FDA Approves Covidien's Micro Catheter - Analyst Blog

Covidien plc ( COV ) revealed that U.S. Food and Drug Administration (FDA) approved its micro catheter Apollo Onyx, which is capable of mitigating the challenges of catheter retrieval during Onyx LES embolizations of brain arteriovenous malformations (bAVMs). Apollo Onyx is the first detachable tip micro catheter available in the U.S.

A bAVM is an abnormal connection between arteries and veins acquired during fetal development. It occurs mainly in the brain or spine due to a tangle of abnormal arteries and veins. As per American Heart Association, roughly one in 200-500 people (mostly males) suffer from bAVMs.

Covidien's Apollo Onyx micro catheter helps physicians choose the best catheter position for each procedure. The catheter provides optimal navigability through complex distal anatomy as well as a proprietary detachable tip designed for easier catheter retrieval in challenging procedures.

Covidien will showcase the Apollo Onyx micro catheter at the Society of NeuroInterventional Surgery's (SNIS) 11th annual meeting. The SNIS meeting will be held in Colorado Springs, CO on July 28.

Recently, 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 device as 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 FDA, risks associated with the device include tissue reactions, failure to excrete the device, equipment malfunction and abdominal pain, nausea, vomiting, and choking.

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 for fiscal 2014.

Currently, Covidien 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 NeuroMetrix Inc. ( NURO ). All of them carry a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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