Philips Surges 37% After Settlement on US Sleep Apnea Claims

Bloomberg04-29

(Bloomberg) -- Royal Philips NV shares soared by a record after a lower-than-expected settlement on US claims linked to faulty sleep apnea devices, stoking hopes the manufacturer has moved past ...

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Musk Makes Surprise China Visit in Search of Tesla Revenue Boost. Elliott Built‘Large’ Stake in Buffett-Favored Sumitomo, Source Says. Yen Watchers Ask When Japan Will Step In as Slide Accelerates. Yen Rebounds Strongly After First Slide Past 160 Since 1990. The stock surged 37% in Amsterdam following the statement to value the medical equipment maker at just over 27 billion . Philips’ market valuation still remains 40% below than before the start of the issues, which has seen the company swap out its chief executive officer and cut 10,000 positions to save costs.As part of the issues, Philips was also ordered to suspend sales of the devices in the US after an agreement with the US Food and ","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"PHG":"飞利浦","BK4588":"碎股","BK4082":"医疗保健设备","BK4585":"ETF&股票定投概念"},"translate_title":"美国睡眠呼吸暂停索赔和解后，飞利浦股价飙升37%","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PHG":0.9},"content_text":"(Bloomberg) -- Royal Philips NV shares soared by a record after a lower-than-expected settlement on US claims linked to faulty sleep apnea devices, stoking hopes the manufacturer has moved past concerns that have dogged it for the past three years. \nMost Read from Bloomberg\n\nMusk Leaves China With Tesla Driving Software Hurdles Cleared\nMusk Makes Surprise China Visit in Search of Tesla Revenue Boost\nElliott Built ‘Large’ Stake in Buffett-Favored Sumitomo, Source Says\nYen Watchers Ask When Japan Will Step In as Slide Accelerates\nYen Rebounds Strongly After First Slide Past 160 Since 1990\n\nThe stock surged 37% in Amsterdam following the statement to value the medical equipment maker at just over €27 billion ($28.9 billion). Philips’ market valuation still remains 40% below than before the start of the issues, which has seen the company swap out its chief executive officer and cut 10,000 positions to save costs. \nThe Dutch company set aside €982 million to cover the expected expense for a medical monitoring class-action lawsuit and individual personal injury claims in the US, much less than analyst predictions of as much as $4.5 billion. The deal is expected to draw a line under the US claims over the faulty sleep therapy devices that has weighed on the stock since June 2021. \n“This is much milder than feared and shall mark the end of litigation uncertainty,” Jefferies analysts said.\nThe manufacturer started recalling the sleep therapy devices over concerns of disintegrating noise-cancelling foam inside the machines that patients inhaled. The US Food and Drug Administration has labeled the fault a Class 1 issue, the most serious type.\nAnalysts had expected a larger cost for the latest settlements. Bloomberg Intelligence analyst Holly Froum had put the likely payments between $2 billion and $4.5 billion to settle personal-injury claims tied to the devices. The total costs for the sleep apnea recall are now around $5 billion, according to Bloomberg calculations.\nPhilips claims the use of the faulty devices doesn’t result in “any appreciable harm” to patients. Still, the FDA has said it doesn’t believe that the analysis is adequate to fully evaluate the risks posed to users and asked for additional testing from Philips. The company is still conducting the toxicology tests related to the device.\nThe devices are designed to force extra air down the throat to treat obstructive apnea — an ailment that interferes with proper sleep and can cause fatal heart problems. \nUsers have alleged that inhaling the foam after it disintegrates poses a cancer risk. FDA officials said in January that they received 561 reports of deaths possibly linked to malfunctioning machines.\nAs part of the issues, Philips was also ordered to suspend sales of the devices in the US after an agreement with the US Food and Drug Administration in January. In addition, the company is being investigated by the US Department of Justice and has not yet made any financial provisions for that matter. \nThe settlement “covers all the claims in the US, even the ones that would come in still over the next six months,” Philips CEO Roy Jakobs says in an interview with Bloomberg Television. “That doesn’t mean that everything is resolved,” Jakobs said, referring to the DOJ investigation which he says is “one of the last remaining pieces of the whole suite of actions” in the sleep apnea recall.\nJakobs said Philips cannot provision for the DOJ probe as that investigation is ongoing and cannot “speculate” on the outcome.\nPrior to Monday’s news, the company has lost more than half of its market value since the initiation of the sleep apnea recall.\nThe surprise news might be prompting a number of short sellers to cover their negative bets on Philips stock on Monday. Shares out on loan, an indication of short interest, represented about 4.9% of the company’s free float as of April 25, according to data from S&P Global Market Intelligence.\nThe company has stepped up patient safety checks across all of its products after the sleep apnea recall to preemptively address other possible issues. This has resulted in additional recalls of other products including some MRI devices and ventilators.\nPhilips also took a hit from a sweeping anti-graft campaign across China’s health-care sector last summer, in line with Beijing’s increasing focus on local and state-oriented procurement in medical technologies. Authorities across the country included strict domestic product requirements for many categories of device.\n“The market in China continues to be impacted by the industry-wide anti-corruption measures initiated by the government and by subdued consumer demand,” Philips said in the statement.\nDuring the first quarter, comparable order intake fell 3.8% in the first quarter driven by declines in China. It reported adjusted earnings before interest, taxes and amortization of €388 million, in line with the average estimate of €383 million in a Bloomberg survey of analysts.\nRead More: Philips Warns of Faulty Ventilators Amid Mounting Safety Issues\n--With assistance from Tom Mackenzie, Sarah Jacob and Lisa Pham.\n(Updates with details throughout)\nMost Read from Bloomberg Businessweek\n\nModi Is $20 Trillion Short on His Grand Plan for India’s Economy\nBiden Strategy to Tame Gas Prices Is in Peril as Iran Sanctions Pressure Mounts\nTesla Strike Has US Unions Taking Notes\nCaught Between the US and China, a Powerful AI Upstart Chooses Sides\nUS White-Collar Job Growth Stalls, Even in Pandemic Boomtowns\n\n©2024 Bloomberg L.P.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2431720882"}