Recently,
Covidien plc.
's (
COV
) electroencephalography (EEG)-based monitors, especially the
Bispectral Index ("BIS") monitor, was recommended by UK-based
National Institute for Health and Clinical Excellence ("NICE").
These devices belong to the company's Respiratory and Monitoring
Solutions product line, and are used to measure the level of
anesthesia during surgeries.
The NICE Diagnostics Guidance is supported by reliable clinical
proofs and a report by the University of Southampton's
Southampton Health Technology Assessment Centre. Several medical
device manufacturers and healthcare institutes also recommended
Covidien's monitors.
The guidance is specifically intended for patients with high risk
of deep anesthesia or unintended awareness. Further, the device
can be used during general surgeries as well as for patients
receiving total intravenous anesthesia.
The recommendation from the prestigious NICE organization should
further boost customer confidence in Covidien's innovative and
cost-effective product line. It will benefit the company's
Oximetry and Monitoring business under the core Medical Devices
division to expand in U.K. However, the product line faces tough
competition such as the E-Entropy and Schiller Narcotrend-Compact
M brain monitoring technologies developed by GE Healthcare, a
unit under
General Electric Company
(
GE
).
The BIS Brain Function Monitoring Systems are capable of
measuring the exact level of consciousness in patients and hence
allows anesthetists to provide precise dosage of drugs to suit
individual patient's requirement. This reduces potential risks
and enhances patient's comfort. Some of BIS System's featured
products are the BIS Complete 2-Channel Monitor, the BIS Complete
4-Channel Monitor and the BIS Unilateral Sensors.
With a market-cap of $27.18 billion, Covidien is a leading global
health care products company with an impressive history of
developing and manufacturing high-quality products in a
cost-effective manner. The company boasts a well diversified
product and technology portfolio.
However, Covidien faces stiff competition and remains exposed to
pricing, utilization headwinds, along with acquisition risks. We
remain concerned about the tepid health services industry amid a
soft European economy. Also, foreign exchange translation is
expected to dampen sales growth.
We currently have a long-term Neutral recommendation on the
stock, which carries a short-term Zacks #3 Rank (Hold).
COVIDIEN PLC (COV): Free Stock Analysis
Report
GENL ELECTRIC (GE): Free Stock Analysis
Report
To read this article on Zacks.com click here.
Zacks Investment
Research