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New Company Forms With Support From University Of Pittsburgh Medical Center

PITTSBURGH, March 27, 2002 — Leading experts in radiation therapy today announced the formation of a new company, D3 Advanced Radiation Planning Services, that will greatly improve patient access to a promising cancer treatment called IMRT, or intensity modulated radiation therapy. Co-founded by University of Pittsburgh Medical Center, D3 will enable UPMC to rapidly implement IMRT throughout its extensive network of cancer centers that treat more than 25,000 patients annually.

IMRT is a state-of-the-art technology that enables clinicians to potentially improve outcomes for cancer patients by delivering extremely precise and shaped doses of radiation while protecting surrounding healthy tissue. A vast improvement over standard radiation, IMRT allows delivery of higher radiation doses to destroy cancer cells while minimizing normal tissue doses, thus limiting the adverse side effects from treatment.

Using software from Varian Medical Systems (NYSE:VAR), D3 will provide UPMC Cancer Centers with patient treatment plans over a telecommunications network as well as training and other medical physics services needed for IMRT. It will ultimately offer its services to hospitals and freestanding clinics across the nation. The result will be to give cancer clinics and patients easier and more rapid access to this advanced form of radiation therapy.

While the adoption rate of IMRT has been rapid, less than 5 percent of the world’s radiotherapy centers are now treating cancer patients with this technique. Establishing IMRT services requires physics expertise and sophisticated treatment planning capabilities as well as linear accelerators to administer the treatment.

To implement advanced radiation therapy, including IMRT, UPMC has signed an agreement with Varian Medical Systems to supply equipment, including state-of-the-art linear accelerators, as well as software, for all of the UPMC Cancer Centers. Economies of scale will be achieved by centralizing IMRT treatment planning through D3’s telecommunications network. The new radiation therapy equipment and software, and the telecommunications links to D3 services, will result in the largest fully integrated and comprehensive IMRT network in the world.

"IMRT is a great improvement on standard radiation, but it requires expensive equipment and broad clinical experience that makes its installation and use prohibitive for many community-based hospitals and clinics," explained Jeffrey Shogan, M.D., deputy director for business affairs at the University of Pittsburgh Cancer Institute (UPCI). "D3 will enable UPCI’s radiation oncologists to extend the highest quality in radiation treatment to patients in communities throughout western Pennsylvania where it was not previously accessible."

According to Ronald B. Herberman, M.D., director of UPCI and UPMC Cancer Centers and associate vice chancellor for cancer research, University of Pittsburgh, UPCI plans to launch the new company’s services throughout its cancer centers over the next several months. "We are excited to have the means to provide this type of advanced therapy to our patients," said Dr. Herberman. "Cancer patients are already burdened by many hardships that result from their diseases. The expense and inconvenience of travel to receive advanced treatment should not be an added burden. With the help of D3’s IMRT network and services, we will be able to ease patients’ burdens by offering them convenient access to one of the newest and most promising approaches to radiation treatment in their local hospital or clinic."

"As the world’s first radiation oncology telemedicine company, D3 is making it possible for medical institutions anywhere in the country to provide patients with highly sophisticated radiation therapy without having to buy treatment planning software," said Joe Nicholas, CEO of D3. "We will give clinics that lack physics resources or funding for new technology a means of implementing IMRT by combining centralized treatment planning with in-depth training on treatment delivery, verification and quality assurance protocols."

Clinics and hospitals working with D3 will use Varian’s SomaVision® software to identify tumors and transmit patients’ diagnostic images and dose prescriptions to D3. D3 will then use Varian’s Eclipse™ and Helios™ software to develop treatment plans that map out precise beam angles, beam shapes and exposure times needed to achieve the desired IMRT radiation dose intensities to the tumor. D3 will transmit the plans back to the clinics for approval by their radiation oncology staff, which administers treatment to the patient. Clinics will compensate D3 for treatment planning, and D3 will compensate Varian Medical Systems for the use of its software, on a "pay-per-plan" basis.

"The formation of D3 is an innovative and exciting development for radiation therapy," said Dick Levy, president and CEO of Varian Medical Systems. "It makes full use of Varian Medical Systems’ comprehensive network of equipment and software products for all forms of radiation therapy, including SmartBeam™ IMRT. It’s a big win for cancer clinics and their patients."

Radiation oncologists at UPCI, including Shalom Kalnicki, M.D., vice chairman for clinical affairs, department of radiation oncology, and Andrew Wu, Ph.D., director of medical physics at UPCI, were the first to introduce IMRT to patients in the greater Pittsburgh area. "UPMC Cancer Centers is currently one of the top five institutions in the country in its volume of patients being treated with IMRT," said Dr. Kalnicki. Dr. Kalnicki will serve as medical advisor for D3 and Dr. Wu will serve as its chief scientific officer.

For more information about D3, call 412-365-0710, or visit www.d3radiationplanning.com.

For more information about UPCI, call the Cancer Information and Referral Service at 1-800-237-4PCI (1-800-237-4724), or visit http://www.upmccancercenters.com/.

For more information about Varian Medical Systems, call 650-424-5782, or visit http://www.varian.com.

D3 Advanced Radiation Planning Services is a radiation oncology service company that assists health care facilities to plan, verify and deliver advanced radiation therapy treatments. D3 combines centralized treatment planning with in-depth training for IMRT treatment delivery, verification and quality assurance protocols to facilitate the transition into high quality IMRT without the need for additional staff.

University of Pittsburgh Medical Center, affiliated with the University of Pittsburgh Schools of the Health Sciences, is the leading integrated health care delivery system in western Pennsylvania, and one of the largest not-for-profit integrated health care systems in the United States. It meets comprehensive health care needs through UPMC hospitals -- the region's largest and finest network of tertiary, specialty, and community hospitals. The UPMC incorporates the University of Pittsburgh Cancer Institute (UPCI), a National Cancer Institute-designated comprehensive cancer center which is staffed by nationally and internationally recognized cancer care specialists that treat more than 25,000 patients per year.

Varian Medical Systems, Inc., (NYSE:VAR) of Palo Alto, California is the world’s leading manufacturer of integrated cancer therapy systems, which are treating thousands of patients per day. The company is also a premier supplier of X-ray tubes and flat-panel digital subsystems for imaging in medical, scientific, and industrial applications. Varian Medical Systems employs approximately 2,590 people who are located at manufacturing sites in North America and Europe and in its 50 sales and support offices around the world. In its most recent fiscal year ended September 28, 2001, Varian Medical Systems reported sales of $774 million. Additional information is available on the company’s investor relations web site at www.varian.com

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 1995. Statements concerning the expected benefits and market acceptance of new technology such as IMRT and new products and business models such as the "pay per plan" services offered by D3, and any statements using the terms "anticipate", "believe," "will," "hopeful," "continued," "should," "could," "expect," "estimating,"or similar statements are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include market acceptance and demand for IMRT and the D3 products and services; the impact of competitive products and pricing; the impact of health care reform and regulation and the other risks listed from time to time in Varian Medical Systems, Inc.’s filings with the Securities and Exchange Commission. Varian Medical Systems, Inc. assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.

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