International health care product major,
) recently revealed approval from the Food and Drug
Administration ("FDA") for Gablofen (baclofen injection) in
syringes that are prefilled. These syringes were designed to cut
down on preparation time and make it easier for patients on
Intrathecal Baclofen Therapy. This drug is used to treat spastics
traced to spinal and cerebral causes.
According to the company, the new syringes may replace the
older glass ones and render the pump refilling process easier to
manage. Prefilled syringes of Gablofen will be marketed from
February 2013. The drug will be sold in vials in different
Covidien is a leading global health care product manufacturing
company that develops and markets medical solutions for better
patient outcomes. It has a history of developing and
manufacturing high-quality products in a cost-effective manner.
Covidien continues to expand both organically as well as
inorganically, despite a challenging Med-tech environment.
We see opportunities for multiple expansion, based on the
strength and diversity of the company's business and its ability
to grow on the back of strategic investments and portfolio
reshaping initiatives toward high-growth/high-margin businesses.
Additionally, the exit of a competitor has created opportunities
for the company to gain market share in the U.S.
Further, Covidien remains committed to delivering incremental
returns to its investors. The company raised its commitment to
return more than 50% of its free cash flow to shareholders via
dividends and share repurchases.
Covidien embarked on an acquisition spree to scoop up several
new companies for the diversification and development of new
products/technologies. Although we believe that the company's
acquisitions will pay off in the long term, we remain cautious
about the near-term dilution associated with the company's
Earlier, in October 2012, Covidien's Pharmaceuticals business,
Mallinckrodt, acquired CNS Therapeutics Inc., a St. Paul
Minnesota-based specialty pharmaceutical company, for roughly
$100 million. Covidien plans to spin-off its Pharmaceutical
business by mid-2013 to focus on its high-margin surgical
The company's product offerings under its larger Medical
Device segment are similar to some of its competitors like
Johnson & Johnson
Dickinson and Company
CR Bard Inc.
Covidien currently carries a Zacks Rank #3 (Hold).
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