Leading integrated radiotherapy systems maker Varian Medical Systems (VAR) will be exhibiting its new X-ray tubes and PaxScan flat panel image detectors at the ongoing European Congress of Radiology (“ECR”) annual meet in Vienna, Austria. ECR is the annual meeting of the European Society of Radiology (“ESR”) and is the largest radiological meeting in Europe.
Varian plans to showcase the new M-1500, its first X-ray tube designed specifically for advanced mammography applications. The company will also feature the new PaxPower FP X-ray tube, geared for interventional procedures and portable surgical computed axial tomography (“CT”) systems.
Moreover, Varian will highlight its latest PaxScan 3024M flat panel detector developed for full field digital mammography. Its compact structure with inherently quick image acquisition capacity permits medical practitioners to take pictures near the chest with spontaneous outcome.
In addition to the M-1500, PaxPower FP and PaxScan 3024M, other tubes and flat panel detectors/technology will also be showcased at the ECR meeting. Varian believes that the new products will offer good value by combining enhanced image quality, higher patient throughput and greater cost-efficiency.
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. In the radiation oncology market, the company competes head-to-head with Accuray Incorporated (ARAY) and TomoTherapy (TOMO).
Varian’s X-ray products segment is a distinct business unit, set apart from its oncology products business. The company offers over 400 categories of medical and industrial X-ray tubes, besides its PaxScan series of silicon flat panel detectors for digital radiography or imaging without using films.
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.
The company’s revenues and profit leaped 7% and 22% year over year, respectively, in first-quarter fiscal 2011 led by double-digit increase in net order for its X-Ray products. Based on the healthy first quarter results, the company has lifted its earnings per share target for fiscal 2011.
Varian feels that strong order activity at its oncology systems segment as well as current momentum in the X-ray products business will set the stage for better performance in 2011.
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, backed by a short-term Zacks #3 Rank (Hold).
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