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Covidien Launches Vessel Sealing Devices

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Covidien plc has launched two vessel sealing that are superior to their predecessors in terms of handling, control and performance. The products are LigaSure Impact curved large jaw open sealer/divider LF4318 and LigaSure blunt tip laparoscopic sealer/divider LF1637.

The LigaSure Impact device promises an advanced surgical experience with improved visibility, more intuitive jaw positioning and enhanced ergonomics. On the other hand, the LigaSure blunt tip laparoscopic sealer/divider ensures better handling, and compact and ergonomic grip for better comfort and control for various hand sizes.

Both the products have received 510(k) clearance from U.S Food and Drug Administration (FDA) earlier this year. They are designed for colorectal, general, gynecologic, urologic and thoracic surgeries.

Covidien’s LigaSure products, introduced in 1998, combined with the ForceTriad energy platform utilizing TissueFect sensing technology, provides a variety of desired tissue effects. This technology is a proprietary control system designed by COV to manage energy delivery.

Recently, Covidien announced plans to reduce costs by outsourcing services to low-cost regions and consolidating manufacturing and distribution centers. The company expects to generate savings of $250 million–$300 million annually from the cost reduction measures from the beginning of fiscal 2014. Savings are expected to accelerate in fiscal 2015.

COV anticipates the majority of the restructuring measures to be completed by the end of fiscal 2018. The company expects to incur charges of $350 million–$450 million due to the restructuring, mostly by the end of fiscal 2018.

Recently, the manufacturer of medical devices and supplies also declared a 23% rise in dividend to 32 cents from 26 cents per share, which is payable on Nov 5 to shareholders of record as on Oct 10, 2013.

Covidien posted flat adjusted earnings per share from continuing operations of 91 cents for the third quarter of fiscal 2013, on a year over year basis. However, earnings beat the Zacks Consensus Estimate by a penny.

Revenues in the quarter increased 3% (up 5% in constant currency) to $2,578 million, driven by higher sales in the Medical Devices segment. Revenues were slightly below the Zacks Consensus Estimate of $2,587 million.

Currently, COV carries a Zacks Rank #3 (Hold). While we remain on the sidelines regarding the company, other medical products companies that are performing well include Bio-Rad Laboratories, Inc. (BIO - Free Report) with a Zacks Rank #1 (Strong Buy), and diaDexus, Inc. and Hill-Rom Holdings, Inc. (HRC - Free Report) , both with a Zacks Rank #2 (Buy).

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