INVESTOR MEETING ASTRO 2013

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1 INVESTOR MEETING ASTRO 2013 Webcast will begin 7:15 a.m. EDT SEPTEMBER 24, VARIAN MEDICAL SYSTEMS. ALL RIGHTS RESERVED.

2 Forward-Looking Statements Except for historical information, this news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Statements concerning industry outlook, including growth drivers; the company s future orders, revenues, backlog, or earnings growth; future financial results; market acceptance of or transition to new products or technology such as TrueBeam, EDGE and radiographic flat panel detectors, image-guided radiation therapy, stereotactic radiosurgery, filmless X-rays, proton therapy, and security and inspection, and any statements using the terms could, believe, outlook, 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; the impact of the Affordable Health Care for America Act (including excise taxes on medical devices) and any further health care reforms (including changes to Medicare and Medicaid), and/or changes in third-party reimbursement levels; currency exchange rates and tax rates; demand for the company s products; the company s ability to develop, commercialize, and deploy new products such as the TrueBeam and EDGE platforms; 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; challenges associated with the successful commercialization of the company s particle therapy business; the effect of adverse publicity; the company s reliance on sole or limited-source suppliers; the impact of reduced or limited demand by purchasers of certain X-ray products, including those located in Japan; 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 release because of new information, future events, or otherwise. 2 INVESTOR MEETING - ASTRO 2013

3 Agenda Welcome Dow Wilson, Chief Executive Officer Oncology Megatrends Kolleen Kennedy, Senior Vice President; President, Oncology Systems Clinical Advances Dr. Deepak Khuntia, Vice President, Medical Affairs 3 INVESTOR MEETING - ASTRO 2013

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5 5 INVESTOR MEETING - ASTRO 2013 Thank you

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11 ONCOLOGY MEGATRENDS Kolleen Kennedy, Senior Vice President; President, Oncology Systems 2013 VARIAN MEDICAL SYSTEMS. ALL RIGHTS RESERVED.

12 Overview Varian is the global radiotherapy leader Long-term demand for radiotherapy is increasing Healthcare megatrends drive our strategy for continued leadership and market expansion 12 INVESTOR MEETING - ASTRO 2013

13 13 INVESTOR MEETING - ASTRO 2013

14 Who We Are 6,300 employees $2.8B sales 3,000 software installs 7,000 medical linear accelerators 30,000 X-ray tubes 14 INVESTOR MEETING - ASTRO 2013

15 7,000 Varian Accelerators 60% of global installed base 2.8M patients treated annually 15 INVESTOR MEETING - ASTRO 2013

16 Oncology Megatrends Demographics Global Markets Minimally Invasive Digital Frontier Personalized Medicine 16 INVESTOR MEETING - ASTRO 2013

17 Add photo here of Varian employees Demographics 17 INVESTOR MEETING - ASTRO 2013

18 Global Cancer Burden Rising 27 million people The global cancer burden by 2050 is expected to grow to 27 million new cancer cases and 17.5 million deaths.* *American Cancer Society, Global Cancer Facts and Figures, INVESTOR MEETING - ASTRO 2013

19 Cancer in Women #1: Liver #1: Breast #1: Lung #1: Uteri Number 1 cancer incidence per 100,000, age normalized Sources: American Cancer Society, Globocan data 19 INVESTOR MEETING - ASTRO 2013

20 Cancer In Men #1: Lung #1: Liver #1: Stomach #1: Prostate Number 1 cancer incidence per 100,000, age normalized Sources: American Cancer Society, Globocan data 20 INVESTOR MEETING - ASTRO 2013

21 Worldwide Demographic Shift 1,600 1,400 1,200 1, Source: U.S. Census Bureau People 60 Years and Older in Millions +82% BRIC +97% Other BRIC NA EU Developed 21 INVESTOR MEETING - ASTRO 2013

22 22 INVESTOR MEETING - ASTRO 2013 Global Markets

23 10,000 Linacs Needed Radiotherapy Machines per Million People Over 64 Years * Machines include Linac and Cobalt Units Source: IAEA and World Health Organization 23 INVESTOR MEETING - ASTRO 2013

24 China Investing in Radiation Oncology 14% projected CAGR Units ~16% Patients Treated With RT Source: IPSOS database and analysis 24 INVESTOR MEETING - ASTRO 2013

25 Varian Investing in China Users Meeting 525 Customers 25 INVESTOR MEETING - ASTRO 2013

26 US Market Varian -- 68% of linac installations 38% sites plan to buy Source: IMV 2012/2013 Radiation Therapy Market Survey 26 INVESTOR MEETING - ASTRO 2013

27 USA Demand Rising Aging Population SRS/SBRT Healthcare Reform 27 INVESTOR MEETING - ASTRO 2013

28 Number of units USA Installed Base Aging 1,200 1, <5 years <5 5~9 5-9 Years 10~ Years 15~ Years >20 >20 Years Age in years 28 INVESTOR MEETING - ASTRO 2013

29 Varian Offers Broadest Capability Novalis Tx Neurosurgical and Radiosurgical Applications TrueBeam /TrueBeam STx Treatment Procedures with Ease, Speed and Accuracy Trilogy All-in-one Treatment System Clinac Versatile Treatment Platform UNIQUE Cost Effective Oncology Solution* Eclipse Treatment Planning System * Not for available for sale in all markets Cancer Treatment Advanced Radiotherapy IMRT, IGRT, RapidArc Brachy Therapy Radio Surgery ARIA Oncology Information System Proton Therapy Calypso Real-Time Tracking Technology* ProBeam Proton Therapy Systems Varian Brachytherapy Product Suite for Planning and Delivery EQUICARE CS Survivorship* Edge System Dedicated full-body Radiosurgery Platform* 29 INVESTOR MEETING - ASTRO 2013

30 Varian Addressing Market Gaps Equipment & Resources Training Experience Skills / Expertise Knowledge / Theory 30 INVESTOR MEETING - ASTRO 2013

31 Add photo here of Varian employees Minimally Invasive 31 INVESTOR MEETING - ASTRO 2013

32 Radiosurgery SRS/SBRT Surgery without a trace 32 INVESTOR MEETING - ASTRO 2013

33 330 Radiosurgery Adoption Rising SRS/SBRT National Forecast US Adult Market, , in thousands % increase projected Source: SG2 Consulting, Skokie, Illinois, U.S. 33 INVESTOR MEETING - ASTRO 2013

34 Lung Leading Expansion Projected 10-Year Growth in SRS/SBRT Radiosurgery O Lung Brain/CNS 0 20K 40K 60K 80K Prostate GI Bone mets Head and Neck 140% increase in lung procedures Source: SG2 Consulting, Skokie, Illinois, U.S. 34 INVESTOR MEETING - ASTRO 2013

35 The Edge Radiosurgery Suite 35 INVESTOR MEETING - ASTRO 2013

36 36 INVESTOR MEETING - ASTRO 2013 Digital Advances

37 Digital Advances Mobility Telemedicine Big Data Decision Support 37 INVESTOR MEETING - ASTRO 2013

38 Digital Advances With you every step of the way from diagnosis to survivorship 38 INVESTOR MEETING - ASTRO 2013

39 Introducing RapidPlan Improving Quality and Speed of Treatment Planning Beginner Increase Confidence Good starting point Experienced Improve Consistency Clinician skills & experience Busy clinics Increase Efficiency Clinical trials Increase Participation Increase Consistency 510(k) Pending not available for sale 39 INVESTOR MEETING - ASTRO 2013

40 RapidPlan -- How it Works Patient Case Share cases with colleagues. Improve quality of care globally. New patient Reference case match Reference Case Add to Knowledge Base Auto contour Local Knowledge Base Contours morphed from Expert Case Evaluate against prior experience Auto Evaluation Auto plan Target Cord Parotid IMRT Dose distribution derived from prior experience 510(k) Pending not available for sale

41 Knowledge-Based Planning Best practice models for IMRT, RapidArc, and SBRT More efficient creation of high-quality treatment plans Ability to create practice standards 41 INVESTOR MEETING - ASTRO 2013

42 Oncology Continuum Solutions Solution Categories Data- and analyticsbased solutions for multiple segments Population Health Management Comparative Effectiveness Translation Medicine Safety and Surveillance $2.3B market opportunity Platform-based software solutions targeted at providers Decision Support Care Coordination Care Delivery 42 INVESTOR MEETING - ASTRO 2013

43 Add photo here of Varian employees Personalized Medicine 43 INVESTOR MEETING - ASTRO 2013

44 Personalized Medicine Targeted Therapies Molecular Imaging Genomics Patient Self-Care Equicare 44 INVESTOR MEETING - ASTRO 2013

45 Treatment Paradigm: Genetic profiling & population based analytics Earlier diagnosis leads to improved outcomes Precision medicine enabled by innovation Cloud-based collaboration drives global best practices Survivorship programs thrive 45 INVESTOR MEETING - ASTRO 2013

46 Key Strategies Innovation Globalization Software Leadership Comprehensive Services Operational Excellence 46 INVESTOR MEETING - ASTRO 2013

47 Summary Varian is the global radiotherapy leader Long-term demand for radiotherapy is increasing Healthcare megatrends drive our strategy for continued leadership and market expansion 47 INVESTOR MEETING - ASTRO 2013

48 CLINICAL ADVANCES AND FUTURE OPPORTUNITIES IN RADIOTHERAPY Dr. Deepak Khuntia, Vice President, Medical Affairs Varian Medical Systems 2013 VARIAN MEDICAL SYSTEMS. ALL RIGHTS RESERVED.

49 Highlights of the Last Decade Multileaf Collimators (MLC) On-Board Imager (OBI) High Definition MLC RADIOSURGERY SUITE 49 INVESTOR MEETING - ASTRO 2013

50 Brain Stereotactic Radiosurgery Survival in patients with single metastasis Survival by treatment unit Patients receiving SRS boost live longer versus traditional radiation alone Linac and Cobalt SRS equivalent The Lancet, Vol. 363, May 22, INVESTOR MEETING - ASTRO 2013

51 Prostate SBRT on the Rise! ASTRO SBRT MODEL POLICY 4/17/2013 It is ASTRO s opinion that data supporting the use of SBRT for prostate cancer have matured to a point where SBRT could be considered an appropriate alternative for select patients with low to intermediate risk disease. 51 INVESTOR MEETING - ASTRO 2013

52 Head and Neck Cancer: Targeted Drugs Improve RT Outcome Median survival rises from 14.9 months to 24.4 months Radiotherapy plus Cetuximab for Squamous- Cell Carcinoma of the Head and Neck Post Thoracic Surgery Neuropathy Source: Bonner et al, Courtesy NEJM, 345;6, of Paul Feb. Harari, 9, 2006 MD 52 INVESTOR MEETING - ASTRO 2013

53 Advanced IMRT: Sparing Memory Even low doses to hippocampus damages memory Avoiding hippocampus preserves memory Kempermann & Neumann Science 302: 1689 (2003) 53 INVESTOR MEETING - ASTRO 2013

54 Hippocampal Sparing Whole Brain RT Black area: Hippocampus Red contour: Hippocampal avoidance region Gondi et al. IJROBP.Vol 78, No. 4, pp , 2010 Gondi et al. ASTRO 2013 Plenary Session 54 INVESTOR MEETING - ASTRO 2013

55 SBRT Now Being Used for Pancreas! 55 INVESTOR MEETING - ASTRO 2013

56 Radiation Medicine: New Opportunities Emphysema Cardiac Arrhythmia (atrial fibrillation) Depression Post Thoracic Surgery Neuropathy Plantar Fascitis 56 INVESTOR MEETING - ASTRO 2013

57 Arrhythmia: A Non-invasive Approach Normal Sinus Rhythm Atrial Fibrillation 57 INVESTOR MEETING - ASTRO 2013

58 Functional Disorders: A Hopeful Outlook? Pioneering Work in: Epilepsy OCD Depression Cluster headaches 58 INVESTOR MEETING - ASTRO 2013

59 QUESTIONS AND ANSWERS 2013 VARIAN MEDICAL SYSTEMS. ALL RIGHTS RESERVED.

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