(C) Reuters. FILE PHOTO: Dutch technology company Philips’ logo is seen at company headquarters in Amsterdam, Netherlands, January 29, 2019. REUTERS/Eva Plevier
By Toby Sterling
AMSTERDAM (Reuters) -Dutch medical equipment company Philips has recalled some breathing devices and ventilators because of a foam part that might degrade and become toxic, potentially causing cancer, it said on Monday.
Foam used to dampen the machines’ sound can degrade and emit small particles that irritate airways, the group said as it announced the recall. Gases released by the degrading foam may also be toxic or carry cancer risks.
Philips Chief Executive Frans van Houten said the company was one of the largest makers of sleep apnea machines and ventilators. Between 3 million and 4 million would be targeted in the recall, he said.
The group took a 250 million euro ($303 million) charge for the issue after announcing an identical provision in its first quarter-earnings report in April, bringing the total cost of the problem to 500 million euros to date.
Shares in the group were down 4.2% to 44.42 euros by 0850 GMT in Amsterdam.
“We’re going to put all our capacity to focus entirely on replacing and repairing these units,” Van Houten said in a call, a process he said would likely take a year.
That “has a consequence that we will not be able to serve new customers, so there’s going to be a shortage in the field”.
Company spokesman Steve Klink said about 80% of the affected devices were machines used to help people with sleep apnea, known as Continuous Positive Airway Pressure (CPAP) machines. Users of those machines were advised to halt usage. Around two-thirds of Philips CPAP machine sales are in the United States.
The other 20% of affected devices were ventilators. Doctors and patients using life-sustaining ventilators should first consider whether the potential danger from the foam outweighs other risks, the company said.
“Philips has received reports of possible patient impact due to foam degradation,” the company said in a statement. “To date, there have been no reports of death as a result of these issues.”
Spokesman Klink said Philips had received some complaints about the devices, representing 0.03% of those sold in 2020.
The company said the matter would cause “revenue headwinds” in the division making the devices but that would be compensated by strength in other businesses.
It left its full-year financial guidance of “low-to-mid-single-digit” comparable sales growth unchanged.
Philips said it was working with health authorities on a safe replacement for the foam, but that it must first clear testing and regulatory hurdles.
In April, Philips said first-quarter core earnings surged 74% to 362 million euros compared with the same period a year earlier, on a 9% rise in comparable sales.
($1 = 0.8263 euros)
Philips recalls ventilators, sleep apnea machines due to health risks
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