The U.S. Food and Drug Administration (FDA) asked Philips (PHG) to conduct additional testing of its ventilators and warned that the company's analysis of the recalled products was insufficient. Shares in the Dutch company fell 10% in Amsterdam, their biggest drop in a year.
The FDA said in a statement on October 5 that further testing of Philips' BiPAP and CPAP ventilators is needed to fully assess the risk these recalled devices pose to users.
Bernstein analyst Lisa BeDELL Live said the developments made it "more likely" that the U.S. would impose a sales ban. "The FDA clearly remains dissatisfied with the way the recall was handled."
Philips said on Friday it has been working with the FDA on its testing and research program and is in discussions with the regulator about the details of additional testing.
Philips first recalled potentially defective ventilators in June 2021, which the FDA classified as a Class 1 recall, the most serious type of recall. Philips has set aside about 1 billion euros ($1.1 billion) to recall about 5.5 million devices and agreed to pay at least $479 million to resolve some of the lawsuits. But Philips still faces a class-action lawsuit and possibly thousands of individual lawsuits.
Philips announced in early May that tests of its products showed that the vast majority of devices were unlikely to cause significant harm to patients' health.
Before the US stock market opened on Friday, Philips fell 9.74% to US$17.79 as of press time.