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Covidien Launches Nellcor System

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Global innovator and manufacturer of health care products, Covidien plc (COV), has announced the U.S. Food and Drug Administration’s (:FDA) clearance for its Nellcor Bedside SpO2 Patient Monitoring System. The latest offering is now available for sale in the U.S.

Management is enthused about the market launch of its Nellcor Bedside SpO2 Patient Monitoring System. The new product is an addition to the company’s oximetry and monitoring products under the Medical Devices business segment. The latest addition to the company’s wide portfolio underlines its commitment towards patient safety across general as well as critical areas of hospital care.

The Nellcor Bedside SpO2 System is integrated with the company’s OxiMax technology. Covidien has built on the technology to promote critical care in clinical decision-making and thereby improved standards of care.

The system continuously monitors SpO2 as well as pulse rate for adult, neonatal and pediatric patients. Its use by healthcare professionals can lead to detection of subtle yet critical heart rate along with SpO2 variations at an early stage. This enables faster treatment and elimination of respiratory complications.

The Nellcor Bedside SpO2 System allows easy access to patients’ respiratory history, thereby allowing the clinicians to take a holistic view of patients’ respiratory function status. The system can effectively detect and diagnose acute and potentially fatal events to deliver efficient and improved standard of care.

Covidien’s latest offering also includes enhanced digital signal processing for precise SpO2 observation even under low perfusion and other demanding conditions when it would otherwise not be possible to track these patients.

The SatSeconds alarm integrated into the system can distinguish minor events from those acute events which demand immediate attention. This will result in a reduction of clinically inconsequential oxygen desaturation alarms. The alarm management feature further enhances patient care and safety.

Other meritorious features of the Nellcor Bedside SpO2 System are that it meets the safety standards for medical electrical equipment including IEC 60601-1:2005 and complies with Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS) directive for products sold in European Economic Area markets.

The system has a multicolor screen that allows effortless observations. With a replaceable battery and additional features, it has been designed to save time and resources of the clinicians and the hospitals.

The Nellcor Bedside SpO2 System is yet another addition to Covidien’s Medical Devices business segment. The Medical Devices segment comprised nearly 69% of net sales in the most recent quarter with segment revenue increasing 4% year over year to $2,063 million, driven by higher volume sales as well as new products.

Covidien's larger Medical Device unit overlaps with the business of its competitors like Johnson & Johnson (JNJ), Becton Dickinson (BDX) and C.R. Bard (BCR).

Covidien plans to bolster its sales with the help of strategic acquisitions and successful launch of its new products. It remains committed to rolling out new products and technologies consistently. Management expects that a focus on product innovation and aggressive portfolio management will yield positive results in the long run.

However, sustained pricing/procedure volume pressure, fluctuating foreign exchange rates, sluggish U.S. and European economies represent major headwinds.

The stock currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. This is in agreement with our long-term Neutral recommendation.

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