US FDA flags new problem with Philips machines, shares fall

(Reuters) -Philips shares fell more than 6% on Wednesday after the U.S. Food and Drug Administration said it is alerting patients of a new safety issue with machines made by the group that are used for the treatment of obstructive sleep apnea.

The Amsterdam-based healthcare technology company has been grappling with the fallout of a global recall in June 2021 of millions of respirators used to treat sleep apnea over worries that foam used in the machines could become toxic.

The new issue identified by the FDA involves the heating element in a humidifier used in the "DreamStation 2" sleep therapy device.

Philips said in a statement it had flagged the matter with the FDA itself after a review Philips conducted over the past three months that found 270 complaints over the over the past three years.

"Philips Respironics is in discussions with the (FDA) regarding the reports," it said.

Philips shares were down 4.9% at 18.58 euros by 1223 GMT.

Analysts from ING said in a note that the DreamStation 2 is the successor of the DreamStation 1 machine which had used the problematic foam.

"The DS2 has silicon instead of the degrading foam, and as a result the successor could remain in the field and in many instances was used as a replacement machine," ING said.

A spokesperson for the company said that around a million DreamStation 2 machines are on the market, and they can continue to be used as long as their safety instructions are followed.

The FDA said it had received reports of people facing thermal issues such as fire, smoke, burns, and other signs of overheating while using Philips' DreamStation 2 CPAP machines.

The agency said the reports indicate that the issues may be related to an electrical or a mechanical malfunction of the machines.

(Reporting by Toby Sterling in Amsterdam, Christy Santhosh in Bengaluru, Diana Alvarez in Gdansk; Editing by Shailesh Kuber, Jan Harvey and David Evans)