Dutch medical device maker Philips said Monday it had reached a $1.1 billion settlement in the United States to settle the lawsuits. faulty sleeping machines in a case that has shaken the company.
Since 2021, Philips has been fighting a series of crises with its DreamStation machines for sleep apnea, a disorder in which breathing stops and starts during sleep.
Earlier this year, the company said it would stop new sales of the machines in the United States following a series of recalls of devices manufactured by subsidiary Philips Respironics.
Philips said in a statement Monday that it had reached an agreement with the plaintiffs “to settle the personal injury litigation and the medical follow-up class action to end the uncertainty associated with litigation in the US.”
It added that it did not “admit any fault or liability, or that the injuries were caused by the Respironics devices.”
The settlement addresses claims filed in U.S. courts and other potential cases, he said.
“Related payments are expected in 2025 and will be funded from Philips' cash flow generation,” the statement said, adding that the company had set aside a provision of $1.05 billion in the first quarter to cover the settlement.
Philips said it also reached an agreement with insurers to pay Philips $578 million to cover claims related to the Respironics recall.
Philips posted a full-year loss of $501 million in 2023.
The company has had to cut thousands of jobs.
Reuters reports that the settlement amount was less than analysts had expected and that Philips shares soared when the deal was announced.
“This deal is significantly below expectations of $2-4 billion and at worst $10 billion,” Reuters quoted Barclays analysts as saying. “It arrives much earlier than expected and removes an overhang that many have worried would persist for years.”
