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Covidien's ENB Adopted by ACCP

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Covidien plc (COV) revealed that the American College of Chest Physicians (ACCP) has included the company’s superDimension Electromagnetic Navigation Bronchoscopy (ENB) system in its guidelines for early detection and diagnosis of lung cancer.

With hardly any signs of symptoms at an early stage, lung cancer usually goes undetected for a prolonged period of time. This makes lung cancer the leading cause of death in the U.S. Lung cancer, if detected and treated at an early stage, can significantly increase long-term survival rate.

The one-of-a-kind ENB system is an effective and safe diagnostic platform for early detection of lung cancer. It became part of Covidien’s Endomechanical product portfolio with the acquisition of superDimension in 2012. The advanced technology of the system can access difficult areas of the lungs to collect tissue sample of lesions, which is usually unattainable by conventional bronchoscopes. Moreover, its minimally invasive technology is less morbid in comparison to more invasive procedures.

Covidien is a leading global health care products company with a history of developing high-quality products in a cost-effective manner. The incorporation of the ENB system in the ACCP guidelines further reinstates this commitment by the company.

However, the company recently provided a dismal fiscal 2013 guidance, which complements its Zacks Rank #5 (Strong Sell). Further, uncertainty regarding divestment of the Pharmaceutical unit at the end of Jun 2013 keeps us on the sidelines.

While we strongly recommend investors to avoid this stock, other medical stocks such as Conceptus (CPTS), Atricure (ATRC) and Myriad Genetics (MYGN) warrant a look. All the stocks carry a Zacks Rank #2 (Buy).

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