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John R. Fischer, Senior Reporter | December 14, 2023
Medtronic has called off its plans to acquire insulin patch maker EOFlow.
Medtronic has called off a $738 million acquisition of South Korean company EOFlow Co., which manufactures wearable insulin patches.
In an SEC filing earlier this month, Medtronic said the company had breached their agreement multiple times but did not go into detail on what the specific violations entailed,
according to the Star Tribune.
EOFlow’s insulin pumps are tubeless, wearable, and fully disposable, and Medtronic had planned to quickly integrate it into its global diabetes business, which, until this year was plagued by a series of recalls, sales declines, issues at a California plant, and FDA warnings over the last few years.
Medtronic announced plans to buy it back in May as part of an attempt to revamp its diabetes division, seeing growth opportunities.
While Medtronic’s smallest division, with $2.3 million in total fiscal 2023 sales, CEO Geoff Martha in September said it was one of its main priorities due to the potential size of the diabetes market,
reported the Star Tribune. This month, the news outlet reported that sales in the market rose nearly 10% in the second quarter.
"Medtronic has exercised its rights to terminate its agreement to acquire EOFlow as a result of multiple breaches on their part," said Medtronic in a statement.
Back in April, the FDA lifted its warning letter over how the unit handled complaints and recalls after 16 months and approved Medtronic’s MiniMed 780G, the most recent generation of its insulin pumps. Approval had been delayed while regulatory issues were being sorted out.
Founded in 2011, EOFlow has faced several legal battles, including a current one with Insulet Corp., in Massachusetts, which accused it of making its patch insulin pump with stolen trade secrets from Insulet. Medtronic is not part of that litigation.
In its SEC filing, Medtronic said the deal cancellation "does not impact Medtronic's fiscal year 2024 adjusted earnings per share guidance range,” and it does not believe it will have to pay a termination fee.
"We remain steadfast in our commitment to bringing a differentiated patch pump to market that integrates our most advanced CGM [continuous glucose monitor] platform and clinically proven meal detection technology algorithm,” said the company.
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