(BFM Bourse) – The Dutch manufacturer of medical devices jumps on the Amsterdam Stock Exchange after declaring that it is paying $1.1 billion to settle a dispute in the case of defective respirators in the United States.
Philips shares rose on the stock market on Monday after the group announced that it would pay $1.1 billion to settle disputes in the United States after a recall of defective respiratory devices for people suffering from sleep problems.
The Dutch medical device maker announced in a statement that it had reached an agreement with plaintiffs “to resolve the personal injury and medical oversight class action litigation to end the uncertainty associated with state litigation.” -United”.
The announcement satisfied investors. On the Amsterdam Stock Exchange, Philips shares rose another 34% to 26.46 euros around 10:30 a.m., in a rising market.
Philips does not admit “any fault or responsibility, nor that any injuries were caused by Respironics devices”, stressed the group, while “regretting the concern that patients may have felt”.
An amount lower than expectations
The amount is significantly lower than expected by financial analysts, who expected settling the claims of around 60,000 American patients to cost several billion euros, noted the Dutch financial daily Het Financieele Dagblad.
“1.1 billion is a significant amount no matter how you put it,” Philips CEO Roy Jakobs said on a media call.
Philips announced in 2021 the recall of these DreamStation machines against sleep apnea, a case which led to the elimination of thousands of jobs.
Users risked inhaling or swallowing pieces of toxic sound-deadening foam that could cause irritation and headaches. The group then also mentioned a “potential” risk of long-term cancer.
Payments expected in 2025
Philips had in September reached an agreement with certain American subsidiaries to settle all claims for economic losses, which did not relate to those concerning bodily injury or medical follow-up.
Philips announced in January a net loss of 463 million euros in 2023 and the cessation of sales in the United States of respiratory devices for sleep apnea.
The $1.1 billion settlement announced Monday covers “claims filed in U.S. courts and potential claims submitted to the Census Registry,” the group said. This is “significant progress” in the case, according to Roy Jakobs.
Payments are expected in 2025, Philips said. A provision of 982 million euros was recorded in the first quarter of 2024, it said, resulting in a net loss of 824 million euros. The group achieved a turnover of 4.1 billion euros in the first quarter.
“This does not mean that everything is resolved,” he added while prosecutions and investigations are still underway elsewhere. But “the three biggest disputes we had are behind us (…) and we can move forward, it’s really important.”
“Overall, we consider the long tail of remaining legal risks to be very manageable,” says a note from analysts at Franco-German bank Oddo BHF.
(With AFP)
SS – ©2024 BFM Bourse
Are you following this action?
Receive all the information on PHILIPS KON in real time: