Varian Medical: Precision-Guided Cancer Weapons And Rising Earnings

Feb. 7.07 | About: Varian Medical (VAR)

Eddy Elfenbein submits: Business Week looks at some wicked cool technology from our very own Varian Medical Systems (NYSE:VAR) that's helping to fight cancer:

In early 2005, Phil Ogden noticed he was having trouble swallowing food and went to a doctor, thinking he might have acid reflux. The news was far worse. The 66-year-old retired cop from Modesto, Calif., had esophageal cancer, and it had already spread to nearby lymph nodes. Dr. Albert Koong, a radiation oncologist with Stanford University's Comprehensive Cancer Center, asked if Ogden would mind being the first person to undergo a new type of radiation treatment. "The doctor said: 'For the first time in history, we can bomb the equivalent of an outhouse from 30,000 feet with no collateral damage,'" Ogden recalls.

Koong was referring to treatment with a $3 million device from Varian Medical Systems Inc. (VAR) It combines a linear accelerator, which emits high-energy X-ray beams, with advanced imaging gear. The machine enabled the doctor and his team to home in on cancerous cells and deliver precise doses of radiation over a six-week period without harming surrounding tissue. For the patient, that meant fewer side effects of radiation, such as a dry mouth and weight loss. Within days, Ogden was putting on pounds as it became easier to swallow. Ogden has since had to receive chemotherapy to treat small spots of cancer elsewhere in his body, but his esophagus remains cancer free.

Year..........Sales..........Oper Earnings......Taxes..........Net
2002..........$873.1.............$148.0..........$53.3..........$94.7
2003..........$1,041.6..........$200.6..........$70.2..........$130.4
2004..........$1,235.5..........$258.............$90.3..........$167.7
2005..........$1,382.6..........$308.3..........$101.7........$206.6
2006..........$1,597.8..........$318.7..........$75.1..........$243.6

VAR 1-yr chart:

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