As a result, the FDA has instructed Philips to carry out further risk testing. In June 2021, millions of breathing aids and ventilators used for sleep apnea had been recalled due to a risk of degradation and toxicity of a foam component that could become carcinogenic. The news sent Philips shares into a downward spiral that has continued ever since. "We do not believe that the tests and analyses Philips has conducted to date are sufficient to fully assess the risks posed to users by the recalled devices," wrote the US regulator. The group took note and announced that it would be discussing the modalities of new assessments with the agency.
A risk of recall
Analysts believe that Philips' poor crisis management could lead to more radical measures. "The demand for additional tests, the continuing dissatisfaction with Philips' handling of the recall and the removal of the device from the shortage list make it all the more likely that Respironics will be banned from sale in the US", fears Bernstein.
"We see this as more of a potential problem for future lawsuits", says Jefferies, who was expecting a relapse in the share price, which has rebounded by 40% since the affair seemed more or less under control. "We believe that today's update will force investors to rethink the risk of a possible judgment", wrote UBS this morning.