Philips and Masimo Sign Business Partnership Agreement in Patient Monitoring and Select Therapy Solutions

Royal Philips (NYSE: PHG; AEX: PHIA) and Masimo Corporation (NASDAQ: MASI) today announced a wide-ranging, multi-year business partnership involving both companies’ innovations in patient monitoring and therapy
solutions. The partnership includes joint marketing and sales programs in North America and certain markets in Asia and Europe for Masimo’s non-invasive sensor technologies, such as its rainbow^® and SET^® platforms, in conjunction with Philips’ patient monitoring and select therapy solutions. In addition, Philips will in the future integrate Masimo SedLine^® brain function monitoring, O3™ regional oximetry, and Nomoline™ capnography technologies in certain Philips IntelliVue^® monitors.
Philips is a global leader in patient monitoring solutions with a
comprehensive product portfolio ranging from multi-parameter bedside
monitors to wearable patient monitors combined with mobile applications
and clinical decision support tools. With a primary focus on prediction
and prevention of patient deterioration, these integrated solutions aim
to support clinical workflow and caregiver efficiencies, and enhance
patient care. In 2015, an estimated 275 million patients were monitored
using Philips’ patient monitoring solutions.
Sensor and signal processing technologies are an essential component of
patient monitoring solutions, and Masimo is a prolific innovator in this
field. Examples of Masimo’s non-invasive sensor and signal processing
technology innovations include Masimo SET^® pulse oximetry,
Masimo rainbow^® Pulse CO-Oximetry and Masimo total hemoglobin
(SpHb^®) monitoring technology.
“This business partnership agreement marks an important day for us and
our customers as two leaders in patient monitoring collaborate to
develop solutions designed to enhance clinical outcomes and patient
safety,” said Frans van Houten, CEO of Royal Philips. “I am very
satisfied that we have reached an agreement that is beneficial for both
companies and that we have ended our legal disputes. Going forward,
Philips and Masimo will completely focus on jointly delivering
meaningful innovations to our customers, such as the integration of
Masimo rainbow^® technology across our IntelliVue^®
patient monitoring product range.”
“It’s wonderful to think that Masimo and Philips will be working
together for the benefit of patients and clinicians around the world,”
said Joe Kiani, Chairman and CEO of Masimo. “I am delighted that we were
able to reach this important agreement which allows us to focus on the
future to deliver the solutions that our customers have been looking
for.”
In conjunction with the appropriate Philips patient monitoring platform,
Masimo’s rainbow SET™ technology analyzes multiple wavelengths of light
to accurately measure total hemoglobin (SpHb), oxygen content (SpOC^™),
carboxyhemoglobin (SpCO^®), methemoglobin (SpMet^®)
and Pleth Variability Index (PVI^®) non-invasively and
continuously. Continuous monitoring of SpHb on a Philips monitor at the
point of care provides clinicians with real-time visibility to changes
in hemoglobin in between invasive blood samplings.
Anticipated cash flow and income consequences for Philips
As part of the business partnership agreement, Philips and Masimo have
agreed to end all pending lawsuits between the two companies, which
includes that Philips is released from paying the USD 467 million
(approximately EUR 428 million) jury verdict that was awarded to Masimo
in October, 2014. Philips has agreed to make a USD 300 million cash
payment (approximately EUR 275 million) to Masimo in the fourth quarter
of 2016; and to invest in the relationship by making certain marketing
and product integration commitments over the coming years. Entering into
the business partnership agreement has minimal impact on income from
operations (EBIT) in the fourth quarter of 2016.
Anticipated cash flow and income consequences for Masimo
As the result of anticipated legal fee savings during the fourth fiscal
quarter, Masimo now expects its fiscal 2016 GAAP earnings per diluted
share, exclusive of the impact of the business partnership agreement, to
be $2.14, up from $2.13. Masimo expects to use some of the after-tax
proceeds from the business partnership agreement to repay amounts
outstanding under its revolving line of credit. The guidance set forth
above is an estimate only and actual performance could differ.
About Royal Philips
Royal Philips (NYSE: PHG, AEX: PHIA) is a leading health technology
company focused on improving people’s health and enabling better
outcomes across the health continuum from healthy living and prevention,
to diagnosis, treatment and home care. Philips leverages advanced
technology and deep clinical and consumer insights to deliver integrated
solutions. Headquartered in the Netherlands, the company is a leader in
diagnostic imaging, image-guided therapy, patient monitoring and health
informatics, as well as in consumer health and home care. Philips’
health technology portfolio generated 2015 sales of EUR 16.8 billion and
employs approximately 70,000 employees with sales and services in more
than 100 countries. News about Philips can be found at www.philips.com/newscenter.
About Masimo
Masimo (NASDAQ: MASI) is a global leader in innovative noninvasive
monitoring technologies. Our mission is to improve patient outcomes and
reduce the cost of care by taking noninvasive monitoring to new sites
and applications. In 1995, the company debuted Masimo SET^® Measure-through
Motion and Low Perfusion^™ pulse oximetry, which has been
shown in multiple studies to significantly reduce false alarms and
accurately monitor for true alarms. Masimo SET^® is estimated
to be used on more than 100 million patients in leading hospitals and
other healthcare settings around the world. In 2005, Masimo introduced
rainbow^® Pulse CO-Oximetry technology, allowing noninvasive
and continuous monitoring of blood constituents that previously could
only be measured invasively, including total hemoglobin (SpHb^®),
oxygen content (SpOC^™), carboxyhemoglobin (SpCO^®),
methemoglobin (SpMet^®), and more recently, Pleth Variability
Index (PVI^®) and Oxygen Reserve Index (ORi^™), in
addition to SpO₂, pulse rate, and perfusion index (PI). In
2014, Masimo introduced Root^®, an intuitive patient
monitoring and connectivity platform with the Masimo Open Connect^™ (MOC-9^™)
interface. Masimo is also taking an active leadership role in mHealth
with products such as the Radius-7^® wearable patient monitor
and the MightySat^™ fingertip pulse oximeter. Additional
information about Masimo and its products may be found at www.masimo.com.
All published clinical studies on Masimo products can be found at www.masimo.com/cpub/clinical-evidence.htm.
Forward-Looking Statements – Royal Philips
This release may contain certain forward-looking statements with respect
to the financial condition, results of operations and business of
Philips and certain of the plans and objectives of Philips with respect
to these items. By their nature, forward-looking statements involve risk
and uncertainty because they relate to events and depend on
circumstances that will occur in the future and there are many factors
that could cause actual results and developments to differ materially
from those expressed or implied by these forward-looking statements.
Forward-Looking Statements – Masimo
This press release includes forward-looking statements as defined in
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, in connection with the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations about future events
affecting us and are subject to risks and uncertainties, all of which
are difficult to predict and many of which are beyond our control and
could cause our actual results to differ materially and adversely from
those expressed in our forward-looking statements as a result of various
risk factors, including, but not limited to: risks related to our
assumptions regarding the repeatability of clinical results; risks
related to our belief that Masimo’s unique noninvasive measurement
technologies contribute to positive clinical outcomes and patient
safety; risks related to our belief that Masimo noninvasive medical
breakthroughs provide cost-effective solutions and unique advantages; as
well as other factors discussed in the “Risk Factors” section of our
most recent reports filed with the Securities and Exchange Commission
(“SEC”), which may be obtained for free at the SEC’s website at www.sec.gov.
Although we believe that the expectations reflected in our
forward-looking statements are reasonable, we do not know whether our
expectations will prove correct. All forward-looking statements included
in this press release are expressly qualified in their entirety by the
foregoing cautionary statements. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of
today’s date. We do not undertake any obligation to update, amend or
clarify these statements or the “Risk Factors” contained in our most
recent reports filed with the SEC, whether as a result of new
information, future events or otherwise, except as may be required under
the applicable securities laws.