Timothy E. Guertin, President & CEO
Elisha W. Finney, Corporate Sr. VP & Chief Financial Officer
Robert H. Kluge, Corporate Sr. VP & President, X-Ray Products
Kolleen Kennedy, Corporate Sr. VP & President, Oncology Systems
Lester Boeh, VP, Emerging Businesses
NO. OF EMPLOYEES: 5,700
GLOBAL HEADQUARTERS: Palo Alto, Calif.
Pamela Percival was diagnosed with a high-grade sarcoma in her abdomen, which meant she was at high risk for it metastacizing. The sarcoma being high-grade also meant that
she would likely face a combination of surgery, chemotherapy and
radiation therapy. Varian Medical was able to provide her with the radiotherapy technology she needed, and today Percival is living can-cer-free. What makes her recovery even sweeter, however, is that she
is a Varian employee, and was able to see first hand how the technology her company produces helps real people in very real ways.
“I’ve always believed in the mission of Varian,”she said,“But it’s
never been so personal as when it’s your own life. Seeing that our
own machine was treating me gave me a sense of comfort and pride.”
Varian’s Oncology Systems unit has been enjoying annual market growth of 8 percent over the last five years, and contributed $2
billion to the company’s overall reported revenue of $2.6 billion for
fiscal year 2011 (ended Sept. 30), an 8. 5 percent increase from
FY2010. According to the company’s annual financial report, Varian
received approval from the State Food and Drug Administration
in China to market its TrueBeam System there in April 2011. The
TrueBeam system is a radiotherapy device that has been on the
U.S. market since April 2010, and is designed to treat tumors with
elevated speed and accuracy, even if the tumor is difficult to pinpoint due to breathing motions of the patient. In the third quarter
of FY2011, the Japanese Ministry of Health, Labor and Welfare
granted Varian approval for the device to be marketed in Japan.
Through the end of the fiscal year, Varian received more than 380
orders for the system, most orders coming from North America.
In a letter to stockholders, President and CEO Tim Guertin said
the Oncology Systems team was able to“improve treatment capacity and patient access to [Varian’s] life-saving technology”over
the course of FY2011. A range of other products in this portfolio
performed well, including Varian’s RapidArc, a drug-delivery system that is touted to improve dose conformity while significantly
shortening treatment times, which exceeded 2,000 orders.
X-ray products didn’t disappoint either. X-ray products represented 18 percent of total revenues in FY2011, compared to 17 percent in 2010. They generated $469 million in revenue in FY2011,
an increase of $66 million compared with the previous year. Varian
produces X-ray tubes for CT scanners, radiographic or fluoroscopic
imaging, mammographies and special procedures. Its flat-panel
detectors, based on amorphous silicone imaging technologies,
have found broader applications as alternatives to image intensifying tubes and X-ray film. These panels have found their way into
filmless medical diagnostics, dental, veterinary and industrial applications, which only has translated into more revenue for Varian.
Also included in Varian’s revenue were the company’s Security
and Inspection Products, which provide group cargo screening
system manufacturers and others with products for high-energy
X-ray imaging. These technologies generated $106 million in revenue in FY2011.
The company posted net income of $399 million, up 10 percent from $360.4 million in 2010.
In terms of acquisitions, Guertin is particularly excited over the
agreement Varian reached with Augmenix in May 2011. Varian
agreed to make a $15 million minority equity investment in Augmenix, which is developing hydrogel products to improve outcomes in radiation oncology.“[The technology] could be used to
position the prostate away from sensitive tissues for high-dose radiosurgery,” Guertin explained in the annual report. The hydrogel,
called SpaceOAR, works by solidifying as soon as it is injected into
the space between the prostate and rectum in men. The rectum
then moves away from the prostate, limiting its exposure to radiation during treatment. Varian’s investment includes an option to
buy Augmenix, which hasn’t taken place as of time of publication.
In September, just before the close of the fourth quarter, Varian
announced an agreement to acquire Calypso Medical Technologies Inc. for $10 million plus a portion of earnings generated from
Calypso products during the ensuing 30 months. Calypso is a privately owned, Seattle, Wash.-based developer and supplier of specialized products and software for real-time tumor tracking and
motion management during radiosurgery and radiotherapy.
“With Calypso’s technology, Varian will be able to offer cancer
treatment centers real-time, non-ionizing tumor tracking tools for
enhancing the precision of their treatments,”Guertin said.“These
products are a perfect complement for Varian’s motion manage-
ment technology, including our TrueBeam platform, respiratory
gating and dynamic imaging tools for highly focused radiosurgery.
These products should enhance Varian’s growth as we integrate
them and make them more broadly available to the clinical com-
munity through our global marketing and sales channels.”
Looking to the future,Varian will continue growing its radiation
business. In FY2011, the company’s particle therapy business
booked an $88 million order for a system that is being installed at
the new Scripps Proton Therapy Center in San Diego, Calif. Par-
ticle therapy is a form of radiotherapy that uses energetic protons,
neutrons and ions for cancer treatment. Treatment with the system
is scheduled to begin in 2013 for patients with cancers where it
particularly is necessary to protect surrounding healthy tissue.
Guertin expressed confidence that this would be“a catalyst for
more accessible financing for future centers.” ;