Barrington Initiates Outperform On 'Clear Market Leader' In Cancer Treatment Therapy

Barrington Research believes that Varian Medical Systems, Inc.

is "clearly a market leader within the cancer treatment space and, in particular, radiotherapy." "We are assuming coverage of Varian Medical Systems, Inc. due to an analyst transition," the firm noted. Many factors are currently driving growth of proton therapy, and as a result increasing radiation therapy cancer cases. Worldwide, proton therapy is a growing preference for technological innovations and non-invasive procedures. There are other contributing factors such as an ageing population which are helping to promote proton therapy equipments. At a macro level, cancer prevalence is "very sizeable" today, the firm commented. Presently, there are 14 million new cancer cases diagnosed annually worldwide. This figure is only expected to grow. Barrington believes that the timing of VAR is appropriate, with the company also having material upside. "In fact, by the year 2030 (according to a range of sources) it is estimated that there will be well over 20 million new cancer diagnoses annually. The trend is largely being driven by the aging of the global population, particularly in developed regions such as the U.S. and Europe. Further, in the U.S. alone, direct costs associated with cancer are now just over $200 billion and are expected to be in excess of $300 billion by 2030. Indirect costs, which raise the annual total cost of cancer care to approximately $300 billion, could increase to over $450 billion by 2030, Barrington Research commented. Shares of VAR are currently down approximately 20 percent versus their 52-week highs.