Varian Proton Therapy Cleared - Analyst Blog

Leading integrated radiotherapy systems maker Varian Medical (VAR) has secured the approval of the U.S. Food and Drug Administration (FDA) for its novel Proton Therapy System, which delivers protons for precision radiotherapy of lesions, tumors and conditions suitable for radiation treatment. It is the first system capable of delivering precise intensity modulated proton therapy (“IMPT”) leveraging pencil beam scanning technology.

Proton therapy is a type of radiation treatment that uses beams of protons for delivering more targeted and precise doses (compared to conventional external beam radiotherapy delivered using photon beams) to destroy malignant tumors while sparing surrounding healthy tissues and organs. More than 50,000 people globally have been treated with proton therapy.

Varian's IMPT enables the physicians to deliver doses more precisely, thereby reducing exposure of healthy tissues during the course of treatment. The scanning beam technology enables IMPT by modulating dose levels on a spot-by-spot basis throughout the treatment site. IMPT's superior dose distributions properties give it a clear advantage over traditional external beam radiotherapy.

Varian is marketing the Proton Therapy System under the ProBeam moniker. The company has been chosen as the preferred vendor for several proton therapy projects, including the Scripps Proton Therapy Center which is currently under construction in San Diego with treatments  slated to commence starting 2013.    

Varian is the world's leading manufacturer of integrated radiotherapy systems for treating cancer 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, new product development and product upgrades. In the radiation oncology market, the company competes head-to-head with Accuray Incorporated (ARAY) and TomoTherapy (TOMO).

Varian is poised to increase its market share in the radiation oncology market. The company is currently enjoying a healthy demand for its coveted RapidArc radiotherapy technology, which is meaningfully contributing to its oncology net order growth.

However, uncertainties stemming from health care reform and a still weak hospital capital spending environment provide headwinds. We currently have a Neutral recommendation on Varian. The stock currently retains a Zacks #4 Rank, which translates into a short-term Sell recommendation.

 
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