Hernia: Covidien's biologic mesh product hits a wall

March 8, 2013 by Brian Johnson

Covidien CFO Charles Dockendorff says there's not much room for growth in biologic tissue mesh for hernia repair, a product the company acquired in 2008.

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Covidien's (NYSE:COV) biologic hernia mesh product has hit a "brick wall," according to CFO Charles Dockendorff, but does that mean the company is looking to move on from the product it dropped more than $80 million to acquire?

Dockendorff, responding to a question from CitiGroup analyst Matthew Dodds at the investment bank's recent investor's conference, sounded downbeat about the fate of the product compared to the company's synthetic mesh.

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"Hernia has been very, very interesting because we continue to have a lot of success in the synthetic mesh market. I don't see that as changing," he said. "In fact, we are launching small interactive new products there that you're going to be seeing throughout the year. The other 2 components of hernia, though, have been really interesting. So biological mesh has just hit a brick wall for a lot of different reasons," he said.

Dockendorff said the company has experienced push back on the high price of its Permacol biologic mesh, a porcine dermal collagen implant for hernia and abdominal wall repair, which the company acquired in its 2008 buyout of Andover, Mass.-based Tissue Science Labs. The company paid some $80 million for the company.

"While there was a case to be made when people were using them in highly infected tissue patients, without that claim and without that marketing behind it, that market has just collapsed across-the-board," he said.