International health care products major,
) has won the approval of the U.S. Food and Drug Administration
("FDA") for its motion-tolerant Nellcor pulse oximetry devices.
The system can effectively detect and diagnose acute and
potentially fatal breathing difficulties at an early stage,
thereby allowing faster treatment and elimination of respiratory
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The Nellcor devices from Covidien's oximetry and monitoring
products portfolio under the Medical Devices segment are designed
to pick up cardiac-based signals and hence is highly correlated
to the patient's physiology. Patient movement, noise and low
perfusion can hinder proper readings, which might lead to a delay
in treatment. The advanced motion-tolerant pulse oximeters
provide accurate readings, despite movements, resulting in
improved standard of care.
The Nellcor Bedside SpO2 Patient Monitoring System, Bedside
Respiratory Patient Monitoring System, and N-600x Pulse Oximetry
Monitoring System are the devices that have been cleared by the
FDA. The systems continuously monitor SpO2 as well as the pulse
rate for adult, neonatal and pediatric patients. In 2012, the
regulatory body had cleared the Nellcor Bedside SpO2 Patient
Monitoring System and the Bedside Respiratory Patient Monitoring
System for sale in the U.S.
The FDA approval underlines Covidien's commitment toward patient
safety across general as well as critical areas of hospital care.
The Nellcor pulse oximeters are the only FDA-approved devices
that are compliant with ISO 80601-2-61 (International
Organization for Standardization standards for pulse oximetry).
Additionally, the company will provide pulse oximetry training
through its new Professional Affairs and Clinical Education
Online Platform to support the safe use of motion-tolerant pulse
The FDA approval might soothe the current negative investor
sentiment on Covidien. The company recently provided a dismal
fiscal 2013 guidance, which complements its Zacks Rank #5 (Strong
Moreover, it is slated to spin-off its Pharmaceutical unit at the
end of Jun 2013. The Pharma business is performing well and
contributing significantly to the top line. Following its
divestment, Covidien will be left with only the Medical Devices
and Supplies businesses. Given the current difficult healthcare
environment, uncertainty looms over the growth prospects of these
While we strongly recommend investors to avoid this stock due to
the risks associated with the Pharma spin-off, other medical
stocks such as
) warrant a look. While Conceptus carries a Zacks Rank #1 (Strong
Buy), the other two stocks carry a Zacks Rank #2 (Buy).