Global medtech giant Medtronic is hoping that its latest acquisition – EOFlow, a South Korean wearable insulin patch maker – will enhance its competitiveness in the global diabetes market.
The acquisition deal, as reported by Hyun-Ah Oh from Korea Economic Daily, involves the purchase of all shares held by EOFlow CEO Jesse Kim and President Luis Malave.
Medtronic aims to secure EOFlow’s insulin patch technology and market share to expand its ability to treat more diabetes patients. EOFlow’s EOPatch, a tubeless, wearable, and fully disposable insulin delivery device, utilizes proprietary microfluidic technology for precise and reliable insulin delivery. With authorizations in Europe, South Korea, Indonesia, and the United Arab Emirates, the EOPatch can be controlled and monitored through a compatible smartphone application, notes Andrea Park of Fierce Pharma.
The acquisition marks a significant milestone in Medtronic’s mission to serve more people living with diabetes worldwide. According to the International Diabetes Federation, diabetes affects approximately 463 million adults globally, and this number is expected to rise to 700 million by 2045. Access to diabetes medication has become a hot topic in recent months, with the world’s largest producers of insulin – Eli Lilly, Novo Nordisk, and Sanofi – all finally agreeing to cap prices in the US.
After the announcement, EOFlow’s shares surged, reaching their highest level since November 2021, reported Oh. Medtronic intends to acquire all outstanding shares in EOFlow and fully integrate the company into its operations, delisting it from the stock market.
The trend of foreign companies targeting South Korean medical equipment manufacturers with strong technological competitiveness continues, following similar acquisitions such as Japan’s Olympus acquiring Taewoong Medical. and MBK Partners and Unison Capital Korea taking over Osstem Implant, as highlighted by Oh.
The acquisition of EOFlow positions Medtronic to further innovate and deliver comprehensive solutions for diabetes management, leveraging its own diabetes technology, including continuous glucose monitors and meal-detection algorithms. Medtronic’s expansion in the patch pump market aims to simplify diabetes management and provide customers with a seamless ecosystem of support, according to Que Dallara, Medtronic’s executive vice president and president for the diabetes business.
In addition to the acquisition, Medtronic’s fiscal year 2023 earnings report showcased the importance of diabetes to the company’s bottom-line, with the segment contributing nearly USD 2.3 billion to total revenue. Park points out that the recent resolution with the FDA over a warning letter regarding its diabetes business headquarters in California and the upcoming launch of the MiniMed 780G insulin pump in the US are expected to drive growth and strengthen Medtronic’s position in the diabetes market.
The acquisition is expected to close in the second half of 2023, subject to the acquisition of the minimum required number of shares and the necessary regulatory clearances.
