Oncology and X-Ray products company
Varian Medical Systems
) recently revealed that the Clínicas Oncológicas Integradas
(GRUPO COI) is the first cancer treatment facility in South
America to order a TrueBeam system for treating tumors. The
equipment to be placed by December 31, 2012 will be housed at a
Rio de Janeiro site of the group. GRUPO COI provides outpatient
and clinical facilities from two sites in Rio de Janeiro.
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. Varian's TrueBeam was designed to
treat tumors with beams of high speed and precision. It
incorporates several technological innovations such as patient
positioning and managing his/her motion. Given its high intensity
nature, TrueBeam can dispense strong dosage over twice as fast as
that possible with earlier equipment.
Moreover, Varian enjoys a strong balance sheet marked by low debt
and moderate cash. The company from time to time uses a part of
its healthy cash flow for share repurchases.
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
We are currently Neutral on Varian. The stock retains a Zacks #3
Rank, which translates into a short-term Hold rating.
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