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| Covidien's EverFlex peripheral stent--Courtesy of Covidien |
Covidien ($COV) CEO José Almeida said during the company's fiscal Q4 earnings call that the company's looming megamerger with Medtronic ($MDT) will give the combined entity "a voice at the table" due to its volume in some of the most purchased devices in the world.
The next steps toward closing the transaction by the target of early 2015 are the filing of an S-4 form with the Securities and Exchange Commission, followed by overcoming antitrust hurdles in various geographies and a successful shareholder vote, company officials said.
But they wouldn't talk too much about the transaction, instead preferring to focus on Covidien's strong quarter, in which earnings rose by 39% year-over-year to $517 million on net sales up 7% to $2.73 billion. They also focused on the pipeline, for the quarter's R&D spending was the company's highest ever, at 5.4% of sales.
In fact, the company today released additional clinical trial data and announced an expanded indication for its EverFlex peripheral stent at the Vascular Interventional Advances conference in Las Vegas. The device is now cleared for use by the FDA in the iliac arteries of the pelvis.
Covidien also aims to expand the indication of its superDimension navigation system so that it can be used a as a treatment for early-stage lung cancer. Chief medical officer Michael Tarnoff previously told FierceMedicalDevices that Covidien hopes to enter the upgraded product into the FDA-CMS parallel review pilot so that it can receive Medicare reimbursement in a timely manner.
Medtronic officials have expressed excitement about moving into the lung cancer arena following the merger.
Lastly, Almeida touted Covidien's robotics research, saying, "It is a program we have not spoken a lot about. It's based in 3 different places in the world where the expertise lies. We have a relentless effort to make sure that once you come up with something along those lines, it will be at a cost that is effective to the hospital," according to the Seeking Alpha transcript. He added, "We're very, very confident we're going to come up with something. I'm not going to commit on the time, but (it will be) something that will be different and hopefully and possibly better than what's out there today."
Turning to the division-by-division results, the surgical solutions unit is the company's biggest and fastest growing. Quarterly sales rose 11% to $1.33 billion.
The vascular therapies unit had sales of $426 million up 3%, led by a 7% increase in neurovascular devices. The unit will lose a part of its pipeline follow in the merger with Medtronic, for Covidien recently announced the $30 million sale of its clinical-stage drug-coated balloon for peripheral arterial disease due to federal antitrust concerns.
And the respiratory and patient care unit had sales $974 million, up 3%. Patient Monitoring sales were strong, but growth was weaker among enteral feeding and incontinence products, Almeida said.
Other highlights of the quarter include the launch of the company's medical training and research center in Brazil, the company's first in Latin America, and the closure of the acquisitions of Sapheon and Reverse Medical.
- read the earnings release
- here's the Seeking Alpha transcript
- here's the EverFlex peripheral stent release