Covidien Launches V-Loc - Analyst Blog

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On June 19, Covidien plc ( COV ), a global leader in medical devices and services, launched the world's first knotless suturing device named V-Loc. It is available as a reload for both laparoscopic and single-incision procedures.

This marks the latest addition to Covidien's bariatric surgery portfolio, which aims to improve both patient and surgeon experience associated with weight loss surgery and similar procedures. It is expected to enhance surgeon competency during bariatric and other procedures. V-Loc will be used in multi-port as well as single-port laparoscopic surgery with the company's Endo Stitch and SILS Stitch suturing devices.

The V-Loc suturing device is yet another addition to Covidien's Medical Devices business segment. Medical devices segment comprised 68% of net sales in the most recent quarter with segment revenue figures showing an increase of 7% year over year to $2,004 million. New products such as V-Loc and Endo GIA Radial Reload, HALO90 ULTRA Ablation Catheter, Versaport trocar and others launched earlier this year, are expected to accelerate segment growth.

The automated needle-passing technology integrated into the knotless suturing device is a marked improvement over conventional automated suturing and hand suturing. Bariatric surgery involves a number of surgical stapling and suturing steps to safeguard the anastomotic closure.

According to medical experts, laparoscopic suturing without the need to tie knots is the most important feature of the device. This is because it reduces the time taken for the most labor-intensive task of the bariatric surgery. The early use of V-Loc reloads with the Endo Stitch device resulted in increased surgical proficiency.

Its unique barb and loop design with Endo Stitch device enables quicker suturing without the need to tie knots. According to a clinical study, this saves surgeons time by 35%-42% compared to the original time required for conventional internal suturing. The studies further claim that proprietary Endo Stitch suturing device can save anywhere between 45% and 70% of the laparoscopic suturing time.

Covidien constantly attempts to improve patient outcomes by innovating and extending its product portfolio. Management expects the V-Loc knotless suturing device to increase procedural efficiency. Its commitment to the technologically progressive bariatric procedures is reflected in its broad portfolio of products and services to support bariatric patients as well as surgeons.

Additionally, the company announced new tools for its educational program Shaping a Better Future in Bariatric Surgery . Covidien has taken the initiative to educate patients and improve practice management. The educational program reflects Covidien's commitment and support of bariatric practices by providing necessary information to patients looking for clinically effective solutions.

Covidien plans to bolster its sales with the help of strategic acquisitions and successful launch of new products. It remains committed to rolling out new products and technologies consistently. Management expects that a focus on product innovation and aggressive portfolio management will yield positive results in the long run.

However, the company faces substantial competition from Becton, Dickinson and Company ( BDX ), Johnson and Johnson ( JNJ ) and CR Bard Inc . ( BCR ) and some smaller players. Also, the success of its new products relies on consumer demands and preferences.

The stock currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. This is in agreement with our long-term Neutral recommendation.


 
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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 The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BCR , BDX , COV , JNJ

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