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Philips (PHG) Expands Partnership to Build Angio CT Solution
Fri, September 9, 2022, 9:11 PM
Koninklijke Philips PHG recently announced the expansion of its global network of partners in developing the Philips Spectral Angio CT suite and its use in clinical research. PHG’s partnership with the Leiden University Medical Center in the Netherlands is one of its most recent deals, which will help it realize its goal to build the world’s first spectral detector angio CT solution.
To build the technology, Philips will combine its Spectral CT 7500 system and its Image-Guided Therapy System – Azurion with FlexArm into a single solution. This will help interventionalists with an immediate access to two key imaging modalities to simultaneously perform procedures requiring both CT and angio guidance.
Leiden University Medical Center will help perform the clinical research to show how Philips’ spectral detector angio CT solution could potentially offer new treatment opportunities to the patient.
Philips is building the latest Angio CT solution to further benefit from its tried-and-tested strategic operational decision to build new products to attract more customers. PHG is consistently benefiting from strong demand for Image-Guided Therapy, Diagnostic Imaging, Ultrasound and Hospital Patient Monitoring system products as it is innovating an array of products in these verticals.
Philips Develops New Products to Fight Market Slump
Philips’ top-line growth in the second quarter of 2022 was negatively impacted by global supply shortages and lockdowns in China due to the resurgence of the COVID-19 pandemic in Shanghai and adjoined areas. Due to the lockdowns, production in various factories in China was halted, severely affecting the supply capabilities of Philips.
Additionally, adjusted EBITDA was hurt by lower sales volume as the rising inflation reduced demand for its products in high-margin businesses like patient monitoring, ultrasound and image-guided therapy systems, even though there is a positive review in the market regarding Philips’ new solutions.
Due to the current macroeconomic scenario, prospects are sluggish in the healthcare market worldwide. This is evident from the depreciating share price movement of Philips and its peers operating in the broader medical sector, including Acer Therapeutics ACER, Abeona Therapeutics ABEO and the General Electric GE subsidiary GE Healthcare.
Philips’ potential looks tepid in the near term. The stock currently has a Zacks Rank # 4 (Sell). Shares of PHG have plunged 53.9% in the year-to-date period compared with the Zacks Medical-Products industry and the Medical sector’s decline of 43.8% and 21.7%, respectively. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
ACER’s shares have fallen 39% in the year-to-date period compared with the Zacks Medical - Drugs industry’s decline of 24.4%.
Abeona’ stock has tanked 55.7% in the year-to-date period compared with the Zacks Medical - Biomedical and Genetics industry’s decline of 25.7%.
General Electric’s shares have slumped 23.6% in the year-to-date period compared with the Zacks Diversified Operations industry’s decline of 19.4%.
Philips also trimmed its guidance for the third quarter of 2022 as management expects these macroeconomic challenges — affecting the business operations — to persist. PHG expects 2022 comparable sales growth between 1% and 3% (down from previous guidance between 3% and 5%). Adjusted EBITA margin is expected to be 10%, driven by 6-9% comparable sales growth in the second half of 2022.
However, the Russia-Ukraine war and the pandemic exposed various issues in healthcare, highlighting how new, trending technologies like AI and virtual care solutions are required to support patients in these trying times, effectively.
To align with the changing market demands, Philips is developing AI-based products, which will aid in providing diagnosis faster. Also, with its expansion of clinical network, PHG is helping provide better care to patients in critical departments like interventional oncology.
The development of its AI-based solutions and expansion of clinical networks will aid in Philips top line growth in the long run.