Any thoughts on Varian downgrade?
AP
Varian Shares Fall on Downgrade
Monday March 10, 6:39 pm ET
Analyst Downgrades Varian, Pointing to Concerns About Sales of RapidArc System
NEW YORK (AP) -- Shares of Varian Medical Systems Inc. fell Monday after a Jefferies & Co. analyst downgraded the stock, saying doctors are questioning the safety and need for its RapidArc radiation therapy system.
Mark Richter downgraded the stock to "Underperform" from "Hold." He said doctors may hesitate to purchase the RapidArc system because of doubts regarding its safety and its cost, and competition may be tough. As a result, the analyst said he is "very concerned" about the company's growth.
The stock fell $2.35, or 4.9 percent, to close at $46.10. Richter pared his price target to $40 per share from $42, implying the stock will fall 17.4 percent over the next year from Friday's closing price.
While the RapidArc system is designed to deliver radiation doses more quickly, Richter wrote that some oncologists think the device may be trading safety for speed. He added that RapidArc is expensive at $400,000, and some clinics that already have Varian's Trilogy system don't see the need for an upgrade.
"Radiation oncologists' seem concerned over limited clinical experience, sparse clinical data, and debugging issues with a new technological platform," he said. That could keep sales down until later this year or early 2009, in his view.
He added that rival products from TomoTherapy Inc., Accuray Inc. and Elekta also will pressure sales of RapidArc.
biz.yahoo.com
How reliable is this analyst? On the face of it, sounds like a fairly serious issue which I hope Varian can turn around quickly.
Regards. |
