By Ken Ibenne
Shares of Philips witnessed a remarkable surge on Monday, spurred by the resolution of a significant legal dispute in the United States involving its respiratory devices.
The Dutch medical technology giant settled a lawsuit related to the recall of several sleep apnea treatment products, which resulted in a recall of millions of units in 2021 due to potential cancer-causing elements. At 9:00 a.m. London time, Philips shares soared by 33%, reflecting investor optimism following the $1.1 billion settlement.
The company has earmarked 982 million euros ($1.1 billion) to cover medical monitoring and personal injury claims arising from the litigation. While asserting its denial of any liability, Philips emphasized its commitment to patient safety and quality.
CEO Roy Jakobs emphasized, “Patient safety and quality are our top priorities, and we have taken significant steps to address the repercussions of the Respironics recall.”
Jakobs further reassured patients, stating, “The devices used for sleep therapy are nearing completion of repairs, and preliminary test results suggest no significant health risks associated with their use. We sincerely apologize for any concerns patients may have experienced.”
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Despite the settlement, Philips reported a first-quarter loss of 998 million euros ($1.07 billion) on Monday. However, adjusted earnings for the quarter exceeded analyst expectations, reaching 388 million euros. Quarterly sales for the first quarter of 2023 totaled 4.14 billion euros, slightly down from the previous year’s figure of 4.17 billion euros, according to Reuters.
