
by low debt and sizeable cash. The company also periodically
deploys capital to boost investor confidence via share
However, Varian competes with larger players in a
technology-intensive industry. Further, uncertainties stemming
from health care reform and a still weak hospital capital
spending environment across many developed countries, especially
in Europe, are matters of concern.
The stock carries a Zacks Rank #3, which translates into a
short-term Hold rating.
Cantel Medical Corp.
) with Zacks Rank #1 (Strong Buy) are expected to do well in the
medical instruments industry.
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