FDA Lowers Risk-Label on Covidien's PillCam - Analyst Blog
) scaled up nearly 1.0% after U.S. Food and Drug Administration
(FDA) lowered the risk profile of PillCam endoscopic camera,
produced by the company's subsidiary Given Imaging. Given Imaging
had sent a petition for the downgrade in Nov 2012.
FDA has now classified the PillCam as a Class II device. This lowers the reviewing criteria of the device from the premarket approval to the 510(k) premarket notification process. Previously, FDA has allowed Given Imaging to sell the device only as a back-up for patients who are incapable for a complete colonoscopy through traditional means.
Given Imaging's PillCam is a capsule endoscope capable of capturing image of the digestive system when it is ingested. Per the FDA, risks associated with the device include tissue reactions, failure to excrete the device, equipment malfunction and abdominal pain, nausea, vomiting and choking.
FDA stated that establishment of special controls could mitigate the risks without the need for stricter review. These special controls include bite, pH resistance and shelf-life testing as well image color-performance, electromagnetic compatibility, and battery life testing.
Covidien posted a 3.2% rise in fiscal 2014-second quarter adjusted earnings per share to 96 cents from 93 cents a year ago, beating the Zacks Consensus Estimate by a penny. The marginal rise in earnings was attributable to adverse impacts from foreign exchange movements and the medical device excise tax. Net earnings, however, fell 2.2% to $435 million from $445 million due to decrease in weighted average shares outstanding.
Total revenues in the quarter grew 2.7% to $2,598 million, missing the Zacks Consensus Estimate of $2,610 million. On a geographic basis, revenues in the U.S. market increased 1.6% to $1,277 million. On the other hand, revenues from non-U.S. developed markets rose 1.8% to $938 million and from emerging markets went up 8.8% to $383 million.
Covidien reiterated its revenues outlook for fiscal 2014. Previously, Covidien had revealed that it expects revenues to grow 2-5% year over year at constant exchange rate (CER) for fiscal 2014.
Covidien currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the medical products industry that are also worth considering include Cardica Inc. ( CRDC ), Eagle Pharmaceuticals Inc. ( EGRX ), and Exactech Inc. ( EXAC ). All of them retain a Zacks Rank #2 (Buy).
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