$1.7 Billion ($1.8B total)
KEY EXECUTIVES:
Timothy E. Guertin, President and CEO
Elisha W. Finney, Sr. VP and CFO
Robert H. Kluge, Sr. VP and President, X-Ray Products
John Anderson Thorson, VP, Finance and Business Development
Dow R. Wilson, Exec. VP and President, Oncology Systems
George A. Zdasiuk, VP and Chief Technology Officer
NO. OF EMPLOYEES:
4,600
GLOBAL HEADQUARTERS:
Palo Alto, CA
In early 1999, Varian Associates changed its name to Varian Medical Systems after spinning off its semiconductor manufacturing equipment and scientific instruments businesses. Today, Varian Medical Systems manufactures integrated products for treating cancer and other conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy. The company has tripled in size since 1999.
The company’s Oncology Systems business provides radiotherapy products for treating cancer and other conditions, as well as informatics software for managing comprehensive cancer clinics. Its products include linear accelerators, simulators, proton therapy systems and software tools for planning, verifying and delivering radiation, radiosurgical and brachytherapy treatments. The brachytherapy division manufactures products to treat cancer by temporarily inserting radiation sources within tumor sites. With its partner, BrainLAB (a provider of software for minimally invasive therapies and cancer treatment), Varian also produces technology for stereotactic radiosurgery and neurosurgery for the treatment of cancer and other disorders of the central nervous system.
Varian’s X-ray products business provides X-ray tubes and flat-panel X-ray image detectors for imaging primarily used in medical diagnostics, dental procedures and veterinary care. The company’s smallest division (revenues were broken out of total medical revenue) manufactures X-ray imaging products for cargo screening and industrial inspection.
Overall company revenue for fiscal 2007 (ended Sept. 30) was $1.8 billion, an increase of 11%. Net earnings were $239 million, down from $245 million in fiscal 2006. The company said costs associated with acquisitions during the fiscal year drove down earnings results. Fiscal 2007 also got off to a slow start due to customer purchasing delays and “new competitive challenges” in the first half of the year, company officials said.
Orders and revenue, however, were up across all product categories. Oncology Systems revenue increased 8% (though orders were sluggish), while X-ray product revenue increased 13%. Though not a medical-device producing division, the company’s X-ray security screening group grew revenue 135%, mostly as a result of an acquisition for the division.
Oncology Systems reported $1.4 billion in net revenue and $340 million in operating earnings, up from $319 million in 2006. X-ray revenues were $258 million, with operating earnings of $61 million, up from $44 million in 2006. “Other” revenue of $79 million primarily was the result of sales of X-rays for security screening.
For 2007, the company expanded to prepare for international growth and increases in orders, particularly for oncology products. Varian enlarged its global facilities footprint by more than 20% with a new 140,000-square-foot operation in Beijing, China that manufactures linear accelerators and new X-ray products. The company also completed a 100,000-square-foot expansion of its facility in Las Vegas, NV for an Oncology Systems customer-training center. The new center also will serve as headquarters for the company's Security and Inspection Products group.
In 2007, Varian introduced RapidArc, a device that, according to the company, delivers image-guided, intensity-modulated radiation therapy (IMRT) up to five times faster and more precisely than conventional IMRT of helical tomotherapy. For patients, it means more comfortable treatments and fewer complications. Prostate cancer patients, for example, can receive a single treatment in less than four minutes, according to Varian. The device is able to target tumors from more angles, thus saving healthy tissue in the process while making only a single revolution of the treatment machine around the patient. In January 2008, the FDA granted the RapidArc 510(k) clearance.
“RapidArc represents a major medical advance that will change the way radiation therapy is planned and delivered,” said Dow Wilson, president of Varian's Oncology Systems business. “Our primary goal with this product is to improve clinical outcomes. In addition, we discovered that we could simultaneously improve treatment efficiency significantly. RapidArc should make better-quality radiotherapy a more affordable, more accessible treatment option, and enable more cancer patients to receive a higher standard of care.”
The FDA’s clearance for RapidArc covers the treatment hardware and the RapidArc treatment planning software module in the company’s Eclipse treatment planning system. Varian began delivery to customers in spring of this year.
For fiscal 2008, management expects revenue growth in the range of 15% to 16% compared with 2007. Net orders grew double digits for the company’s X-Ray Products business and its Oncology Systems business for the first half of the year.