International health care product major,
) recently revealed the commercialization of its OneShot Renal
Denervation System. This offering is used to treat hypertension.
OneShot received CE Mark approval in early 2012. It will be
launched in EMEA and Latin America in the next few
Hypertension afflicts about a billion people globally. It is a
chronic state that places victims at greater risk of heart
disease, kidney problems and stroke. 10% to 15% of hypertension
patients do not respond to standard therapy. Such patients are
expected to benefit from OneShot, which is an offering with less
procedure time than other options.
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
Covidien currently carries a Zacks Rank #3 (Hold).
) are some related Zacks Rank #1 (Strong Buy) stocks which are
expected to do well.
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