Royal Philips NV shares continued their decline after news reports claimed the Dutch company was slow to act on complaints about its machines designed to treat sleep apnea.
(Bloomberg) — Royal Philips NV shares continued their decline after news reports claimed the Dutch company was slow to act on complaints about its machines designed to treat sleep apnea.
Philips Respironics first received complaints about its CPAP machines and ventilators in 2010 and “withheld” the majority of the warnings from the US Food and Drug administration until 2021, according to a report from ProPublica and the Pittsburgh Post-Gazette published on Wednesday.
Philips said the article, and a similar report from Dutch daily NRC Dagblad, does not present new facts and the company does not agree with the characterizations made in the articles.
The shares dropped as much as 2.9% on Thursday after closing at €19.33 on Wednesday. Philips is down more than 50% since it started recalling its faulty sleep therapy devices in June 2021.
Investors have long wondered what Philips knew before the recall, but there isn’t a lot of new information in the latest reports, Oddo analyst Wim Gille said. Court filings had previously shown that Philips knew about potential problems at least as far back as 2018.
Philips is a defendant in several class-action lawsuits and individual personal injury claims in the US as consumers claim its machines use foam that can degrade and be ingested, possibly presenting a cancer risk. this month, it agreed to pay at least $479 million to resolve certain litigation tied to the recall.
The company is also being investigated by the US Department of Justice and remains in ongoing discussions with the FDA regarding a proposed consent decree.
“Philips regrets any distress and concern for patients, their families and care providers in this matter, and deeply apologizes for this,” the company said in a statement responding to the new reports. “Philips acted to protect patient safety by initiating and executing a voluntary recall notification/field safety notice of significant scale.”
–With assistance from Sarah Jacob.
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