The Zacks Analyst Blog Highlights: Covidien, Johnson & Johnson, Becton Dickinson, C.R. Bard and Aetna

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Sep 04, 2012, 09:30 ET

CHICAGO, Sept. 4, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Covidien plc. (NYSE:COV), Johnson & Johnson (NYSE:JNJ), Becton Dickinson (NYSE:BDX), C.R. Bard (NYSE:BCR) and Aetna Inc. (NYSE:AET).

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Here are highlights from Friday's Analyst Blog:

FDA Approval for Covidien's iDrive

Leading health care products company, Covidien plc. (NYSE:COV) recently received 510(k) approval from the U.S. Food and Drug Association (FDA) for its iDrive Ultra powered stapling system. It is a first of its kind fully powered, battery-operated, reusable endoscopic stapler used during laparoscopic and open surgeries. The system will be available in the U.S. early in the fourth quarter of 2012.

The iDrive Ultra system is the latest offering from Covidien's Endomechanical Instruments under the Medical Devices business. Stapling products are already contributing to the growth of this business segment. The opportunity presented by this revolutionary powered stapling device with unique in-built features should be accretive to the company's top-line.

The iDrive Ultra system is the first stapler compatible with Covidien's entire range of Endo GIA reloads with Tri-Staple technology. The Tri-Staple technology integrated into the iDrive Ultra system enables better perfusion into the staple line, exerts lower pressure on tissue during compression and clamping and manages tissue variability effectively.

In addition, the iDrive Ultra system has been specifically designed for multi-patient use and is also environmentally friendly. With advanced features and extensive articulations, the system can be easily maneuvered without the application of manual firing force. All these special features will improve surgical precision and efficacy, resulting in better patient safety.

Covidien is a leading global health care products company with a history of developing high-quality products in a cost-effective manner. It competes with Johnson & Johnson (NYSE:JNJ), Becton Dickinson (NYSE:BDX) and C.R. Bard (NYSE:BCR), among others. The company plans to bolster sales with the help of strategic acquisitions.

Covidien remains committed to rolling out new products and technologies, focusing on emerging markets, and boosting market share in core segments through investments in its sales and marketing infrastructure.

However, sustained pricing/procedure volume pressure, fluctuating foreign exchange rates, a sluggish U.S. and European economy represent major headwinds. We currently have a Neutral recommendation on Covidien, which carries a short-term Zacks #4 Rank (Sell).

Aetna Renews Agreement, Creates PCMH

Health insurer Aetna Inc. (NYSE:AET) announced that it has renewed the agreement with Novant Health Care. According to the new agreement, the latter will continue to provide its healthcare related service to Aetna's members.

A value based agreement has also been created for Novant's certified Patient Centered Medical Homes ("PCMH"). Novant's PCMH-certified practices will receive a reimbursement for providing a coordinated care approach for their attributed members. Extra compensation will be paid if the practices meet certain set targets relating to quality and cost efficiency.

The PCMH is an approach to provide person-centered care in primary care settings. This model organizes care around the relationship between the patient and the personal clinician. In a medical home, a patient can expect attention from the physician on holidays, evenings and weekends without going to the emergency room.

Also, the primary care clinician helps patients select a specialist and informs both the providers and the patients about test or examination results, reviews treatment options, thereby helping them to resolve conflicting advices received from multiple providers.

Thus the PCMH is a model that can help controlling increasing healthcare costs, poor or inconsistent quality and inaccessibility to timely care.

Aetna provides health benefits to approximately 377,000 members in North and South Carolina. These members have the right to use the network, which includes 177 hospitals and 22,030 contracted primary care and specialist physicians.

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