), a large-cap medical technology company, recently introduced
the AS Meniscal Repair Device intended to repair torn meniscus in
the knee. This latest offering from the company's sports surgery
product line further expands its minimally invasive arthroscopic
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The device's uniqueness lies in the fact that it employs an
"all-inside" technique along with the "all-suture" approach,
which is considered to be the gold standard for meniscal repair.
This reduces operating room time as well as enhances patient
Covidien's Bench-top tests further confirm that the AS Meniscal
Repair Device delivers outstanding holding power in comparison
with other leading competitive devices. Thus, the device helps
achieve better clinical efficiency.
As per the Millennium Research Group survey more than 840,000
meniscus repair surgeries were performed in the U.S. alone. The
research further predicted that fixation devices for such
procedures are likely to grow at an 8% compound annual growth
rate (CAGR) through 2015.
However, Covidien is likely to face competition from companies
Johnson & Johnson
) Depuy, which sell similar products in the market.
Moreover, the company remains exposed to pricing as well as
utilization headwinds. We remain concerned about the tepid U.S.
health services industry and the soft European economy, which has
led to fluctuating share prices.
Covidien is a leading developer, manufacturer and distributor of
medical devices and services on a global scale, with a market
capitalization of $27.25 billion. The company is adequately
placed to achieve its long-term revenue and earnings growth
targets based on its attractive fundamentals, strategic
acquisitions, effective execution, new product cycle and
expansion into emerging markets.
We currently have a 'Neutral' recommendation on Covidien, which
carries a short-term Zacks #2 Rank (Buy rating).