Varian Gains Ground On New Applications, Grows In Australia
Zacks Investment Research | Dec 17, 2017 08:22PM ET
Varian Medical Systems (NYSE:VAR) recently announced that Australia-based Peter MacCallum Cancer Centre (also known as Peter Mac) has selected the company’s flagship Eclipse treatment planning system to replace the existing cancer treatment platform across all sites. Notably, Varian registered this order in the fourth quarter of fiscal 2017.
The Eclipse treatment planning system is an integrated and comprehensive platform, which supports radiation treatment such as photon, FFF beams, protons, electrons, external beams, low-dose-rate brachytherapy and cobalt therapy. The system creates optimized radiotherapy treatment plan for patients.
The platform is supposedly the first Microsoft (NASDAQ:MSFT) Azure-hosted system to be deployed in Australia. In fact, the latest development includes the introduction of Varian’s Velocity platform to Peter Mac for adaptive radiotherapy.
Newer Applications Gain Prominence
Varian continues to witness strong market acceptance of its software solutions, particularly for Eclipse treatment planning and ARIA oncology information systems. Other new applications such as RapidPlan, multi-criteria optimization, InSightive analytics solution, 360 Oncology cloud-based cancer operating platform and the Velocity longitudinal cancer imaging solution have been fortifying the company’s foothold.
The launches of Halcyon and HyperArc platforms in 2017 are noteworthy. The platforms are used for cancer treatment through image-guided volumetric intensity modulated radiotherapy.
Varian operates in a technology-driven environment where success depends on innovation and frequent product updates. The company has been successful on the R&D front, evident from year-over-year expansion in its top line. The company’s other varied offerings include TrueBeam and Edge platforms, Qumulate QA and RapidPlan knowledge-based treatment planning. We believe that Varian’s innovative product pipeline will continue to drive overall growth over the long term.
Market Potential
A research report by Markets And Markets suggests that the global radiotherapy market is projected to reach a worth of $9.47 billion by 2022, up from $6.81 billion in 2017, at a CAGR of 6.8%.
Further, Global Information Inc. suggests that the radiotherapy markets in APAC are expected to reach a worth of $2.34 billion by 2024 at a CAGR of 11.5% in the 2017-2024 period. Per the report, APAC has been segregated into 11 geographical divisions, wherein Australia is a major contributor to radiotherapy revenues. Varian has been the key player in the region, followed by Elekta AB (OTC:EKTAY) and Accuray, Inc (NASDAQ:ARAY) .
International Growth in Focus
In November, Varian announced plans of opening a facility in Jundiai, Brazil, reflecting long-term commitment and partnership with the Brazilian Ministry of Health. The facility will provide access to advanced radiotherapy treatment in Latin America, particularly in the Brazilian oncology market.
The development closely follows the receipt of Shonin approval from the Japan Ministry of Health, Labor and Welfare to market the Varian Halcyon system.
Price Performance
Year to date, Varian has outperformed the Zacks Investment Research
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