Varian Medical Systems

Varian Medical Systems is a manufacturer of medical equipment. It was founded in 2007. The Varian Medical Systems Foundation provides grants, donations, and subsidies to nonprofit organizations that disseminate information and provide cancer prevention, detection, and treatment services.

Performance indicators

2020: Lower revenue due to falling sales of proton therapy systems

At the end of fiscal 2020, Varian Medical Systems received revenue of $3.17 billion, which is 2% less than a year earlier. This decline was largely due to a decrease in demand for proton therapy systems: revenue here sank 16%, amounting to $121 million. During the year, Varian received purchase orders for only four such systems.

At the same time, the main source of income for the manufacturer of medical equipment remains solutions for the treatment of cancer. Here in 2020, the financial year registered revenue in the amount of almost $3 billion, which by 2% does not reach the indicator of a year ago. Orders for the supply of such products for the year decreased by 4%, amounting to $3.25 billion.

The reporting also includes the line "other" sources of income, which include intervention solutions, including cryoablation, embolic microspheres and microwave ablation, as well as cardiac radio ablation. Such developments added $49 million to annual revenue.

Varian revenue dips as sales of proton therapy systems decline

Direct sales of equipment provided Varian with annual revenue of $1.59 billion, which is 11% less than in fiscal 2019. The company earned about the same amount on services, but revenue here rose by 10%.

The main markets for Varian remain countries Northern , South America where in 2020 the company raised $1.53 billion, which approximately corresponds to the value of a year ago. The turnover in the region EMEA turned out to be a little more than $1 billion, having decreased by 7% on an annualized basis. In the Asia-Pacific region, Varian sales increased by 1% to reach $633.4 million.

As for net profit, in 2020 it amounted to $269.4 million, having decreased relative to profit in 2019 (then it was equal to $292.2 million). The reason for the fall in profit in the statements was not disclosed.^[1]

History

2023

Siemens Healthineers bought Aspekt Solutions

On September 26, 2023, Varian, a division of Siemens Healthineers, announced that it had entered into an agreement to acquire Aspekt Solutions, a developer of cancer treatment technologies. The value of the transaction and other conditions for its implementation are not disclosed. Read more here.

Ransomware attack on Varian IT systems paralyzes equipment in hospitals

In early August 2023, Siemens Healthineers announced that the computer infrastructure of its subsidiary Varian Medical Systems was subjected to a cyber attack, behind which is the LockBit ransomware group. The hacker invasion paralyzed the operation of equipment in medical institutions.

How exactly the attackers gained access to the Varian IT environment has not been reported. But cybercriminals themselves say they were able to steal an extensive set of data, including personal information about patients. The LockBit group threatens to publish this information on the Internet if Varian does not get in touch to discuss the issue of paying the ransom. Computer security experts say the leak of sensitive data could seriously hit Varian's reputation. Stolen information can be used to organize personalized phishing attacks and other fraudulent schemes.

Siemens Healthineers reports computer infrastructure of its subsidiary Varian Medical Systems hit by cyber attack

Siemens Healthineers is aware that our Varian business segment has been attacked by the LockBit ransomware group. We have comprehensive measures in place to mitigate cybersecurity risks for our company and patients. We have activated the incident response protocol and set up a dedicated task force to investigate the intrusion, an official statement said.

LockBit ransomware blocks access to computer systems. How much cybercriminals want to receive from Varian is not specified. The company itself says that it has attracted third-party experts to eliminate the consequences of the hack and introduce additional protective measures.

Cybersecurity is paramount to Siemens Healthineers, and we are constantly committed to improving the protection of our IT systems and sensitive data, the affected company notes.[2]

2020

Investing in cancer data analytics services developer Cota

In mid-November 2020, Varian invested $10 million and signed a cooperation agreement with the American developer of services for analyzing cancer data Cota. Under the terms of the contract, Varian will offer its customers access to Cota services that analyze electronic health record data and isolate the most important information. Read more here.

Siemens Healthineers buys Varian for $16.4 billion

In early August 2020, it became known that Siemens Healthineers was buying the American company Varian Medical Systems for $16.4 billion. This transaction will be the first major acquisition of Siemens Healthineers, which became a separate division of Siemens in 2018.

Siemens retains control of Siemens Healthineers and will provide interim financing for the transaction, which at the end of 2020 will be partially refinanced by issuing shares distributed to shareholders. Under the terms of the deal, Healthineers will acquire all shares of Varian for $177.50, which corresponds to a 24% increase in the company's quotations at the time the US exchange closed.

Thanks to this transaction, we will significantly strengthen our position in the field of oncology in addition to such important sectors as cardiology and neurology, "said Jochen Schmitz, CFO of Healthineers.

CEO Bernd Montag strongly rejected suggestions that Siemens Healthineers overpaid for Varian.

It's a symbol in our industry, "he told reporters on a conference call. - If we put the value of this deal in perspective, it will become clear that we have offered a reasonable price.

Siemens Healthineers acquires U.S. company Varian for $16.4 billion

With this deal, Siemens Healthineers will acquire a leader in radiotherapy with more than 50% market share. Meanwhile, medical professionals note a long-term increase in the incidence of cancer - from 14 million cases in the world in 2010 to 25 million, the projected number of cases in 2030. As a result, the cancer care market will also grow, the annual growth rate of which will be from 6% to 10% and which should reach $20 billion, according to Siemens Healthineers.

However, completing the purchase of Healthineers still requires approval from Varian shareholders and regulators. The deal is expected to close in the first half of 2021 and will account for Siemens Healthineers adjusted underlying earnings per share within 12 months of the deadline.

With Siemens Healthineers, we will be able to take care of a huge number of patients worldwide, as well as provide new development opportunities for our employees within a larger organization, said Varian President and CEO Dow Wilson.

Conglomerate Siemens, meanwhile, is using its balance sheet effectively to finance the deal, providing Healthineers with an interim loan of 15.2 billion euros ($17.9 billion). The Healthineers unit, in turn, plans to refinance 50% of this volume by issuing shares distributed to shareholders as early as 2020 if market conditions are favorable.

Varian goes under control of Siemens Healthineers

Siemens announced that it would welcome the deal and raise funds for the interim loan by issuing bonds. The parent company will not participate in the additional issue of shares, which means that its stake in Healthineers will decrease from 85% to 72%. Siemens is committed to maintaining its credit rating at A +, thereby maintaining a high position among investors.

Siemens Healthineers and Varian have been working on joint projects in the field of cancer diagnosis and treatment since 2015. For example, companies have jointly developed an ARIA information system that consolidates patient path data.

Earlier, Bernd Montag in an interview with Bloomberg said that the next acquisition will be related to a company that produces the same products as Siemens.

We do not want to do, for example, pacemakers, since they do not fit into our product portfolio, "he said.[3]

2019

China imposed duties on medical equipment

On September 1, 2019, China introduced the first part of additional duties of 10% on American products worth $75 billion. And on December 15, new 5 percent fees will come into force. The duties affected some types of medical equipment, including dialysis devices, orthopedic products and hospital supplies. Read more here.

Sale to Varian of Minimal Injury Cancer Business

In early July 2019, Varian Medical Systems acquired two Boston Scientific product lines: drug microspheres and soft embolization beads, which are designed to treat arteriovenous malformations and hypervascular tumors. Read more here.

Buying cancer solutions developer Endocare

In mid-June 2019, Varian Medical Systems announced the acquisition of a solution developer for. cancer treatment Endocare More. here

Cancer Treatment Services International cancer solutions developer purchase for $283 million

In mid-May 2019, Varian announced the purchase of cancer solutions developer Cancer Treatment Services International for $283 million. Read more here.

Purchase of non-invasive arrhythmia treatment equipment developer

In early May 2019, Varian Medical Systems announced the acquisition of non-invasive arrhythmia treatment equipment developer CyberHeart. Read more here.

2018

Revenue growth of 11% to $2.9 billion; delivery of 10 systems to Russia

In fiscal 2018, Varian Medical Systems reported revenue of $2.9 billion, up 11% from a year earlier. Most of the income came from equipment sales - $1.6 billion (+ 13% in fiscal 2017). Service revenue increased by 10%, reaching $1.3 billion.

During the reporting 12-month period, which ended on September 28, 2018 of the calendar year, Varian received orders totaling $3.2 billion, which is 3% higher than a year ago.

Varian financials

Varian earned about $2.8 billion in the cancer systems market over the year, increasing the result of the previous year by 14%. The largest increase (by 17%) in orders for the supply of such equipment was recorded in Europe, the Middle East and Africa (EMEA). In the markets of the Americas, orders increased by 5%, in the Asia-Pacific region - by 9%. During the year, 224 Varian linear accelerators were installed, and their total number exceeded 8 thousand.

Varian's revenue from sales of proton therapy equipment in fiscal 2018 decreased by 18% compared to 2017 and amounted to $149 million. The lion's share in this turnover was directly occupied by the sale of medical equipment ($139 million). Services, including service, in this market brought the company $10 million in revenue.

The report says that in the 2018 financial year, the company delivered seven Halcyon systems and three TrueBeam systems to the Russian company New Medical Technologies LLC.

Varian's net profit fell from $219.2 million in fiscal 2017 to $150.3 million a year later. Profit in the division of oncological systems increased by 16% and reached $553 million, but this was not enough to grow the entire indicator. Losses in the proton therapy segment ($52 million), as well as various expenses, affected. For example, $234 million was spent on research and development, which is 11% higher than a year ago.^[4]

Purchase of Noona Healthcare, a developer of a cloud-based cancer treatment data collection service

In late August 2018, Varian announced the acquisition of Noona Healthcare. Noona software allows doctors to obtain real-time treatment efficacy data and communicate directly with patients. This acquisition expands Varian's therapeutic solutions portfolio for cancer patients and aligns with the company's long-term growth and development strategy. Read more here.

Buying HumediQ Global

On August 7, 2018, Varian Medical Systems announced the acquisition of HumediQ Global, a developer of a patient positioning system for radiation therapy. This purchase, the cost of which the parties decided not to disclose, is part of Varian's long-term growth and expansion strategy. Read more here.

COOP Purchase

On May 7, 2018, Varian announced the purchase of Taiwanese distributor COOP after more than 40 years of cooperation between the companies. Read more here.

Evinance Innovation Purchase

On February 22, 2018, Varian Medical Systems announced the acquisition of the private medical decision support systems company Evinance Innovation. Read more here.

Purchase of Mobius Medical

On February 6, 2018, Varian Medical Systems announced the acquisition of Mobius Medical Systems. The purchase of Mobius is in line with Varian's long-term growth strategy - a deal expected to position the company as a leader in radiotherapy hardware and software providers. Read more here.

Sirtex purchase for $1.3 billion

On January 30, 2018, Varian Medical Systems announced the acquisition of a key stake in Sirtex, a company focused on interventional therapy for tumor diseases. The deal was unanimously approved by the boards of directors of both companies, and Sirtex announced that an independent expert at the company appreciated the contract and considered the deal beneficial to Sirtex shareholders. The transaction value is $1.3 billion. Read more here.

2017: CFO joining from Dell

In April 2017, Varian Medical Systems announced the appointment of 49-year-old Gary Bishoping as the company's chief financial officer. He will officially take up his duties on May 8, 2017. Bishoping previously served as CFO for Dell. Read more here.