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About Varian Medical Systems, Inc.

Varian Medical Systems develops, manufactures, and services hardware and software products for the treatment of cancer with radiotherapy, stereotactic radiosurgery, stereotactic body radiotherapy, proton therapy, and brachytherapy. Products include linear accelerators, simulators, and data management software, primarily for use in cancer radiotherapy. Its Halcyon line of treatment systems was launched and approved for use in the US and Europe during 2017; the company has already sold more than 180 Halcyon systems. Also in 2017, Varian spun off its X-ray unit, which makes imaging subsystems and X-ray-generating tubes, into a new public company named Varex Imaging.

Operations

Varian operates in two primary segments -- Oncology Systems and Proton Solutions (formerly Varian Particle Therapy).

The Oncology Systems segment makes hardware and software products for treating cancer with conventional radiotherapy along with products for advanced treatments, including fixed field intensity-modulated radiation, volumetric modulated arc therapy, and stereotactic body radiotherapy. These products include medical linear accelerators, brachytherapy afterloaders, and treatment verification equipment. Its software offerings range from information management tools to systems for patient care management. Oncology Systems accounts for around 95% of Varian's total revenue.

The Proton Solutions segment makes devices that use proton beams to treat cancer. Proton therapy isn't widely used because of its prohibitive cost, but Varian is working to make it more accessible and affordable to customers.  The segment brings in the remainder of Varian's revenue.

Geographic Reach

Varian has domestic manufacturing plants in California, Virginia, and Washington; it has international plants in Brazil, Canada, China, Finland, France, Germany, Switzerland, and the UK.

The company operates in the Americas (the US, Canada, and Latin America); Europe, including Russia, the Middle East, Africa, and India (EMEA); and the Asia/Pacific region. The US accounts for nearly half of its total sales.

Sales and Marketing

Varian's customers include radiotherapy centers, oncology practices, physicians' offices, university research and community hospitals, private and governmental institutions, and health care agencies, among others.

Varian markets its products worldwide through a combination of direct sales forces in the US and Canada and independent distributors or resellers in other markets.

Financial Performance

Varian's revenue fell 18% in fiscal 2015 (ended September) but has been rising in subsequent years as demand for its Oncology Systems products has grown. However, in the same period net income has been declining. 

Revenue increased 11% to $2.9 billion in fiscal 2018, primarily due to a 14% increase in Oncology Systems sales. Both product (hardware and software) and services revenue rose that year, and all geographic regions saw higher sales -- especially EMEA, which rose by 24%. Those gains were partially offset by an 18% decline in the much smaller Proton Solutions segment.

Net income fell by a third to $150.3 million in 2018. That drop was driven by a 292% increase in taxes on earnings.

The company ended fiscal 2018 with $504.8 million in net cash, about $220 million less than it had at the end of 2017. Operating activities provided $454.9 million that year, while financing activities (primarily the reduction of debt) used $487 million and investment activities used another $184 million.

Strategy

Varian has been focused on accelerating the momentum of its Proton Solutions business and expanding the global reach of its Oncology Systems business. In early 2017, the company spun off its former Imaging Components segment into a new company named Varex Imaging. That transaction allowed Varian to focus on its cancer and proton therapy operations while Varex works to build up its portfolio of imaging components and software.

With its streamlined operations and narrowed focus, Varian is now working to establish itself as a multidisciplinary integrated cancer care firm. It plans to leverage its presence in the radiation therapy market to enter into other growing markets. The company has been active on the acquisition front, buying companies to broaden its software and equipment offerings. In 2018 it acquired a handful of firms, including software firms HumediQ and Evinance Innovation. HumediQ specializes in integrated patient identification, and it expands Varian's patient motion-management portflio. Evinance is now serving as the foundation for Varian's new innovation center in Montreal; the center will focus on R&D of health informatics technologies to expand Varian's cancer care capabilities.

In addition to domestic sales, Varian is working to grow sales abroad. Especially in emerging markets, the demand for radiation therapy is outpacing treatment availability. Varian hopes to help meet the growing demand in such markets as China, India, and Brazil.

Mergers and Acquisitions

Varian regularly makes acquisitions to expand its operations geographically and to develop additional revenue streams. It kicked off a busy 2018 with the purchase of Canadian firm Evinance Innovation, provider of clinical decision support software; with that buy, Varian expanded its 360 Oncology care management platform. It also acquired Noona Healthcare, developer of a cloud-based offering that tracks cancer patient outcomes, and Mobius Medical Systems and its radiation oncology quality assurance software.

Also in 2018, the company purchased HumediQ, maker of the IDENTIFY patient identification and radiation therapy positioning system; that transaction expanded Varian's movement management operations. Varian expanded its distribution network with the acquisition of radiotherapy equipment distributor Cooperative CL Enterprise. All of those purchased firms were integrated into Varian's Oncology Systems segment.

Company Background

Varian was established in 1948 as Varian Associates.

Varian Medical Systems, Inc.

3100 HANSEN WAY
Palo Alto, CA 94304-1030
Phone: 1 (650) 493-4000

Stats

Employer Type: Publicly Owned
Stock Symbol: VAR
Stock Exchange: , NYSE
Chairman: R. Andrew Eckert
Vice Chairman: Timothy E. Guertin
President and CEO: Dow R. Wilson
Employees (This Location): 1,710
Employees (All Locations): 7,174

Major Office Locations

Palo Alto, CA

Other Locations

Milpitas, CA
Palo Alto, CA
Washington, DC
Atlanta, GA
Lincolnshire, IL
Ashland, MA
Milton, MA
Las Vegas, NV
Massillon, OH
Pickerington, OH
North Charleston, SC
Salt Lake City, UT
Charlottesville, VA
Gig Harbor, WA
Seattle, WA
Belgaum, India
Bengaluru, India
New Delhi, India
Fukuoka, Japan
Hiroshima, Japan
Kanazawa, Japan
Kyoto, Japan
Morioka, Japan
Nagoya, Japan
Okayama, Japan
Osaka, Japan
Saitama, Japan
Sapporo, Japan
Sendai, Japan
Shizuoka, Japan
Takamatsu, Japan
Jundiai, Brazil
Winnipeg, Canada
Toulouse, France
Haan, Germany
Troisdorf, Germany
Willich, Germany
Singapore, Singapore