Varian Investor Overview Jefferies Conference - London Neil Madle, Dir, International IR
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Varian Investor Overview
Jefferies Conference - London
Neil Madle, Dir, International IR
Fiscal Year 2015 Results
EPS Non-GAAP
$4.29
GAAP
$4.09
Revenue Growth
Constant Currency
6%
As Reported
2%
FY15 Gross Orders Q4’15 FY’15
Oncology Systems -- $2.7 Billion#
Constant Currency 5% 6%
Reported Flat Flat
Imaging Components* -- $605 Million# (30%) (16%)
Particle Therapy $141M $317M
Fiscal Year 2015 Orders Growth
* Primarily transacted in US Dollars # Annual gross orders
Total FY2015 Year-Ending Company Backlog -- $3.5B; up 10%
Our Vision: To Help Save Millions of Lives Every Year, Around the World
5
Technology Leader in Growing Markets
• Varian Oncology Systems • Radiotherapy
• Radiosurgery
• Brachytherapy
• Varian Imaging Components • X-Ray Tubes
• Digital Flat Panels
• Security & Inspection Products
• Varian Particle Therapy • Proton therapy
Varian Oncology Systems
FY2016 Overview
Dynamic Oncology Market Economic driven healthcare transformation
– move to affordable, accessible, quality care
Expansion, investment in emerging & frontier markets
Modernization, replacements in developed markets
Cancer Burden Rising 25 Million People
2012 2030
New Cancer Cases 14.1 Million 24.6 Million
Cancer Deaths 8.2 Million 13 Million
Needed by 2035
Coverage of radiotherapy services according to country as determined by global equipment
databases, an activity-based operations model, cancer incidence, and evidence-based estimates
of radiotherapy need.
20,000+ linacs
Expanded software,
service infrastructure
Greatest need in lower
and middle income
countries (LMIC)
Call to Action & LMIC Target
By 2020
of countries should
have cancer plans that
include radiotherapy.
Population Based
Cancer Control Plans
80%
CTA:
TARGET:
Calls to Action & LMIC Targets
25% increase in RT
capacity from 2015 to 2025
Expansion of Access
to Radiotherapy
CTAs: TARGETS:
Consolidate slides 15-17 into single slide
$46B of investment by 2025
to establish RT infrastructure
and training in LMIC
Sustainable Financing
to Expand Access to RT
80% of LMIC to include RT
services as part of universal
health coverage by 2020
Align Radiotherapy
Access with Universal
Health Coverage
Global Radiotherapy Talent Gaps
*8,700 new machines plus 13,000 replacements = 20,700 new machines
Coverage of radiotherapy services according to country as determined by global equipment databases,
an activity-based operations model, cancer incidence, and evidence-based estimates of radiotherapy need.
What is Needed 2015 2035 GAP
Radiation Oncology Centers 7,700 10,900 3,200
Linear Accelerators 13,100 21,800 8,700*
Radiation Oncologists 23,200 45,500 22,300
Medical Physicists 10,000 39,300 29,300
Radiation Technologists 33,300 130,200 96,900
Keys to Closing Gap: Automation, Simplification, Productivity
The Varian Oncology Portfolio
VitalBeam™
Radiotherapy System
New Era Innovation Knowledge-Guided Oncology | Intelligent Treatment Delivery
Advanced Data Analytics
RapidPlan™ Ramp Up
300+ Orders
3,800 Potential Installs
Disease Site Models
Prostate
Prostate (+lymph nodes)
Head & Neck
Lung SBRT
More Models Coming
KNOWLEDGE-GUIDED ONCOLOGY:
University of Michigan: Spine SBRT Study
Manual RapidPlan
Foy J, et al. An analysis of knowledge based planning for stereotactic body radiation
therapy of the spine [abstract]. Poster presentation at: American Association of
Physicists in Medicine (AAPM) 57th Annual Meeting & Exhibition; July 12-16,
2015; Anaheim, CA.
University of Michigan
Equivalent Quality
Manual RapidPlan
Time 60-90 min 15-20 min
KNOWLEDGE-GUIDED ONCOLOGY:
Royal Surrey County Hospital: Prostate Study
Manual RapidPlan™
Time 114 ± 86 min 21 ± 13 min
Equivalent
or better 30% 90%
Better 10% 90%
Courtesy, Royal Surrey County Hospital NHS Foundation, Guilford, UK
Data source on file
0
50
100
150
200
250
300
350
A1A2A3A4B1B2C1D1D2D3E1E2E3F1F2F3F4F5F6
Planning time (min)
conventional RapidPlan
KNOWLEDGE-GUIDED ONCOLOGY:
ARIA Takes the Lead
Winning MOSAIQ conversions
ARRA HITECH MU 2 achieved
InSightive Analytics ramping up
Infor™ interoperability
EPIC, Cerner, McKesson
Cloud-based offering with SaaS model
FlatIron alliance
ADVANCED DATA ANALYTICS
ADVANCED DATA ANALYTICS:
InSightive™ Analytics
50+ Orders
Customizable dashboards
Clinical & operational KPIs
Every ARIA site - potential 3800 Installs
ADVANCED DATA ANALYTICS
ADVANCED DATA ANALYTICS:
The Next Big Milestone –
High Definition Radiotherapy (HDRT)
INTELLIGENT TREATMENT DELIVERY:
Treatment Ideal:
100% of dose to the tumor; 0% to healthy tissue.
Not for Sale – Work in Progress
HEALTHY TISSUE SPARED
Progress Made So Far & What’s Next
The Conformality Continuum
3D CONFORMAL IMRT IGRT SBRT HDRT
INTELLIGENT TREATMENT DELIVERY:
TODAY
High Definition Radiosurgery
Coplanar RapidArc SRS
4π High Definition SRS
Brain Stem Brain Stem
50% Rx Dose 50% Rx Dose
INTELLIGENT TREATMENT DELIVERY:
Not for sale – work in progress
Iterative CBCT Gaining Clarity
TrueBeam 2.0 Clinical CT Iterative CBCT
INTELLIGENT TREATMENT DELIVERY:
Long Term Growth Drivers Rising Global Cancer Burden
Need to Expand, Modernize RT Infrastructure
Demand for Cost-Effective Solutions
Winning Product Portfolio
TrueBeam Platform
Eclipse, RapidPlan
ARIA, InSightive Analytics, Velocity
Strong Innovation Pipeline
High Definition Radiation Therapy
Multi-Modality Imaging at Point of Care
Iterative CBCT
Largest Installed Base – Upgrades, Replacements
Service Momentum
Building Momentum
Varian Particle Therapy
Number of
treatment rooms
to increase by
over 4x
Proton Therapy World Market Report (Edition 2015), MEDraysintell.
Patients Treated to 2030
27 | VARIAN PARTICLE THERAPY
Commitment
Varian develops
proton treatment
planning;
provides
information
systems for
proton centers
Varian purchases
ACCEL
Instruments
Superconducting
cyclotron clinical
at PSI
Complete
treatment system
delivered to
Rinecker Proton
Center, Munich
(>1,500 patients)
First US
ProBeam®
system delivered
to Scripps Health
in San Diego
Start of clinical
operation at
Scripps Health in
San Diego
6 orders
Compact launch
Eclipse™ proton
algorithm
3 installs
underway
1990s 2007 2009 2011 2014 2015
History of Proton Program
28 | VARIAN PARTICLE THERAPY
Varian Projects Overview
SCRIPPS PT CENTER 3 Rotational and 2 Fixed Beam Rooms
KFMC-KING FAHD MEDICAL CENTER 3 Rotational and 1 Fixed Beam & 1Eye Tx
UNIVERSITY OF MARYLAND 4 Rotational and 1 Fixed Beam Room
GEORGIA PT CENTER (EMORY) 4 Rotational and 1 Fixed Beam Room
PTC ST PETERSBURG, RUSSIA 2 Rotational Gantries
RINECKER PROTON THERAPY CENTER 4 Rotational Gantries and 1 Fixed Beam Room
UT SOUTHWESTERN MEDICAL CENTER 4 Rotational and 1 Fixed Beam Room
CINCINNATI CHILDREN’S HOSPITAL 3 Rotational Rooms
PAUL SCHERRER INSTITUTE (PSI) 1 Gantry Room
NATIONAL TAIWAN UNIVERSITY
2 Gantries 1 Fixed Beam Room
AARHUS PTC - DENMARK 2 Gantries
UK PROTON THERAPY CENTERS UCLH London - 3 Gantries
The Christie Hospital, Manchester - 3 Gantries
HOLLAND PTC 2 Rotational Gantries 1 Fixed Beam
NEW YORK PTC
3 Gantries 1 Fixed Beam Rm 1 RR
29 | VARIAN PARTICLE THERAPY
Hitachi - 3
IBA - 17
ProNova - 4
Varian - 22
Sumitomo - 1
2015 Treatment Rooms Ordered
Varian Establishing Market Leadership Position
30 | VARIAN PARTICLE THERAPY
Why We’re Winning……
• Precision IMPT with Pencil-Beam Scanning
• Fastest Patient Throughput
• Varian Best in Class Oncology Product Suite
• Eclipse treatment planning
• ARIA OIS, data analytics
• Cone Beam CT Imaging/motion management
• Commitment to Innovation, Integration
Varian Imaging Components FY2016 Overview
Varian Imaging Components
We Make Components for X-ray Imaging Equipment
Price/Mix/FX Impact
Panel prices eroding;
FX helping competitors grab share
Losing $50M panel customer to
insourcing
SIP market freezing; tenders
delayed/stopped
FY15 Challenges
65%
24%
11% OEMs
Varian
Other
X-Ray Tubes: Units 3% Sales (1%)
Source: Market Share Estimates based on Varian analysis
Flat Panels: Units 2% Sales (7%)
42%
30%
28% OEMs
Varian
Other
FY15 Successes
Added MeVis/Claymount components
Gained share in tube aftermarket;
VIC team winning in China
Grew orders >10% in industrial tubes/panels
Imaging Growth Trends/Opportunities
Ongoing growth in diagnostic imaging
Market transforming: analog to digital
Industrial/NDT market expanding; New digital applications emerging
Security/Inspection investments continuing
75,000+ units/yr
2-3% CAGR
1M+ installed units Only about
10% digital
400+ system
integrators
$300M+/yr spent on
film
1,000+ Cobalt
systems to be
replaced
<5% cargo
containers scanned
today
FY16 Growth Initiatives
Financial Goals
Return to revenue growth
Investing to resume op. inc. growth in 2017/18
Innovation
Low-cost detectors to be launched 2016
Sales & Marketing Focus
X-Ray tube projects with OEMs in Asia
Scale up Claymount, MeVis
Diversify SIP into Industrial NDT solutions
Expand Industrial, Aftermarket Channels
Thank You
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