2015 ASTRO INVESTOR MEETING October 20, 2015
Agenda 7:30AM Welcome Dow Wilson Our Cancer Care Vision: The Next Big Advances Kolleen Kennedy Particle Therapy: Building Momentum Dow Wilson Q & A 9:00AM Booth Tour
Fiscal Year 2015 Preliminary Results EPS Non-GAAP ~$4.29 GAAP ~$4.09 Revenue Growth Constant Currency 6% As Reported 2%
Fiscal Year 2015 Orders Growth FY15 Gross Orders Q4 15 FY 15 Oncology Systems Constant Currency 5% 6% Reported Flat Flat Imaging Components* (30%) (16%) Particle Therapy ~$140M ~$310M Total FY2015 Year-Ending Company Backlog -- $3.5B; up 10% * Primarily transacted in US Dollars.
Fiscal Year 2016 Guidance REVENUE GROWTH*: 4-5% EPS: $4.45 - $4.55 Upcoming Investor Events Q4/FY2015 Earnings Report - Wednesday, Oct. 28, 2015 2:00 pm PT conference call; details: http://investors.varian.com/index.php?s=19&item=103 New York meeting FY2015 Review/FY2016 Outlook 12:00 pm ET, Tuesday, Nov. 3, 2015 at The Benjamin Hotel Webcast: https://event.webcasts.com/starthere.jsp?ei=1079531 *Assumes current exchange rates
Our Vision: To Help Save Millions of Lives Every Year, Around the World
ASTRO Overview Users Meeting ~800 Attendees! KOL Panel Global Utilization of Radiotherapy Focus on: Innovation enabling a new era in cancer care RapidPlan Multi-Modality Imaging Intelligent Treatment Delivery Advanced Analytics The Role of Protons
A World Without Fear of Cancer We innovate, support and simplify cancer-fighting solutions worldwide.
Dynamic Market Environment Economic driven healthcare transformation move to affordable, accessible, quality care Expansion, investment in emerging & frontier markets Modernization, replacements in developed markets
Expanding Global Access to Radiotherapy: A Lancet Oncology Commission Report
Worldwide Cancer Burden $2T global economic burden in 2010 50-60% of patients with cancer need RT 56% of cancers occur in high income countries 10% of patients have access to RT in low income countries
25 Cancer Burden Rising Million People 2012 2030 New Cancer Cases 14.1 Million 24.6 Million Cancer Deaths 8.2 Million 13 Million
Needed by 2035 20,000+ linacs Expanded software, service infrastructure Greatest need in lower and middle income countries (LMIC) 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.
Global Radiotherapy Gaps 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 *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.
People 60 Years and Older ( in Millions) Needs Growing Fastest Outside US, EU 1400 1200 103 103 1000 800 600 400 200 75 65 319 313 579 618 EU developed NA Other BRIC 0 Source: U.S. Census Bureau 2010 2030
Call to Action & LMIC Target CTA: 1. Population Based Cancer Control Plans TARGET: By 2020 80% of countries should have cancer plans that include radiotherapy.
Call to Action & LMIC Target CTA: 2. Expansion of Access to Radiotherapy TARGET: 25% increase in RT capacity from 2015 to 2025
Call to Action & LMIC Target CTA: 3. TARGET: Human Resources for Radiotherapy 23,000 radiation oncologists 33,300 RTTs and 10,000 medical physicists in LMIC by 2025
Call to Action & LMIC Target CTA: 4. Sustainable Financing to Expand Access to Radiotherapy TARGET: $46B of investment by 2025 to establish radiotherapy infrastructure and training in LMIC
Call to Action & LMIC Target CTA: 5. Align Radiotherapy TARGET: Access with Universal Health Coverage 80% of LMIC to include RT services as part of universal health coverage by 2020
Varian Market Development Expanding global team Partnering to build access to cancer care Governments Financiers Clinicians Patient advocacy groups Promoting awareness Lancet Oncology Commission Media outreach
The Varian Oncology Portfolio VitalBeam Radiotherapy System
IMAGE Not Yet Complete New Era Innovation Knowledge-Guided Oncology Intelligent Treatment Delivery Advanced Data Analytics
KNOWLEDGE-GUIDED ONCOLOGY: 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 Manual RapidPlan Time 60-90 min 15-20 min Equivalent Quality 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) 57 th Annual Meeting & Exhibition; July 12-16, 2015; Anaheim, CA. University of Michigan
KNOWLEDGE-GUIDED ONCOLOGY: Royal Surrey County Hospital: Prostate Study 350 Planning time (min) Manual RapidPlan Time 114 ± 86 min 21 ± 13 min Equivalent or better 40% 90% Better 10% 60% Courtesy, Royal Surrey County Hospital NHS Foundation, Guilford, UK Data source on file 300 250 200 150 100 50 0 A1A2A3A4B1B2C1D1D2D3E1E2E3F1F2F3F4F5F6 conventional RapidPlan
INTELLIGENT TREATMENT DELIVERY: The Next Big Milestone High Definition Radiotherapy Treatment Ideal: 100% of dose to the tumor; 0% to healthy tissue.
INTELLIGENT TREATMENT DELIVERY: Progress Made So Far & What s Next The Conformality Continuum TODAY HEALTHY TISSUE SPARED 3D CONFORMAL IMRT IGRT SBRT HDRT
INTELLIGENT TREATMENT DELIVERY: High Definition Radiotherapy (HDRT)
INTELLIGENT TREATMENT DELIVERY: Non-Coplanar Trajectories for Lung SBRT 64 Gy PATIENT 1 PATIENT 2 15 Gy IMRT VMAT NON-COPLANAR ARC Courtesy of Ke Sheng, UCLA
INTELLIGENT TREATMENT DELIVERY: High Definition Radiosurgery Brain Stem Brain Stem 50% Rx Dose 50% Rx Dose Coplanar RapidArc SRS 4π High Definition SRS
INTELLIGENT TREATMENT DELIVERY: Relative Clinical Value The Key To Progress: Better Dose Delivery MR LINAC 3D CONFORMAL IMRT IGRT SBRT HDRT
INTELLIGENT TREATMENT DELIVERY: Iterative CBCT Gaining Clarity Clinical CT Iterative TrueBeam CBCT 2.0
ADVANCED DATA ANALYTICS: 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
One Ecosystem. Infinite Possibilities.
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
Varian Particle Therapy Building Momentum
Patients Treated to 2030 Number of treatment rooms to increase by over 4x Proton Therapy World Market Report (Edition 2015), MEDraysintell.
Commitment History of Proton Program 1990s 2007 2009 2011 2014 2015 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 41 VARIAN PARTICLE THERAPY
Varian Projects Overview RINECKER PROTON THERAPY CENTER 4 Rotational Gantries and 1 Fixed Beam Room SCRIPPS PT CENTER 3 Rotational and 2 Fixed Beam Rooms UNIVERSITY OF MARYLAND 4 Rotational and 1 Fixed Beam Room KFMC-KING FAHD MEDICAL CENTER 3 Rotational and 1 Fixed Beam & 1Eye Tx GEORGIA PT CENTER (EMORY) 4 Rotational and 1 Fixed Beam Room PTC ST PETERSBURG, RUSSIA 2 Rotational Gantries 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 UK PROTON THERAPY CENTERS UCLH London - 3 Gantries The Christie Hospital, Manchester - 3 Gantries AARHUS PTC - DENMARK 2 Gantries NATIONAL TAIWAN UNIVERSITY 2 Gantries 1 Fixed Beam Room HOLLAND PTC 2 Rotational Gantries 1 Fixed Beam NEW YORK PTC 3 Gantries 1 Fixed Beam Rm 1 RR 42 VARIAN PARTICLE THERAPY
Hitachi - 3 Varian - 22 IBA - 17 2015 Treatment Rooms Ordered Varian Establishing Market Leadership Position ProNova - 4 Sumitomo - 1 43 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 44 VARIAN PARTICLE THERAPY
Commitment - Legacy of Investment in Innovation Annual R&D Expenses $30M $170M Synergies with Particle Therapy: Novel Imaging Techniques Workflow Optimization Motion Management Treatment Planning User Interface Competitor Varian Particle Therapy Varian Oncology Systems 45 VARIAN PARTICLE THERAPY
ProBeam : Integrated Workflow Treatment Decision Planning OIS Treatment Delivery Protons ProBeam 4D Console Eclipse ARIA Photons TrueBeam 4D Console 46 VARIAN PARTICLE THERAPY One Database
What s Next Cost and Size Reduction Workflow Enhancements Streamlining Installation, Commissioning 47 VARIAN PARTICLE THERAPY
Varian Particle Therapy at ASTRO 2015 Featuring Compact, Varian s Integrated Single-Room Solution ProBeam ARIA ECLIPSE 48 VARIAN PARTICLE THERAPY
Questions & Answers