Varian Medical Systems (VAR) has a wide presence across the geographies around the world. In fiscal 2017, orders in the Americas region registered growth of 3%, and North America reported the strongest growth of 6%. Orders from Asia Pacific increased 7%, and Europe registered double-digit order growth of 14%. The geographical mix of Europe increased to 30%, a growth of 2% from 2016. The Oncology segment drove the company’s overall order growth, driven by robust growth in the installed base of the Linear Accelerator system.
Other major oncology technology players include Intuitive Surgical (ISRG), Thermo Fisher Scientific (TMO), and Boston Scientific (BSX), which had sales growth of 18%, 13.9%, and 5.5%, respectively, in their recently reported quarters. The Health Care Select Sector SPDR ETF (XLV) has ~0.32% of its total holdings in VAR.
Oncology business results by geography
Oncology sales in the Americas rose 2%, whereas order growth in the region rose 1% in 4Q17. North America was the major growth driver in the region with an 8% growth, which was driven by the robust demand for VAR’s systems. Ten Halcyon systems were ordered in North America in the quarter. One Halcyon system was ordered by Barnes-Jewish Hospital, and five centers in their network ordered four TrueBeam Radiotherapy Systems and software packages.
Latin America registered a weak performance in the quarter with orders falling 46%. That was due to uncertainty over various public-sector sales. Brazil, however, reported strong growth. Oncology sales and orders in the Asia Pacific region fell 5% and 10%, respectively. Japan’s orders fell in the double digits in the quarter, driven by market softness. China’s market continued to be robust with double-digit growth.
In the EMEA (Europe, the Middle East, and Africa) region, sales growth was 3%, whereas order growth was 32% for 4Q17. Twelve Halcyon system orders were booked from this region. India registered strong double-digit orders growth, driven by $15 million worth of orders for three TrueBeam and two VitalBeam systems in West Bengal.