Covidien Backs Safe Use of Opioid - Analyst Blog

By Zacks Equity Research,

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Leading medical instruments and supplies company Covidien plc. ( COV ) has extended its support for the recently announced Sentinel Event Alert issued by The Joint Commission regarding "safe use of opioids in hospitals." Opioids are drugs given to patients as pain killers, which have adverse side effects such as respiratory complications.

The Joint Commission publishes Sentinel Event Alert for its accredited hospitals and health care professionals, in which it recognizes specific types of sentinel events, explains their cause and recommends preventive measures. This particular issue provides a number of suggestions that can be taken to avoid the risks associated with opioid use among hospital in-patients.

According to the publication, hospitals need to accurately ascertain the pain level in patients and constantly supervise patient's ventilation and oxygenation utilizing capnography and pulse oxymetry devices.

The Institute for Safe Medication Practices (ISMP) and the Anesthesia Patient Safety Foundation (APSF) also recommend similar guidelines pertaining to constant post-operative supervision of oxygenation and/or ventilation of patients receiving opioids.

Covidien has a history of developing and manufacturing high-quality products in a cost-effective manner. The company boasts of a well-diversified product and technology portfolio.

Through this alliance, Covidien plans to promote its leading capnography devices product portfolio from its Respiratory and Monitoring Solutions business. These products can diagnose respiratory distress and hypoventilation at an early stage, thereby enhancing physician efficiency and patient safety. Covidien offers state-of-the-art respiratory products such as the Integrated Pulmonary Index and the latest Nellcor pulse oximetry solutions.

Covidien is well placed to achieve its long-term revenue and earnings growth targets based on its attractive fundamentals, effective execution, new product cycle, synergies of acquisitions and expansion into emerging markets. Moreover, its share buyback initiative is accretive to earnings.

However, sustained pricing/procedure volume pressure, fluctuating foreign exchange rates, a sluggish U.S. and European economy represent major headwinds. Covidien's larger Medical Device unit overlaps with the business of its competitors like Johnson & Johnson ( JNJ ), Becton Dickinson ( BDX ) and C.R. Bard ( BCR ). We currently have a Neutral recommendation on the stock, which carries a short-term Zacks #3 Rank (Hold).

BARD C R INC (BCR): Free Stock Analysis Report
BECTON DICKINSO (BDX): Free Stock Analysis Report
COVIDIEN PLC (COV): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: BCR , BDX , COV , JNJ

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