Varian Medical Systems ( VAR ) plans to launch its ProBeam Compact proton therapy system at the annual meeting of the Particle Therapy Co-Operative Group (PTCOG 53). Proton therapy is used for irradiating diseased tissue, mainly in the treatment of cancer.
The external beam Proton therapy is superior to other external beam radiotherapies because it is capable of precisely locating the radiation dosage causing lesser side-effects to surrounding tissues unlike conventional radiotherapy.
However, Proton therapy is historically very expensive compared with other forms of external beam radiotherapy. VAR's compact and single-room ProBeam Compact proton therapy system mitigates the cost issue and minimizes the space requirements, making it more feasible and affordable to cancer treatment centers.
The installation of VAR's ProBeam Compact involves a space-efficient cyclotron, Dynamic Peak scanning technology for intensity-modulated proton therapy (IMPT), a fully rotational gantry, robotic patient positioning tools, and a suite of motion management tools.
VAR's ProBeam Compact uses an integrated 2D and 3D imager for real-time image guidance. It is also capable of planning and managing treatments using VAR's Eclipse and ARIA software systems.
The new Proton therapy system uses the same interface used by VAR in its TrueBeam platform. As a result, operators of VAR's other radiotherapy systems will face no problem while upgrading to ProBeam system.
VAR recently installed the new Proton therapy system at Scripps Proton Therapy Center in San Diego, CA. Prior to that; the company has installed the system at the Rinecker Proton Therapy Center in Munich, Germany and the Paul Scherrer Institute in Switzerland.
VAR has several other contracts to install the new Proton therapy systems at seven other centers. These centers include University of Maryland in Baltimore; Emory University in Atlanta, GA; Cincinnati Children's Hospital in OH; University of Texas Southwestern in Dallas; KFMC-King Fahd Medical City in Saudi Arabia; PTC St. Petersburg in Russia; and National Taiwan University in Taipei.
For the second quarter of fiscal 2014 ended Mar 28, 2014, VAR posted flat adjusted earnings per share of $1.04 (including a 16 cents charge related to a previously announced settlement of patent litigation) compared with the same quarter in the prior fiscal year.
However, second quarter earnings edged past the Zacks Consensus Estimate by a couple of cents. With this, VAR also met its own guidance of earnings per share for the quarter in the range of $1.00 to $1.04.
Revenues in the quarter inched up 1.3% to $778.5 million, beating the Zacks Consensus Estimate of $775 million. Thanks to the strong gross orders in Imaging Components segment and proton business as well as mid-single-digit growth in Oncology Systems segment.
For fiscal 2014, VAR reiterated its revenues growth in the range of 6 to 8%. The company also retained its earnings per share guidance between $4.22 and $4.34 for the year, including the 16 cents charge for the patent litigation settlement. The current Zacks Consensus Estimate of $4.28 lies within the guided range.
Currently, VAR carries a Zacks Rank #3 (Hold). Some better-ranked medical instrument stocks that currently worth a look include Alphatec Holdings, Inc. ( ATEC ), RTI Surgical Inc. ( RTIX ), and Edwards Lifesciences Corp. ( EW ). Alphatec Holdings and RTI Surgical sport a Zacks Rank #1 (Strong Buy), while Edwards Lifesciences carries a Zacks Rank #2 (Buy).
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