Dutch Health Tech Firm Philips Stops US Sales Of Respiratory Devices Under Finalized Consent Decree Over Device Recall
Portfolio Pulse from Vandana Singh
Koninklijke Philips NV (NYSE:PHG) has agreed to a settlement with the FDA, which includes a consent decree halting the sale of new CPAP and BiPAP sleep therapy devices and other respiratory care devices in the U.S. until compliance with regulatory requirements is demonstrated. Philips Respironics will continue servicing existing devices and providing accessories and parts. The company recorded a €363 million provision for Q4 2023 for remediation and related costs and anticipates additional costs in 2024. Despite the decree, Philips maintains its 2023-2025 financial forecasts. PHG shares dropped 7.29% in premarket trading.
January 29, 2024 | 12:48 pm
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Philips has stopped sales of new respiratory devices in the U.S. due to an FDA consent decree but will continue servicing existing devices. The company took a significant provision in Q4 2023 and expects additional costs in 2024, but maintains its financial outlook.
The consent decree directly impacts Philips' ability to sell new respiratory devices in the U.S., a significant market. The provision and anticipated costs suggest a negative financial impact, which is reflected in the premarket stock price drop. However, the company's reiteration of its financial outlook may mitigate some investor concerns.
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