The pharmaceutical unit of
) have recently agreed to co-endorse a prescription medicine called
the Sumavel DosePro in the U.S. The Sumavel DosePro is a
sumatriptan injection for treating migraine and cluster
Management at Mallinckrodt LLC, the Pharmaceuticals franchise of
Covidien, believes that this deal will be accretive to the
company's revenues by improving its best-in-class pain management
product portfolio. Moreover, as per the Zogenix management, the
co-promotional agreement will yield results by doubling the
existing customer base of Sumavel DosePro.
Per the deal, the U.S. sales team of Mallinckrodt will market
the medicine to its consumers till June 30, 2014. In return,
Zogenix will pay a percentage of the net product revenues generated
Revenues from Covidien's Pharma segment rose 4% to $508 million
in the recently reported second quarter of 2012. The growth was
primarily fueled by robust gains in the Specialty Pharmaceuticals
and Radiopharmaceuticals businesses.
Specialty Pharmaceuticals sales surged 34% to $142 million
spurred by solid revenues from generic products and higher sales of
branded offerings in the quarter. However, Active Pharmaceutical
Ingredients and Contrast Product sales dropped 6% and 12%,
respectively, due to lower narcotics sales and sluggish U.S.
markets, respectively. Revenues from Radiopharmaceuticals increased
7% on the back of healthy generator sales.
Covidien is a leading global health care products company with a
rich history of developing high-quality products in a
cost-effective manner. It competes with
Johnson & Johnson
), among others.
Covidien remains committed to rolling out new products and
technologies, focusing on emerging markets, and boosting market
share in core segments through investments in sales and marketing
infrastructure. It has launched 100 new products over the last five
years and is on track to introduce another 50 products over the
next two years.
However, sustained pricing/procedure volume pressure represents
a headwind. We are currently Neutral on the stock, supported by a
short-term Zacks #3 Rank (Hold).
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