Varian Medical Systems

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Varian Medical Systems

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... Systems segment Radiation Therapy X-ray Products segment Other Growth Emerging Markets Strategic Partnership Proton Therapy PowerPoint Presentation ... – PowerPoint PPT presentation

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Title: Varian Medical Systems


1
Varian Medical Systems
  • By KJ Neish

2
History
  • Originally incorporated in 1948 as Varian
    Associates, Inc.
  • Changed name to Varian Medical Systems, Inc. in
    April 1999
  • Fiscal Year-end Sept. 28, 2012
  • 1Q results Jan. 23, 2013

3
The Company
  • Oncology Systems (78 2012 revenues)
  • X-ray (18)
  • Other (4)

4
Oncology Systems segment
  • Provides medical devices and software for
    treating cancer
  • Linear accelerators
  • Brachytherapy afterloaders
  • Simulation and verification software
  • Hospitals, cancer care clinics, government
    institutions, research facilities, doctors
    offices

5
Radiation Therapy
  • The use of focused energy to kill cancer cells
  • Used alone or in combination with surgery or
    chemotherapy
  • Different forms of treatment
  • The most common form involves delivering x-ray
    beams
  • 65 increase in new cases of cancer from 2008 to
    2030

6
X-ray Products segment
  • Design and manufacturer of x-ray components
  • X-ray tubes
  • Flat panel detectors
  • Toshiba Corp., Hitachi Medical Corp., GE
    healthcare
  • InfiMed acquisition
  • 20-25 market share

7
Other
  • Ginzton Technology Center (GTC)
  • Security and Inspection (SIP)
  • Varian Particle Therapy (VPT)

8
Growth
  • Emerging markets
  • Strategic global partnership with Siemens Medical
    Systems
  • Commercialization of proton therapy
  • Product innovation

9
Emerging Markets
  • 2 linear accelerators/million. US has 13
  • China
  • India
  • Regulatory clearance in India
  • Population over 1 bil.
  • 1 mil. new cases of cancer each year
  • Brazil
  • Competing for public tender of more than 80 units
  • Reverse auction bidding
  • Announced in Jan-Feb

10
Strategic Partnership
  • Mutually market each other's products
  • Co-develop opportunities

11
Proton Therapy
  • Latest innovation in the radiotherapy field
  • Proton particles
  • Less invasive, better targeting
  • Vital organs less at risk
  • 70 reduction in radiation exposure
  • Large-scale construction projects
  • Emory University and University of Maryland

12
  • -National Association for Proton Therapy

13
Product Innovation
  • EDGE
  • 510(k) clearance
  • Integrates technology with tools for real-time
    imaging and tracking
  • Launched in Nov
  • Lung, liver, and pancreatic cancer

14
Comparable Analysis (0)
15
Discounted Cash Flow (100)
  • Revenue
  • Smaller margins
  • SGA increase as a revenue
  • 4 intermediate growth rate
  • Cost of debt calculated based on last issuance
  • 9.35 undervalued

16
Beta
17
Questions
18
  • BUY
  • For Tall Firs and Svigals portfolio
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