Shares of medical giant Philips surged Monday after the company announced that it paid over a billion dollars to settle personal injury claims tied to its recalled sleep apnea devices.
Philips Respironics, a subsidiary of Philips, recalled about 15 million sleep therapy devices in 2021 over concerns that a foam component could disintegrate and be inhaled by the user, possibly causing health issues, including toxic and carcinogenic effects.
Philips share price hit a 52-week-high on Monday at $29.44.
"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 CEO Roy Jakobs said in a statement Monday.
PHILIPS RECALLS SLEEP APNEA MACHINES, VENTILATORS OVER POSSIBLE CANCER RISK
Jakobs added that "the remediation of the sleep therapy devices for patients is almost complete, and the test results to date show the use of these devices is not expected to result in appreciable harm to health."
While Philips Respironics agreed to pay $1.1 billion for the U.S. cases stemming from the recall, the company said it does not "admit any fault or liability, or that any injuries were caused by Respironics’ devices."
Philips Respironics ventilators, continuous positive airway pressure (CPAP) and bilevel positive airway pressure (BiPAP) machines, which are designed to deliver air pressure when patients breathe in and out, were recalled in June 2021. The machines work to treat sleep-related breathing disorders, including sleep apnea, according to Philips.
At the time, the Food and Drug Administration (FDA) alerted patients using the machines that the polyester-based polyurethane PE-PUR foam breakdown "could potentially result in serious injury and may require medical intervention to prevent permanent injury."
PHILIPS RECALLS MORE RESPIRATORY MACHINES DUE TO POSSIBLE PLASTIC CONTAMINATION
The foam used in these devices to reduce sound and vibration can break down, which means the black pieces of foam, or certain chemicals that are not visible, could be breathed in or swallowed by the person using the device, the FDA explained.
In January, the company agreed to the terms of a proposed consent decree, which is a performance improvement plan that is legally binding with Department of Justice and FDA.
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Chief Patient Safety and Quality Officer Steve C de Baca said in January that "Philips Respironics has been working with the FDA, and is already making significant changes in its organization, quality management systems and operations."
This includes strengthening the quality management processes.
"We are fully committed to meeting the terms of the consent decree and continuing to serve the millions of patients who rely on our products and services every day," he continued.
