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Philips (PHG) Receives FDA Class 1 Recall for BrightView SPECT

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Koninklijke Philips (PHG - Free Report) recently announced that it received an FDA Class 1 recall for BrightView SPECT imaging systems.

In December 2023, Philips informed consumers of a possible problem with BrightView systems, which include BrightView, BrightView X, and BrightView XCT. The detector may descend in certain situations because of a possible component failure (lead screw), because of which there is a chance that the patients might be contacted.

Price Performance

For the past six months, PHG’s shares have gained 0.5% compared with the industry’s rise of 1.2%. The S&P 500 increased 9.6% in the same time frame.

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The FDA stated that a component failure could cause the detector to fall unexpectedly while describing the problem. The agency states that if a detector is placed below the system gantry's center, the patient may sustain abrasions, contusions, lacerations, fractures, or other injuries, and the system's regular operation may be disrupted. Even if the detector is positioned above the gantry's center, regular system operation may still be interrupted.

Per Philips, the safety notification was issued in response to a single complaint regarding the same concern that was received in 2023. It was a byproduct of the post-market surveillance that Philips conducted. There were no reports of patient injury to the company.

In 2014, Philips discontinued manufacturing and distribution of the BrightView product line following reports of such incidents involving falling components. The business calculates that the safety notification may have an impact on about 1,000 still-in-use systems.

Customers were advised by Philips not to place a patient's lower limbs immediately beneath the detector below the gantry bore's center. If necessary, the business may arrange for a field service engineer to come to the location and fix the system.

The recall is likely to lead to a loss of sales in upcoming quarters. Moreover, such a recall tarnishes the company’s image.

Notable Developments

In December 2023, Philips announced three new ultra-lightweight magnetic resonance Smart Fit coils, namely Smart Fit TorsoCardiac 1.5T, Smart Fit 1.5T shoulder and Smart Fit Knee 3.0T at RSNA 2023.

All three coils enhance flexibility, reduce patient setup time, and improve image quality resolution with SmartSpeed AI solution.

Zacks Rank & Stocks to Consider

PHG carries a Zacks Rank #4 (Sell) at present.

Some better-ranked stocks to consider in the broader medical space are Universal Health Services (UHS - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Elevance Health, Inc (ELV - Free Report) .

Universal Health Services, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 4.4% for 2024. UHS’s earnings surpassed estimates in all the trailing four quarters, delivering an average surprise of 5.47%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

UHS’s shares have gained 1.9% in the past six months against the industry’s 5% decline.

Integer Holdings, presently carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 11.9%.

Integer Holdings’ shares have rallied 43.5% in the past year against the industry’s 3.7% decline.

Elevance Health, carrying a Zacks Rank of 2, reported fourth-quarter 2023 adjusted EPS of $5.62, beating the Zacks Consensus Estimate by 1.3%. Revenues of $42.45 billion outpaced the consensus mark by 1.5%.

Elevance Health has a long-term estimated growth rate of 12%. ELV’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 3.1%.

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