Covidien Unveils Vascular Products

Covidien plc. (COV - Analyst Report), a leading health care products company, recently introduced the Viance Crossing Catheter and Enteer Re-entry System in the U.S., the European Union and certain selected international markets. These devices are used for endovascular treatment of chronic total occlusions (CTOs) in peripheral arteries. The company announced this news at the Cardiovascular and Interventional Radiological Society of Europe (“CIRSE 2012”) Annual Congress.

These specially designed innovative tools enable surgeons to bypass difficult endovascular abrasions with enhanced precision. Its unique balloon technology in the re-entry system allows better maneuvering within the vessel.

The Viance Crossing Catheter and Enteer Re-entry System are expected to boost Covidien’s Vascular products portfolio under the Medical Devices segment. In the last reported quarter, Vascular product sales jumped 14% to $418 million, backed by outstanding growth across peripheral vascular and neurovascular offerings. These devices, together, are expected to further advance Covidien’s market-dominating peripheral products portfolio.

Covidien is a leading developer, manufacturer and distributor of medical devices and services on a global scale. Its business segments overlap with the business of its competitors such as Becton, Dickinson and Company (BDX - Analyst Report), Johnson and Johnson (JNJ - Analyst Report) and CR Bard Inc. (BCR - Analyst Report) among others.

Covidien remains committed to rolling out new products and technologies, focusing on emerging markets, and boosting market share in core segments through investments in sales and marketing infrastructure. In recent times, the company launched a number of new products such as the HALO90 ULTRA, V-Loc, Nellcor Bedside SpO2 Patient Monitoring System, and the iDrive Ultra to leverage its products portfolio.

Management expects that focus on product innovation, aggressive portfolio management and optimal spending on future investments will yield positive results in the long run.

However, sustained pricing/procedure volume pressure, fluctuating foreign exchange rates, a sluggish U.S. and European economy represent major headwinds. We currently have a Neutral recommendation on Covidien, which carries a short-term Zacks #3 Rank (Hold rating).