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Tickers in this Article: VAR, ARAY, CYBX, CMN
As a part of its strategy to expand its reach in the global economy, Varian Medical Systems (VAR) announced the sale of its products to the Algerian government. The Varian Clinac iX devices along with Eclipse treatment planning and Aria oncology information management softwares will be installed at a radiotherapy clinic located in Setif, Algeria. An aging population along with a high rate of smoking has led to an increase in cancer count in Algeria. Lungs and breast cancer account for one-fourth of new cancer cases every year. As per the World Health Organization's ("WHO") GloboCan project, cancer incidences will increase by almost 25% in 2015.

In an effort to capture this opportunity, the oncology and X-Ray products company has collaborated with the Algerian Ministry of Health to provide three of its best linear accelerators to the new medical center in Setif. The devices from the company's Oncology Systems segment will assist physicians to provide high quality and cost effective treatments such as intensity modulated radiotherapy (IMRT) and image-guided radiotherapy (IGRT).

Varian is poised to increase market share in the radiation oncology market. International markets are too under-equipped to address the growing incidence of cancer. The company's strong overseas presence is expected to enable it to leverage this opportunity in the emerging markets.

The company currently enjoys a healthy demand for its coveted TrueBeam technology in emerging markets. In Dec 2012, the company had announced that the Clínicas Oncológicas Integradas (GRUPO COI) is the first cancer treatment facility in South America to order a TrueBeam system for treating tumors. Moreover, it had obtained permission from the Indian Atomic Energy Regulatory Board in the recent past for the usage of its TrueBeam High Intensity Mode for cancer treatment.

However, Varian competes with larger players in a technology-intensive industry. In the radiation oncology market, the company competes with Accuray (ARAY). Further, uncertainties stemming from health care reforms and a still weak hospital capital spending environment are matters of concern.

The stock carries a Zacks Rank #3 (Hold). Cantel Medical Corp. (CMN) and Cyberonics Inc. (CYBX) with Zacks Rank #1 (Strong Buy) are expected to do well in the medical instruments industry.

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