CEO Roy Jakobs stated patient safety is priority, remediation almost complete.
Dutch medical devices giant Philips reached a $1.1 billion settlement in the US over personal injury lawsuits related to recalled sleep apnea devices.
Philips reported losses of €463 million in 2023 and €824 million in Q1 2024 on sales of €4.1 billion.
Recall involved millions of devices made by subsidiary Philips Respironics due to potential cancer risks.
Settlement payments expected in 2025, funded through cash flow generation and an agreement with insurers for $540 million.
Philips, a Dutch medical devices giant, announced on April 29, 2024, that it had reached a $1.1 billion settlement in the United States to resolve personal injury lawsuits related to its recalled sleep apnea devices. The recall involved millions of devices made by subsidiary Philips Respironics due to concerns over potential cancer risks.
The settlement is a significant milestone for Philips, which has been grappling with the consequences of the recall since 2021. The company's CEO, Roy Jakobs, stated that patient safety and quality is their highest priority and that remediation of sleep therapy devices for patients is almost complete.
The settlement payments are expected to take place in 2025 and will be funded through cash flow generation. Philips also booked a provision of €982 million ($1.1 billion) to cover the settlement and reached an agreement with insurers to pay €540 million for Respironics recall-related claims.
Philips reported losses of €463 million ($501 million) over the full year in 2023 and a loss of €824 million in the first quarter of 2024 on sales totaling €4.1 billion. The company still faces some cases in Europe over the recall, but with this latest settlement, Philips is able to put most of the litigation behind them.
Philips shares soared to a more than two-year high following the announcement, with stocks surging by 46% in Amsterdam and adding nearly €9 billion ($10.2 billion) to the company's market value.
Philips agreed to a $1.1 billion settlement in the U.S. for personal injury cases linked to the recall of some sleep apnea devices.
The recall involved millions of devices that were recalled in 2021 due to concerns that components carried potential cancer risks.
Philips made a 982 million euro ($1.1 billion) provision for the payout of personal injury and medical monitoring claims, ending the uncertainty over the litigation for the company.
The settlement is a ‘capped amount’ and does not admit any fault or liability on Philips’ part nor that any injuries were caused by its Respironics devices.
Philips CEO Roy Jakobs stated that patient safety and quality is the highest priority, and remediation of sleep therapy devices for patients is almost complete.
Philips reached a $1.1 billion deal to settle lawsuits over faulty sleep machines in the US.
The settlement addresses claims filed in US courts and other potential cases.
Philips battled a series of crises over its DreamStation machines for sleep apnea since 2021, resulting in recalls of devices made by subsidiary Philips Respironics.
Patient safety and quality is Philips’ highest priority, and it has taken steps to resolve consequences of the Respironics recall.
The remediation of sleep therapy devices for patients is almost complete and use of these devices is not expected to result in appreciable harm to health.
Philips reported losses of 463 million euros over the full year in 2023 and a loss of 824 million euros in the first quarter of 2024 on sales totaling 4.1 billion euros.
The settlement payments are expected to take place in 2025 and will be funded through cash flow generation.
Philips booked a provision of 982 million euros to cover the settlement and also concluded an agreement with insurers to pay Philips 540 million euros for Respironics recall-related claims.
Three biggest litigation cases have been put behind Philips.
Philips reported first-quarter results in line with 2024 performance improvement plan
Group sales amounted to EUR 4.1 billion, with comparable sales growth of 2.4%
An agreement worth EUR 540 million was reached with insurers for Respironics recall-related product liability claims
Accuracy
Income from operations was EUR -824 million, including a provision of EUR 982 million for Respironics litigation settlement
CEO Roy Jakobs expressed confidence in the performance improvement plan for 2024 despite challenges from Respironics recall and litigation
Deception
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None Found At Time Of
Publication
Fallacies
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No formal fallacies found. There are some inflammatory rhetoric and appeals to authority. The author makes claims about the company's performance without providing evidence, such as 'We started the year in line with our plan' and 'strong margin improvement'. The CEO is quoted as making claims about patient safety and quality, but these are not supported by data or statistics. There is also an appeal to authority when mentioning that 'the remediation of the sleep therapy devices for patients is almost complete', implying that the company's own assessment should be trusted.
. . . order intake growth outside China turning positive and strong margin improvement.
We started the year in line with our plan, with order intake growth outside China turning positive and strong margin improvement. Supported by key innovation launches and strong focus on our execution priorities, we remain confident in our performance improvement plan for 2024.
Patient safety and quality is our highest priority, and we have taken important steps in further resolving the consequences of the Respironics recall.
Royal Philips NV shares soared by a record 47% in Amsterdam following a lower-than-expected settlement on US claims linked to faulty sleep apnea devices.
The settlement added nearly $9 billion to the medical equipment maker’s market value in a single day.
