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Positive Data for COV's Solitaire

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International health care products major, Covidien plc presented encouraging data at the 2013 European Stroke Conference regarding the superiority of its endovascular offering, Solitaire FR revascularization device, in acute ischemic stroke treatment. The panel included stroke experts from Covidien’s Swift Prime, Escape Extend-IA and Revascat trials.

Clinical data from the randomized, controlled Swift trial showed that the Solitaire FR device is far superior to the Concentric Medical Retriever system, which is a first-generation clot retrieval device used in the Interventional Management of Stroke (IMS) III trial. Stryker (SYK - Free Report) had acquired Concentric Medical in 2011.

Covidien had initiated the Swift Prime study in Jan 2013. Deemed to be one of the largest global medical studies, the trial is examining the effectiveness of mechanical thrombectomy using the Solitaire device in stroke care.

Additionally, data from another Covidien-sponsored Star trial revealed that the next-generation Solitaire FR device can effectively treat stroke patients with a large vessel anterior occlusion.

Our Take

We are upbeat regarding positive data from various clinical trials indicating that mechanical thrombectomy is a better option for acute stroke treatment using Covidien’s advanced Solitaire FR offering compared to the first-generation devices.

According to the American Heart Association, stroke is the fourth leading cause of death in the U.S. Ischemic stroke occurs when a blood vessel carrying oxygen and nutrients to the brain is clogged.

The Solitaire FR device, an overlapping stent-based technology, mechanically removes blood clots from blocked vessels, restoring blood flow to the brain in patients ailing from stroke. The device had won the approval of the U.S. Food and Drug Administration (“FDA”) in Mar 2012 and is already approved outside the U.S. for the endovascular treatment of acute ischemic stroke, offering physicians with an innovative treatment technology over the existing therapy options.

The Solitaire FR offering from Covidien’s Vascular business, under the core Medical Devices segment, is gaining significant market share. This is substantiated by the 4% year-over-year growth in the Vascular business in the last reported quarter.

However, the company recently provided a dismal fiscal 2013 guidance, which complements its Zacks Rank #5 (Strong Sell). Further, uncertainty regarding divestment of the Pharmaceutical unit, at the end of Jun 2013, keeps us on the sidelines.

While we strongly recommend investors to avoid this stock, other medical stocks such as Haemonetics (HAE - Free Report) , carrying a Zacks Rank #1(Strong Buy), and Atricure (ATRC - Free Report) with a Zacks Rank #2 (Buy) warrant a look.

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