Leading health care products maker Covidien plc (COV) has inked an exclusive distribution pact with UK-based medical devices company Aircraft Medical. Under the agreement terms, the Ireland-based company will distribute Aircraft’s proprietary McGRATH MAC video laryngoscope across the U.S., UK, Japan, Latin America, Australia and New Zealand.
Covidien will showcase the McGRATH MAC laryngoscope at the “Anesthesiology 2011”, the annual meet of the American Society of Anesthesiologists (“ASA”), in Chicago on October 15-19.
The collaboration, which complements Aircraft’s current distribution agreements in 35 other territories globally, will expand the number of specialized sales and marketing professionals promoting the McGRATH laryngoscopes to over 500 across the globe.
A laryngoscope is a medical device used by physicians to allow visual examination of the interior of the pharynx and larynx of a patient. The device is used to perform a procedure known as intubation, in which a flexible plastic tube is placed into the trachea (windpipe) to deliver oxygen and certain drugs. McGRATH MAC is the first low-cost video laryngoscope designed for the intubation of both routine and more difficult airways.
Roughly 17 million intubations are performed annually using a laryngoscope in the U.S. Most of these are performed using Covidien’s Mallinckrodt endotracheal tubes. The U.S. is the largest market for intubation procedures representing roughly a third of the procedures performed globally a year. The application of video laryngoscope is expected to continue to grow driven by the increased awareness of its benefits and continued adoption of the technology by anesthetists and critical-care providers.
Covidien is a leading global health care products company that develops and markets medical solutions for better patient outcomes. It has a rich history of developing and manufacturing high-quality products in a cost-effective manner. The company boasts of a well diversified product and technology portfolio. Covidien competes with Johnson & Johnson (JNJ), Becton Dickinson (BDX) and C.R. Bard (BCR), among others.
Covidien is well placed to achieve its long-term revenue and earnings growth targets based on its attractive fundamentals, effective execution, new product cycle, synergies of acquisitions and expansion into emerging markets.
However, the company is exposed to intense competition, reimbursement uncertainty and sustained pricing and procedure volume pressure. We are currently Neutral on the stock, backed by a short-term Zacks #3 Rank (Hold).
