Royal Philips NV said new tests on its recalled sleep apnea products showed the vast majority of the devices are unlikely to cause considerable health damage to patients. The shares jumped.
Exposure to degraded foam in 95% of the breathing apparatuses is “unlikely to result in an appreciable harm to health in patients,” the Netherlands-based health company said Tuesday, citing its test results. Philips initiated its first recall of potentially faulty sleep apnea products in June 2021, with the US Food & Drug Administration also labeling those as a Class 1 issue, the most serious type.
Philips shares jumped as much as 6% in Amsterdam to the highest level since August after the statement.
The new results are “very reassuring and very good news for the patients in our view as for our testing,” Chief Executive Officer Roy Jakobs said in a phone interview. “To our current best knowledge, this does not cause harm.”
The company has set aside around €1 billion ($1.1 billion) for the recall of around 5.5 million devices globally and booked additional provisions of €575 million as part of a planned settlement in the US to compensate patients.
Philips is a defendant in several class-action lawsuits and individual personal injury claims in the US. Consumers have accused the company of violating the US Federal Food, Drug and Cosmetic Act, which requires that medical devices be safe and effective. They claim the breathing machines were defectively designed by using foam that could degrade if exposed to moisture.
Today’s results may form part of Philips’s defense in looming court cases over health claims. The FDA is still considering the data provided by the company and the health authority may reach different conclusions.
“If people claim otherwise, we will use these test results and point to these test results, that in our view and according to our testing, that we do not see any harm done to help with these patients,” Jakobs said. “So that’s kind of how this will be important also for any of those cases if and when they happen.”
In sleep apnea, breathing stops and starts, which can cause fatigue and longer-term health problems. Philips products designed to improve sleep patterns include its DreamStation CPAP machines and Trilogy ventilators.
(Updates with shares in third paragraph, CEO interview beginning in fourth.)
