Philips Provides Update on PAP Recall

The sleep and respiratory equipment maker reported it has products 3 million replacement devices and repair kits. Aims to complete roughly 90 percent of shipments in 2022.

In an update to investors on its Second Quarter performance, Philips noted that Philips Respironics “continued to make solid progress” with its repair and replacement program for recalled CPAP and BiPAP devices.

Specifically, Philips noted that Philips Respironics had produced 3 million replacement devices and repair kits and that it expects to increase capacity and complete approximately 90 percent of the production and shipments to customers in 2022.

Test results to date for the first-generation DreamStation devices, which represent the majority of the affected devices, showed a very low prevalence of visible foam degradation, according to Philips. Tests also showed that new and used first-generation DreamStation devices passed volatile organic compound and respirable particulate emission testing.

In the update, Philips also reported that, following the FDA’s inspection of certain of Philips Respironics’ U.S. facilities in 2021, the Department of Justice, acting on behalf of the FDA, recently launched discussions with Philips regarding the terms of a proposed consent decree to resolve the identified issues.

“Across our businesses, we have stepped up our actions on productivity, pricing, and strengthening supply chain resilience to mitigate the ongoing headwinds and associated risks,” said Frans van Houten, CEO of Royal Philips. “The positive impact of these actions, together with the strength of our order book and improving component supplies, give me confidence that we will resume growth from the third quarter onwards, resulting in 6-9 percent comparable sales growth and improved profitability in the second half of the year. For the full-year 2022, we expect to deliver 1-3 percent comparable sales growth and around 10 percent Adjusted EBITA margin.”

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