In order to expand its business in the emerging markets,
medical device maker
) launched its first training and education center in India - The
Covidien Center of Innovation India (CCI India). The center will
offer training on advanced procedures and techniques to
clinicians using leading equipment and technology. Since the
announcement, the company's share price rose 1.3% after the
market closed yesterday.
COVIDIEN PLC (COV): Free Stock Analysis
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CCI India is the third training center of COV in an emerging
market, with two other centers located in Shanghai, China and
Osong, South Korea. Covidien has plans to open additional centers
in Istanbul, Turkey and São Paulo, Brazil in this year.
The Indian center is competent enough to train more than 5,000
healthcare professionals annually, both from within the country
and those coming in from the neighboring countries.
CCI India boasts of unique features like a surgical lab with
seven fully-equipped operating stations, combined with a
simulation lab for clinical scenario training and a human patient
simulator. Additionally, a well-stocked library, providing
medical professionals with access to the latest medical journals,
complete with four workstations is also part of the centre. The
training center also has an inbuilt auditorium with seating
capacity for 60 people, and equipped with a multimedia system to
make training sessions more effective and appealing.
The primary objective of CCI India is to increase awareness about
the spread of chronic diseases and expose medical professionals
to Covidien's devices adapted to the treatment of such diseases.
Treatment procedures include those that address vascular
diseases, metabolic disorders (obesity and Type II diabetes) and
This special focus on chronic diseases is justified. The World
Health Organization (WHO) in 2004 projected that more than 60
million people are likely to die due to chronic diseases across
India in the next 10 years. Deaths from chronic ailments,
especially diabetes, are estimated to increase by 35%. Moreover,
cardiovascular diseases, dyslipidemia and varied types of cancers
are widespread in the urban and rural areas, still inadequately
diagnosed and largely untreated.
Though the U.S and European markets are showing signs of
improvement, Covidien is continuously undertaking investments in
the emerging markets, with recent ones being made in China and
Brazil. COV recently announced double-digit growth in Brazil,
Russia, India, China (BRIC) countries, in spite of changes in the
reimbursement system and difficult comparisons in Russia.
We believe unique and innovative initiatives such as the one in
India will enable Covidien to gain a better foothold in the
emerging markets. Major healthcare devices companies are
competing against each other to tap the growing opportunities in
the emerging markets of China, Brazil and India.
Recently, COV announced its first-quarter fiscal 2014 adjusted
earnings per share from continuing operations of $1.00, up 3.09%
y/y. Earnings per share were 6 cents ahead of the Zacks Consensus
Estimate in the quarter. Total revenues in the quarter grew 2.80%
(up 5% in constant currency) to $2,639 million, exceeding the
Zacks Consensus Estimate by 1.4%.
Currently, COV carries a Zacks Rank #2 (Buy). Investors
interested in the medical industry can also consider stocks like
) carrying a Zacks Rank #1 (Strong Buy), and
Mead Johnson Nutrition Co.
), both carrying a Zacks Rank #2 (Buy).