Varian Medical Systems
) recently reported that Da Nang Cancer Hospital of Vietnam will
avail from the company a radiotherapy configuration capable of
providing intensity-modulated radiotherapy treatment (IMRT). The
system will accurately target tumors to reduce collateral damage to
surrounding healthy tissue. The installation has come about
following coordination between Varian, the U.S. Embassy in Vietnam
and local partners.
The Da Nang Cancer Hospital is a charitable entity with 500
beds. Its IMRT set-up, the first in Central Vietnam, includes a
modern Clinac linear accelerator and other essential features. The
hospital estimates that it will utilize Varian's equipment for
cancer treatment later in 2012.
The placement of Varian's cancer equipment at Da Nang was backed
by the U.S. Department of Commerce's Trade Advocacy Center.
In addition, senior Government officials supported the joint
endeavor between Varian Medical Systems and Da Nang Cancer
According to the International Agency for Research on Cancer,
Vietnam faces an incidence of almost 112,000 fresh cases of cancer
each year. The country is witness to about 82,000 cancer-related
mortalities every year.
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
Varian 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.
Moreover, Varian enjoys a strong balance sheet marked by low
debt and sizeable cash. The company uses a part of its healthy cash
flow for share repurchases.
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 significant challenges.
We are currently 'Neutral' on Varian. The stock retains a Zacks
#4 Rank, which translates into a short-term Sell rating.
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