By Dhirendra Tripathi
Investing.com – ResMed (NYSE:RMD) shares rose more than 4% Monday following its rival Philips (NYSE:PHG) recalling certain breathing devices and ventilators on concerns they could harm the patients.
Needham & Company analyst Michael Matson (NYSE:MATX) said Philips’ troubles could benefit ResMed. Needham has a buy rating on the stock with a $229 target. The stock touched a high of $229.17 in the session so far today.
Philips shares fell over 4% today following its decision to voluntarily recall Bi-Level Positive Airway Pressure, Continuous Positive Airway Pressure and mechanical ventilator devices.
A certain kind of foam, polyester-based polyurethane, is used to muffle the noise generated during use of these devices.
Philips said the PE-PUR foam may degrade into particles which may enter the device’s air pathway and be ingested or inhaled by the user, and the foam may off-gas certain chemicals.
The foam degradation may be exacerbated by use of unapproved cleaning methods. High heat and high humidity environments may also contribute to foam degradation, the company said in a note.
Philips will replace the current sound abatement foam with a new material and has already begun the preparations, which include obtaining the relevant regulatory clearances.
The company has advised patients to consult their physician before taking any action and weigh between the risks of continuing the therapy and those identified in the recall notification.