Philips recalls some imaging machines on explosion concerns
Royal Philips (PHG) is recalling about 150 MRI machines in the US on concerns of explosion risks caused by a buildup of helium gas. The medical device company says it has inspected about 95% of the recalled machines in the US and plans to complete the rest of the inspections shortly.
Shares of Royal Philips fell about 1%.
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Video Transcript
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SEANA SMITH: Medical equipment maker Philips recalling several models of its medical imaging devices after the FDA issued a stark warning. It's the latest in a list of quality issues flagged by the company. Shares have fallen significantly since those recalls began back in 2021. You can see the share price under pressure, especially over the last couple of years. So the latest on that recall is Anjalee Khemlani. Anj.
ANJALEE KHEMLANI: Yeah, that's right. So we know that we have heard about those respirator machines from Philips, but now an imaging machine is on the recall list. The FDA issuing a class I or type 1, the highest level of concern for a medical device problem. And what happened that spurred this is that one of the devices, the MRI machines, exploded basically while they were decommissioning it. And so that prompted some concerns about what is known as quenching the magnets.
And I will save you the nerdy details, but basically it can be problematic. It involves helium gas. And this is what prompted the recall for about 150 machines. It's an older MRI device that was discontinued in 2014 from Philips, but this is just what prompted it.
Philips has since looked at about 95% of those 150 in the US, as well as 80% of those abroad. No injuries reported, but they just basically wanted to make sure that all the others are functioning correctly. So this wasn't a stopping the product recall. It was, sort of, a field inspection recall.
And so as you can see on your screen, we got that from Philips this morning saying that about 95% of them have been checked and operational, the rest still underway. We spoke to Royal Philips CEO Roy Jakobs earlier. And we did ask about these continuous recalls and the company under pressure there and this is what he had to say about that.
ROY JAKOBS: Yeah, patient safety and quality is paramount. And that's something that also when I stepped into the role, I said this, the number one priority for the company. We have put a world class team on it and we are working through the challenge and actually making significant progress.
We also saw that coming in how the Philips recovery over the full year is shaping up. We have now four quarters of growth. We are actually year to date ahead of the plan. We upped our guidance twice. And we're doing that under the umbrella of looking at health care and how we can provide the best quality care to them, looking at the time that we can give back, but of course, also making sure that in the application, for example, of AI, we do it in a responsible manner.
ANJALEE KHEMLANI: So as you can see, you know, they have been under pressure. The company just coming back from that 2021 recall. And we'll see if this new recall is just a blip or continues to put pressure on that company.
BRAD SMITH: All right, Anjalee, thanks so much for helping break this down. We'll continue to track this one moving forward.
