FDA Clears Varian's Vitesse - Analyst Blog
January 29 2013 - 12:08PM
Zacks
Oncology and X-Ray products company, Varian Medical
Systems (VAR) has won the U.S. Food and Drug
Administration (FDA) 510(k) clearance for its Vitesse software. The
tool is intended for providing high-dose-rate (HDR) brachytherapy
therapy for prostrate cancer treatment, using real-time ultrasound
guidance.
This advanced version of Vitesse lowers the complexities of
planning and performing the treatment, as well as reduces the time
required, thereby enhancing operating room efficiency.
Additionally, the device from the larger Oncology Systems has also
received the CE Mark approval.
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 Accuray
(ARAY).
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.
Revenues from Oncology Systems increased 8% year over year to
$524.3 million in the first quarter of fiscal 2013. Following the
green signal from the FDA, the Vitesse program should further boost
growth in the segment.
Moreover, Varian continues to post decent results despite the
contagion of economic problems in Europe and sustained softness in
certain end markets. It enjoys a strong balance sheet marked by low
debt and sizeable cash. The company also periodically deploys
capital to boost investor confidence via 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 matters of concern.
The stock carries a Zacks Rank #3, which translates into a
short-term Hold rating. Cantel Medical Corp. (CMN)
and Cyberonics Inc. (CYBX) with Zacks Rank #1
(Strong Buy) are expected to do well in the medical instruments
industry.
ACCURAY INC (ARAY): Free Stock Analysis Report
CANTEL MED CORP (CMN): Free Stock Analysis Report
CYBERONICS INC (CYBX): Free Stock Analysis Report
VARIAN MEDICAL (VAR): Free Stock Analysis Report
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