J.P. Morgan Healthcare...

J.P. Morgan Healthcare Conference

Dow Wilson

Chief Executive Officer

Chris Toth

President, Oncology Systems

January 7, 2019

This presentation is intended exclusively for investors.It is not intended for use in Sales or Marketing.

Forward-Looking StatementsExcept for historical information, this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements

concerning industry outlook, including growth drivers, future trends in cancer incidence and trends in cancer treatment needs, demand, innovation and growth opportunities; Varian

Medical System, Inc.’s (”Varian” or the “company”) future orders, revenues, backlog or earnings growth; future financial results; market acceptance of or transition to new products or

technology such as our Edge® radiosurgery system, TrueBeam®, HyperArcTM, 360 OncologyTM, HALCYONTM, image-guided radiation therapy, stereotactic radiosurgery and proton

therapy, and any statements using the terms “could”, “believe”, “expect”, “outlook”, “anticipate”, ”vision”, “estimate”, “future”, “horizon”, “aiming”, “driving”, “target” or similar

statements are forward-looking statements that involve risks and uncertainties that could cause the company’s actual results to differ materially from those anticipated. Such risks

and uncertainties include global economic conditions and changes to trends for cancer treatment regionally; new and potential future tariffs or a global trade war; the impact of

changes to the Affordable Health Care for America Act (including excise taxes on medical devices) and any further healthcare reforms (including changes to Medicare and

Medicaid), and/or changes to third-party reimbursement levels; currency exchange rates and tax rates; the impact of the Tax Cuts and Jobs Act; demand for the company’s products;

the company’s ability to develop, commercialize, and deploy new products; the company’s ability to meet Food and Drug Administration (FDA) and other regulatory requirements for

product clearances or to comply with FDA and other regulatory regulations or procedures, changes in the regulatory environment, including with respect to FDA requirements; the

company’s assessment of the goodwill associated with its proton business, challenges associated with the successful commercialization of the company’s proton business; the risks

associated with providing financing for the construction and start-up operations of proton therapy centers; the effect of adverse publicity; the company’s reliance on sole or limited-

source suppliers; the company’s ability to maintain or increase margins; the impact of competitive products and pricing; the potential loss of key distributors or key personnel;

challenges to public tender awards and the loss of such awards or other orders; and the other risks listed from time to time in the company’s filings with the Securities and Exchange

Commission, which by this reference are incorporated herein. The company assumes no obligation to update or revise the forward-looking statements in this presentation because

of new information, future events, or otherwise. Reconciliations to GAAP financials can be found in our earnings press releases at www.varian.com/investors.

Medical Advice DisclaimerVarian as a medical device manufacturer cannot and does not recommend specific treatment approaches. Individual treatment results may vary.

FOR INVESTOR USE ONLY2

http://www.varian.com/investors

VARIAN CONFIDENTIAL/ PROPRIETARY: DISCLOSED SOLELY FOR IMMEDIATE RECIPIENT ONLY

$2 TrillionGlobal Economic Burden in 2010

$$$24.6 MillionNew Cancer Cases by 2030

10%Cancer Patients That Have Access

To RT in Low Income Countries

> 20,000*Linacs Needed by 2035; Greatest

Need in Low + Mid-Income Countries

80%Global Cancer Burden

in Low + Mid-Income Countries

Global cancer burden

Source: Expanding global access to radiotherapy. Lancet Oncol. Vol 16, Sept. 2015

*8,700 new machines plus 13,100 replacements = 21,800 additional machines needed

50 - 60%Cancer Patients Requiring RT


MEDICAL AFFAIRS | VARIAN CONFIDENTIAL – INTERNAL USE ONLYFOR INVESTOR USE ONLY

Varian today – FY 2018 snapshot

Global leader in radiation therapy

>3M patients touched per year

8,000+ linac installed base

5,000+ unique software customers

~7,000 employees worldwide

Headquartered in Palo Alto, CA

Founded in 1948Varian>50%

Rest of Market

CompanyOverview




Installed Base and Market Share

1 Varian market share for Oncology Systems orders and revenue is over 50% based on public company filings.

Q4 FY17 Q4 FY18

7,833

8,057

+224

Varian>50%

Rest of Market

Linac Installed Base Market Share1




Varian>50%

Rest of Market

1 GAAP to Non-GAAP reconciliation is disclosed in Varian’s fiscal year 2018 fourth quarter earnings press release and furnished to the Securities Exchange Commission (“SEC”) in a Form 8-K

on October 23, 2018.

Key Financial Metrics

FY 2018 $M Y/Y Y/Y CC

Revenues 2,919 +11% +10%

R&D% Revenue

2348.0%

+11%

Non-GAAP Operating Earnings1

% Revenue517

17.7%+31%

Cash Flow from Operations 455 +14%

Oncology Gross Orders 3,114 +9% +8%




1 Software product type includes software services. Total combined hardware and software services revenues of ~$1.35B make up ~45% of total revenues.

$2.9BRevenue Mix+11% (+10% cc) in FY18

Hardware~45%

+13% in FY18

Services~35%

+12% in FY18

Software~20%

+8% in FY18

EMEA~30%

+24% (+18% cc)in FY18

Americas~50%

+7% (+7% cc)in FY18

APAC~20%

+5% (+4% cc)in FY18

Revenues by Product Type1 Revenues by Geography


Innovation leader in radiation therapyIntegrated hardware and software solutions

Treatment

Delivery &

Imaging

Hardware

makes up

~45% Varian’s

business

BRACHYTHERAPY HALCYON PROTONSTRUEBEAM FAMILY ADAPTIVE THERAPYWorks in progress;

not available for sale

Services

Services make

up ~35%

Varian’s

business

HARDWARE & SOFTWARE SERVICES

Digital

Health

Solutions

Software

makes up

~20% Varian’s

business

TREATMENT PLANNING &

CANCER CARE MANAGEMENT


Long-term growth and value creation strategy

Global Leaderin Radiation Therapy

Radiation

oncology OISRadiosurgery

Brachytherapy

Radiation

oncology

treatment

planning

Proton therapy

Radiation

therapy

Global Leaderin Multi-Disciplinary,

Integrated Cancer Care Solutions

Interventional

oncology

Surgical

oncology

Diagnostic

imaging

Radiation

oncology

Precision

medicine

Medical

oncology

Generate

insights

Call on all

oncologists

Aggregate

data

Disseminated

insights

Build AI/ML

capabilities


How we plan to achieve our strategy

Long-Term Growth and Value Creation Strategy

Strengthen

Leadershipin Radiation Therapy

ExtendGlobal Footprint

ExpandAddressable Market

Growth Priorities

High Quality

Care Through

Innovation

Build Software

Services &

Big Data

Expertise

Operational

Efficiency

Optimize Cash

Conversion &

Capital

Structure

Strategic Enablers

We Are Here

Global Leader

in Radiation

Therapy

Global Leader in

Multi-Disciplinary,

Integrated Cancer

Care Solutions

Where We Are Headed


FOR INVESTOR USE ONLY


Executing on long-term growth strategy

• TrueBeam, ARIA, and Eclipse

named 2018 Best in KLAS category

leaders

• Launched Halcyon 2.0 with kV

CBCT imaging

• Acquired Mobius Medical Systems

and humediQ

Recent accomplishments, FY 2018+

Strengthen Leadership in Radiation Therapy

• Nov ’18 - Secured China NMPA

approval for Halcyon

• Acquired leading local distributor in

Taiwan

• Opened new facility in Brazil

• Developed ARIA CCIP (localized)

software to leverage growth in China

• Channel investments fueling growth

via portfolio and geography

ExtendGlobal Footprint

• Acquired Evinance Innovation and

Noona Healthcare to enhance 360

Oncology capabilities

• Launched 360 Oncology multi-

disciplinary tumor board

• Launched Velocity 4.0 with

RapidSphere for the interventional

oncology market

ExpandAddressable Market

11

Cooperative CL Enterprises (COOP)


Organizing for future growth and successExpanded roles for Varian business leaders

• Focus on driving further growth

• Expand Proton Solutions offering

• FlashForward

• Acquisition

Integration Office

• Strategic Program

Management

Kolleen KennedyChief Growth OfficerPresident, Proton Solutions

• Build SaaS & cloud solutions

• Use informatics to create customer value

• Automation-based services

Corey ZankowskiSVP, Oncology Software Solutions

Chris TothPresident, Oncology Systems

• Build on the strong foundation of our core business

• Continue to aggressivelydrive global growth

• Enhance customer satisfaction

• Expand into new cancer care modalities

• Customer

Experience

initiatives


12

Varian Innovation

Winning in the Market

VARIAN CONFIDENTIAL – INTERNAL USE ONLY

Varian radiotherapy systems

TrueBeam® Family

>30% revenue growth in FY18

>2,000systems installed

Halcyon™ ProBeam®

182orders since launch

~40%greenfield sites

70rooms

>25%lower vault cost

with ProBeam® 360FOR INVESTOR USE ONLY14


Adaptive Radiotherapy

• Artificial Intelligence (AI) driven

• Multimodality imaging at the console− MR, PET, CT

• 4D prescriptions

• Designed to image and treat fast− Patient comfort

− High image quality

• Uncompromised delivery hardware

Note: Adaptive is works-in-progress and not available for sale in any market

Adaptive solution forevery patient

Voice of the Customer

✓Standard treatment slot

✓Multimodality imaging at the console

✓No compromise on treatment delivery

✓ Justifiable ROI (Affordability)



AI-driven multimodality adaptive therapyAll modalities – every patient – without compromise

MR Linac PET Linac CT Linac

Multimodality views exist today from same dataset outside of healthcare

Varian is bringing this to the treatment room

Varian AI-driven multimodality adaptivetherapy system

Note: Adaptive is works-in-progress and not available for sale in any market


VARIAN CONFIDENTIAL – INTERNAL USE ONLYProperty of Varian Medical Systems

Needs growing fastest outside U.S. and EU

17

People 60 years and older (in millions)

BRIC + 97%

20202010 20302015 2025


Source: Expanding global access to radiotherapy. Lancet Oncol. Vol 16, Sept. 2015

ROW + 81%

NA + 58%

EU DEVELOPED + 37%

319 517

313 618

65 103

75 103


Varian leadership in China & India

~ 10%

375 720

< 25%

~ 56%

73

RT License expansion (Cat A/B)

Growing private RT market

Oncology software localization

China2nd Largest

Market

~ 20%

109 220

< 20%

~ 60%

73

Ayushman Bharat (“Modicare”)

Growing private RT market

India4th Largest

Market

Source: Internal data; Chinese market share is based on public tender wins per the Ministry of Commerce of the People’s Republic of China

Revenue CAGR (2013 2018)

Installed Base (2013 2018)

RT Utilization

Market Share (Orders) in FY18

Customer NPS

Key Growth Drivers



Changing clinical practice addressing growing cancer burdenIncreasing demand for Varian technology

Source: Internal estimates

*Estimated radiotherapy utilization of ~60% in the U.S. in 2016 and 2030; outside the U.S., growing from 25% to 35%

SRS/SBRT utilization growing worldwide and driving demand for SRS/SBRT equipment

Patients treated with radiotherapy expected to more than double outside the U.S., driven by cancer burden and increased utilization*

Fractions demanded growing faster outside the U.S. and driving demand for high-quality radiotherapy

By 2030:

0

2

4

6

8

10

U.S. International

2030

2016

Patients Treated with RT (M) Fractions Demanded (M)

0

50

100

150

U.S. International

2030

2016

0%

20%

40%

60%

U.S. International

2030

2016

SRS/SBRT Utilization (%)

100%+ Increase in WW Fraction Demand by 2030


MEDICAL AFFAIRS | VARIAN CONFIDENTIAL – INTERNAL USE ONLY

Innovative solutions addressing market demandClinical realization to market impact

~$9B

Installed base

replacement opportunity*

TrueBeam® Halcyon™

~$3B

Software portfolio opportunity*

Eclipse™

Tx PlanningVelocity®

Image MgmtARIA®

Oncology EMR360 Oncology™

Care Coordination

New techniques / standards of

care driving replacement cycle

with TrueBeam® & Halcyon™

Disrupting our market with

data, software, services and

technology

Learning curve reduced and

quality increased with machine

learning RapidPlan™ software


*Based on company estimates

VARIAN CONFIDENTIAL/ PROPRIETARY: DISCLOSED SOLELY FOR IMMEDIATE RECIPIENT ONLY

Varian competitive replacements – FY13 to FY18Winning in both hardware and software

~30%

~30%

~40%

HardwareDeliverySystems

SoftwareInformation

Systems

SoftwarePlanningSystems

Replacements

of competitive

units

CompetitiveReplacements

>$1Borders

Hardware Delivery SystemsCompetitive replacements of

linacs, CyberKnife,TomoTherapy, & GammaKnife

>350units

Oncology Software SystemsCompetitive replacements of

information systems, treatment planning systems,

& stand-alone software

>650units


MEDICAL AFFAIRS | VARIAN CONFIDENTIAL – INTERNAL USE ONLY

Demographic shift driving increasing cancer burden & care needs

Varian innovation winning in a growing marketKey takeaways

1 Patient & clinician driven portfolio has never been stronger

2

3 Installed base fueling growth through replacement & expansion opportunity

4 Varian competitive replacement wins complementing market growth


Varian Leading

FlashForward

720,000

400 cGy

2,400 cGyTrueBeam

Clinac

ProBeam

Flash

720,000 cGy

0 cGy 100,000 200,000 300,000 400,000 500,000

Per min

10,000 cGy

Flash therapy delivers ultra high dose rates

Flash Range

40 Gy/sec – 120 Gy/sec

Note: Flash therapy is under preclinical research. It is not available for clinical use and there is no guarantee of future commercialization

Source: Varian internal data on machine performance



Note: Flash therapy is under

preclinical research. It is not available

for clinical use and there is no

guarantee of future commercialization

Flash spares normal tissue while maintaining tumor control

Source: Varian proprietary data

1Findings from published pre-clinical research suggest Flash increases normal tissue sparing compared to conventional dose rate and that tissue sparing was improved with increasing dose rates.

Published pre-clinical research re: tissue sparing includes Brain (Montay-Gruel et al Radiotherapy and Oncology 2017; Montay-Gruel et al Radiotherapy and Oncology 2018); Lung (Vozenin et al Science

Translation Medicine 2014), Gastrointestinal (Schuler et al IJROBP 2016), and Skin (Vozenin et al Science Translation Medicine 2014; Vozenin et al Clinical Cancer Research 2018).

Findings from published pre-clinical research suggest tissue sparing was improved with increasing dose rates. Published pre-clinical research re: tumor control includes Breast, Head & Neck and Lung

(Vozenin et al Science Translation Medicine 2014), Glioblastoma (Montay-Gruel et al Radiotherapy and Oncology 2015), and Squamous Cell (Vozenin et al Clinical Cancer Research 2018).

Normal tissue and tumor control studies underway in 800 mice and 200 rats (Lung, Brain, Head & Neck cancers)

Varian studies building on published pre-clinical research1

Flash reduces differential gene expression normally observed with radiation therapy

Tumor control was the same or better with Flash compared to conventional dose rate

Appro

xim

ate

tum

or

volu

me (

mm

^3)

Control (Untreated)(n=12)

20

40

60

0Proton Flash

(n=24)ConventionalProton (n=24)

50

30

10

70

Lung Cancer Tumor ControlCincinnati Proton Therapy Center

Normal Lung Tissue (24 hr)

Conventional Protons

Flash Protons

1,294

Up-regulatedgenes

37

639

40

Down-regulatedgenes

25

FlashForward™ Consortium

Sylvester Comprehensive Cancer Center

New YorkProton Center

Paul Scherrer Institute

Holland PTCParticle Therapy Centre

University College London

CincinnatiProton Therapy Center

Universityof MarylandDept of Radiation Oncology

EmoryProton Therapy Center

Proton International at UAB

The ChristieProton Therapy Centre

Penn Medicine

Danish CentreFor Particle Therapy

VU Medical CenterAmsterdam

FlashForward™ Consortium

Note: Flash therapy is under preclinical research. It is not available for clinical use and there is no guarantee of future commercialization

James M. Metz, MDProfessor and Chair

Radiation Oncology

Executive Director, OncoLink

Penn Medicine

There are very few

technologies that come

along that offer a

potential for

paradigm shift –Flash offers that

potential.

“

”



In summary, we are…

…Driving toward our vision of a world without fear of cancer

Delivering on our long-term growth and value creation strategy

Growing our net installed base

Extending our market-leading, best-in-class product portfolio

Becoming a global leader in multi-disciplinary, integrated cancer care solutions


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