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Siemens banking on faster growth, higher revenue from Varian business

by John R. Fischer, Senior Reporter | November 19, 2021
Business Affairs
Siemens Healthineers expects that Varian will grow faster than other divisions over the next three years and boost its revenue
Siemens Healthineers credited a 4.8% rise in its stock Wednesday to its recent acquisition of Varian, which it expects will grow faster than other divisions over the next three years and boost its revenue.

The company acquired Varian in April for $16.4 billion. The deal marked Siemens’ return to the radiotherapy market after a decade, with Varian becoming a new business segment. As a result, Siemens now offers sales of cancer treatment technologies such as linear accelerators and proton therapy systems. It believes that its expansion into interventional oncology, along with imaging, diagnostics, precision therapy and digital health will enable it to take advantage of the biggest opportunities in healthcare, according to MedTech Drive.

Revenue from Varian is expected to increase between 9% and 12% each year, with operating return on sales rising to well over 20% until 2025. Siemens has also raised its synergy targets following the takeover, from over $340 million (€300 million) to $396 million (more than €350 million) by 2025, reports Reuters.

Driving Varian’s growth target is its “market leadership position in radiation therapy as well as in proton therapy,” according to Siemens CFO Jochen Schmitz.

With Varian, Siemens is working toward a long-term goal to complete cancer treatment in two hours instead of two weeks. This, according to chief executive Bernd Montag, will require “a lot of integration of the imaging and digital capabilities with radiation therapy."

While the company does not plan to make another big acquisition like Varian in the near future, it is considering smaller acquisitions in new areas, including cardiovascular disease, cancer and neurological disorders, reports MedTech Drive. "The combination with Varian made us a more disease-focused company and made us more relevant. So, looking at technology-enabled therapy certainly is a focus," said Montag.

And while the company is facing the same issues as other companies, such as healthcare staff shortages, Montag says these situations present new opportunities that may generate interest, such as in the use of Siemens’ AI technologies to “take over the routine tasks to make the existing staff more productive."

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