Varian (VAR) to Equip 7 Centers in Mexico, Expand in Oncology

The Instituto Mexicano del Seguro Social (IMSS) has selected VarianMedical Systems, Inc.VAR to equip seven treatment centers in Mexico with modern radiotherapy treatment systems. This includes the Edge system for image-guided stereotactic radiosurgery.

Varian and EYMSA will provide the Edge system and six VitalBeam systems. varian will provide a full suite its treatment planning and oncology information to manage cancer patient workflow at each of the sites. Notably, EYMSA is Varian's long-standing distributor in Mexico.

Per the company, the new Edge radiosurgery system will allow physicians to treat tumors noninvasively from outside the body through carefully shaped high-energy X-rays. The VitalBeam systems offer high-quality, high-throughput radiation therapy at a low cost. This will enable treatment centers to expand clinical capabilities and serve more patients.

Developments in Oncology

Varian is striving to boost the Oncology Segment. In the last quarter, oncology revenues increased 14% on a year-over-year basis.

In this regard, Varian recently acquired Montreal-based privately-held Evinance Innovation, Inc. - a clinical decision support (CDS) software company.

The company initiated its first education workshop for radiotherapy practitioners in Algeria. Recently, the company announced that the first cancer patient was treated using its HyperArc High Definition Radiotherapy (HDRT) - a new type of radiosurgery treatment - at Sacro Cuore Don Calabria Cancer Care Center in Negrar-Verona, Italy. In the fourth quarter, revenues inched up 1% at CER in this segment.

Of late, the company has been focusing on expansion in Brazil. Recently, Varian announced the receipt of ANVISA registration for the Halcyon system in Brazil.

The company has announced plans of opening a new facility in Jundiai, Brazil, which indicates its long-term commitment and partnership with the Brazilian Ministry of Health. The facility has been fully-equipped to provide Varian Trilogy linear accelerator for hands-on training to physicians.

Market Prospects

According to a report by Markets and Markets, the global radiotherapy market is projected to reach a worth of $9.47 billion by 2022, at a CAGR of 6.8%. Considering the bountiful opportunities in this niche space, we believe that the company's latest development is a strategic fit.

With such prospects, Varian's latest developments in the Oncology segment buoy optimism. This is also in line with the company's effort to establish itself as one of the premier cancer care providers.

Share Price & Estimate Revision Trend

Over the past six months, Varian's shares have outperformed the industry in terms of price. The stock has returned 17.5%, comparing favorably with the industry's rally of just 12.4%.

The current estimate revision trend is favorable. For the current year, three estimates moved north compared with no movement in the opposite direction over the last two months. As a result, the Zacks Consensus Estimate for 2018 has risen 2.1% to $4.31 per share.

Zacks Rank & Other Key Picks

Varian carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks in the broader medical sector are PerkinElmer PKI , Bio-Rad Laboratories BIO and athenahealth, Inc. ATHN .

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.

Bio-Rad Laboratories sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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