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Philips (PHG) Receives FDA Warning Letter Regarding CT Systems
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Koninklijke Philips (PHG - Free Report) recently received a warning letter from the FDA that outlines issues regarding imaging technology manufacturing practices in China for the Philips Incisive CT patient interface monitor (PIM).
The FDA found that the devices are "adulterated" after investigating the Suzhou, China, manufacturing plant. The inspection was conducted from Oct 23 to Oct 26, 2023. On Feb 23, 2024, Philips received a letter detailing the faults in the computed tomography (CT) systems manufacturing.
Price Performance
For the past six months, PHG’s shares have gained 12% compared with the industry’s rise of 19.8%. The S&P 500 increased 22.9% in the same time frame.
Image Source: Zacks Investment Research
More on the Violations
The letter from the FDA listed two violations. The first point made was that the kind and degree of control that was to be exerted over the goods, services, vendors, contractors, and advisors was not sufficiently defined. The agency claimed that Philips was negligent in assuring the injection molding procedure that the provider of the Philips Incisive CT PIM data cable utilized was validated.
After receiving 64 complaints about connection problems, Philips changed the cable and carried out a field correction. The ECG gating signal loss or error was caused by this connection failure, which can lead to repeat scans and a postponement of the diagnosis. The FDA discovered that the devices were misbranded and said that the company's response was insufficient. The FDA identified another violation where Philips neglected to provide the organization with a formal report detailing on device modification or removal.
Risks included many software bugs and a failed cable connection for the CT patient interface monitor. One flaw produced photos that were upside-down or inverted, which could lead to a mistaken diagnosis. A further flaw resulted in improper image orientation and artifacts, which could lead to a misdiagnosis.
Philips intends to complete all necessary actions in a timely manner. It does not anticipate production or shipment disruptions or a material financial impact.
Notable Developments
Philips recently announced a final consent decree between the FDA and the U.S. Department of Justice. The consent decree primarily focuses on Philips Respironics’ business operations in the United States. It offers clarity and a defined roadmap to demonstrate compliance with regulatory requirements and restore the Philips Respironics business.
Philips and SyntheticMR recently announced the launch of Smart Quant Neuro 3D, which is likely to be a significant development in the objective decision support field for the diagnosis and treatment evaluation of brain illnesses such as dementia, traumatic brain injury, and multiple sclerosis.
The company also announced the launch of its new Azurion neuro biplane system, which is likely to be a major improvement to its Image Guided Therapy System.
Some better-ranked stocks in the broader medical space are IDEXX Laboratories, Inc. (IDXX - Free Report) , Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, and Ecolab Inc. (ECL - Free Report) .
IDEXX, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 11.6%. IDXX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
IDEXX’s shares have gained 2.9% compared with the industry’s 3.9% rise in the past year.
BD, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 9.4%. BDX’s earnings surpassed estimates in three of the trailing four quarters and broke even once, with the average being 4.6%.
BD has lost 11.1% against the industry’s 4.9% rise in the past year.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.7%.
Ecolab’s shares have rallied 33.8% against the industry’s 9.3% decline in the past year.
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Philips (PHG) Receives FDA Warning Letter Regarding CT Systems
Koninklijke Philips (PHG - Free Report) recently received a warning letter from the FDA that outlines issues regarding imaging technology manufacturing practices in China for the Philips Incisive CT patient interface monitor (PIM).
The FDA found that the devices are "adulterated" after investigating the Suzhou, China, manufacturing plant. The inspection was conducted from Oct 23 to Oct 26, 2023. On Feb 23, 2024, Philips received a letter detailing the faults in the computed tomography (CT) systems manufacturing.
Price Performance
For the past six months, PHG’s shares have gained 12% compared with the industry’s rise of 19.8%. The S&P 500 increased 22.9% in the same time frame.
Image Source: Zacks Investment Research
More on the Violations
The letter from the FDA listed two violations. The first point made was that the kind and degree of control that was to be exerted over the goods, services, vendors, contractors, and advisors was not sufficiently defined. The agency claimed that Philips was negligent in assuring the injection molding procedure that the provider of the Philips Incisive CT PIM data cable utilized was validated.
After receiving 64 complaints about connection problems, Philips changed the cable and carried out a field correction. The ECG gating signal loss or error was caused by this connection failure, which can lead to repeat scans and a postponement of the diagnosis. The FDA discovered that the devices were misbranded and said that the company's response was insufficient. The FDA identified another violation where Philips neglected to provide the organization with a formal report detailing on device modification or removal.
Risks included many software bugs and a failed cable connection for the CT patient interface monitor. One flaw produced photos that were upside-down or inverted, which could lead to a mistaken diagnosis. A further flaw resulted in improper image orientation and artifacts, which could lead to a misdiagnosis.
Philips intends to complete all necessary actions in a timely manner. It does not anticipate production or shipment disruptions or a material financial impact.
Notable Developments
Philips recently announced a final consent decree between the FDA and the U.S. Department of Justice. The consent decree primarily focuses on Philips Respironics’ business operations in the United States. It offers clarity and a defined roadmap to demonstrate compliance with regulatory requirements and restore the Philips Respironics business.
Philips and SyntheticMR recently announced the launch of Smart Quant Neuro 3D, which is likely to be a significant development in the objective decision support field for the diagnosis and treatment evaluation of brain illnesses such as dementia, traumatic brain injury, and multiple sclerosis.
The company also announced the launch of its new Azurion neuro biplane system, which is likely to be a major improvement to its Image Guided Therapy System.
Koninklijke Philips N.V. Price
Koninklijke Philips N.V. price | Koninklijke Philips N.V. Quote
Zacks Rank & Stocks to Consider
PHG carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the broader medical space are IDEXX Laboratories, Inc. (IDXX - Free Report) , Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, and Ecolab Inc. (ECL - Free Report) .
IDEXX, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 11.6%. IDXX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 8.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
IDEXX’s shares have gained 2.9% compared with the industry’s 3.9% rise in the past year.
BD, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 9.4%. BDX’s earnings surpassed estimates in three of the trailing four quarters and broke even once, with the average being 4.6%.
BD has lost 11.1% against the industry’s 4.9% rise in the past year.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.7%.
Ecolab’s shares have rallied 33.8% against the industry’s 9.3% decline in the past year.