Covidien Recalls Duet TRS (BCR) (BDX) (COV) (JNJ)

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Health care products major Covidien plc (COV) has initiated a voluntary recall of all production lots of its Duet TRS universal straight and articulating single-use loading units following reports of patient deaths associated with the use of this product line in thoracic surgery.

The Duet TRS, introduced in 2009, is a single-use tissue reinforcement system used with the company’s Endo GIA laparoscopic stapler. Covidien has already sold more than 500,000 units of Duet TRS globally and believes that roughly a third of the procedures performed using it are for thoracic indications.

The Ireland-based company has received reports of 13 cases of serious injuries and 3 deaths following the use of Duet TRS in the thoracic cavity. Consequently, Covidien concluded that the product is associated with the risk of causing injury to adjacent anatomical structures within the thorax, resulting in life-threatening complications following surgery.

Covidien has notified its customers about of the recall in a letter dated January 12, 2012. The company is currently working with the U.S. Food and Drug Administration (“FDA”) and other regulatory authorities globally to contraindicate the use of Duet TRS in thoracic surgeries in both adult and pediatric populations.

Moreover, Covidien has placed a hold on its global Duet TRS inventory to enable the relabeling with modified instructions for use. The company is also informing its customers about alternative tissue reinforcement products that may be used along with its endoscopic staplers for thoracic surgery.

Covidien is a leading global health care products company with a rich history of developing high-quality products in a cost-effective manner. It competes with Johnson & Johnson (JNJ), Becton Dickinson (BDX) and C.R. Bard (BCR), among others.

Covidien remains committed to rolling out new products and technologies, focusing on emerging markets, and boosting market share in core segments through investments in sales and marketing infrastructure. However, it faces intense competition, reimbursement uncertainty and sustained pricing and procedure volume pressure. We are currently Neutral on the stock, supported by a short-term Zacks #3 Rank (Hold).

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