Philips Respironics announced its first-quarter results, in which it provides an update on field action for specific sleep therapy and ventilator devices involved in the company’s ongoing recall.
According to Philips, over 95% of the new replacement devices and repair kits required for the remediation of the registered devices have been produced. The majority of the produced sleep therapy devices have been sent to patients and home care providers, and the remaining 5% of the registered devices are primarily ventilators, “for which Philips Respironics is fully focused on working towards a solution,” says the company in a release.
As previously disclosed, Philips is a defendant in several class-action lawsuits and individual personal injury claims. In the US, an economic loss class action, a medical monitoring class action, and personal injury claims have been filed. This quarter, Philips recorded a EUR $575 million provision in connection with the anticipated resolution of the economic loss class action.
“Resolving the Philips Respironics recall for patients remains our highest priority,” says Royal Philips CEO Roy Jakobs in a release. “In the first quarter, we have recorded a provision in anticipation of a resolution of the economic loss class action in the US. This is an important step in addressing the litigation related to the recall.”
Additionally, Philips is subject to an investigation by the US Department of Justice and remains in ongoing discussions with the FDA regarding a proposed consent decree. Given the uncertain nature of the relevant events, and of their potential financial and operational impact and associated obligations, if any, the company says it has not made any provisions in the accounts for these matters.
Philips’ Connected Care businesses’ comparable sales increased 3% in the quarter, driven by double-digit growth in Hospital Patient Monitoring, largely offset by a decline in Sleep and Respiratory Care.
In the second quarter, Philips expects to report on the volatile organic compound testing of ozone-induced foam degradation in the first-generation DreamStation devices and on the complete set of testing results for the SystemOne and DreamStation Go sleep therapy devices.
“Looking ahead, based on our solid performance in the quarter, our order book, and the ongoing actions to further improve execution, we are confident in our plan for the year 2023, acknowledging that uncertainties remain,” says Jakobs in the release.