Covidien Next-Gen Ventilator Gets CE Mark - Analyst Blog


Covidien plc ( COV ), a leading global healthcare products company, recently secured the European Economic Area (EEA) CE Mark approval for its Puritan Bennett 980 ventilator. In a couple of trading days following the announcement, Covidien's stock rose 0.7% to close at $71.40 yesterday.

Engineered to help patients breathe more naturally, the Puritan Bennett 980 Ventilator boasts some of the most innovative breath delivery technologies available. Designed in a simple, safe and smart way, it aims at improving patient comfort and clinician ease of use. It is suitable for patients ranging from neonatal to adult stages.

The Puritan Bennett 980 ventilator features an intuitive and highly configurable touch screen, advanced connectivity, safety measures, patient monitoring and unique synchrony tools.

Patients on mechanical ventilation are often sedated to ease agitation and make them tolerant to breath support and other medical interventions. Puritan Bennett 980 can be adjusted by physicians to suit individual patient needs and provide appropriate level of breath support with the aid of its advanced synchrony tools.

The Puritan Bennett 980 ventilator received the U.S. Food and Drug Administration (FDA) 510(k) clearance, last month. It was also approved for commercial distribution in the U.S., Japan and Canada and will be available for sale in these countries as well as in EEA in the coming months.

For the first quarter of fiscal 2014 ended Dec 27, 2013, Covidien reported adjusted earnings per share from continuing operations of $1.00, up 3.1% year over year and 6 cents ahead of the Zacks Consensus Estimate. The company reported a 2.8% rise in total revenues to $2,639 million, exceeding the Zacks Consensus Estimate by 1.4%.

Two of Covidien's product segments, namely, Surgical Solutions and Vascular Therapies reported a 5.6% and 2.2% increase in revenues, respectively. However, revenues from the Respiratory and Patient Care segment slipped 0.4% during the quarter.

Within Respiratory and Patient Care, the Airway & Ventilation category revenues were down 7.1% year over year to $182 million. The decline was due to lower revenues from ventilation products, primarily in Russia. With the launch of the new acute care ventilator, management expects revenues from ventilation product line to rebound in the latter half of the year. Regulatory approvals should considerably boost revenues in the Airway & Ventilation product line going forward.

Additionally, Covidien is focusing on innovation and strong execution of new products along with expansion in emerging markets and customer-focused portfolio management, all of which are set to drive growth.

Currently, Covidien carries a Zacks Rank #2 (Buy). Some other stocks worth considering in the medical products industry include Enzymotec Ltd. ( ENZY ), Stryker Corp. ( SYK ) and Surmodics Inc. ( SRDX ). While Enzymotec holds a Zacks Rank #1 (Strong Buy), both Stryker and Surmodics carry a Zacks Rank #2 (Buy).

COVIDIEN PLC (COV): Free Stock Analysis Report

ENZYMOTEC LTD (ENZY): Free Stock Analysis Report

SURMODICS (SRDX): Free Stock Analysis Report

STRYKER CORP (SYK): 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 The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: EEA , COV , ENZY , SRDX , SYK

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