Source: Siyu MedTech; Editor: Liu XinyiReprint Requirements: Please indicate the source of the article at the beginning of the text, and it can be reprinted directly.On December 6, 2023, Medtronic submitted an 8-K report to the U.S. Securities and Exchange Commission, statingTermination of AcquisitionInsulin Patch Pump Manufacturer EOFlow。
# Acquisition Review
In May this year, MedtronicAnnouncementWill$738 million (approximately 5.2 billion RMB) to acquire EOFlow, a series of agreements were signed at the time to acquire all shares of the latter. The acquisition is expected to be completed in the second half of 2023, subject to meeting the minimum tender condition, certain customary closing conditions, and obtaining regulatory approval.
However, this time Medtronic stated: “Due to EOFlow's repeatedViolationMedtronic has the right to terminate the agreement to acquire EOFlow. However, we will continue to develop a market-differentiated patch pump (integrated with our advanced continuous glucose monitoring platform and meal detection technology algorithm)., hoping that one day it will be market-oriented." Meanwhile, in a document submitted to the U.S. Securities and Exchange Commission, Medtronic stated that according to the agreement, Medtronic is not required to pay the transaction termination fee, and the termination of the transaction will not affect Medtronic's financial guidance for the fiscal year 2024.
# Violation? Why is it a violation?
EOFlow is a Korean company founded in 2011, which isGlobalThe Second OneDevelopment of Tubeless, Disposable Wearable Insulin Pumps (The First Company is Insulet), listed on the KOSDAQ in South Korea in September 2020, with the stock code 294090. The company's flagship product isEOPatch，A Tubeless, Wearable, Fully Disposable Insulin Pump。What Medtronic had previously set its sights on was precisely this product,Hope to combine Medtronic's own advancedContinuous Glucose Monitoring PlatformAndDietary Detection Technology Algorithm(Meal Detection Technology™), using this product to expand the company's diabetes business. However, the termination of this transaction is most likely due to the suspicion of plagiarism surrounding this product.In August 2023, Insulet, the long-standing giant in the insulin patch pump industry, filed a lawsuit in the United States against EOFlow, claiming that the company's EOPatch insulin patch pump infringed on Insulet'sOmnipodInsulin Patch PumpThe three patents, and alsoSaying that the design of these two products is "actually the same," and many of the internal components are also completely interchangeable.。In addition, EOFlow Company was included.Three Former Executives of Insulet Corporation(Former Chief Operating Officer Luis Malave, Former Director of Mechanical Engineering Steven DiIanni, Former Director of Regulatory Affairs Ian Welsford)Accused of leaking trade secrets. Including Insulet CorporationContract Manufacturer Flex(Also signed an agreement with EOFlow to understand the details of Insulet's product manufacturing),Also appeared in the dock。Insulet has long been a leader in the insulin patch pump industry. However, following the announcement in May that Medtronic intends to acquire EOFlow, a rising star in the insulin patch pump market, Insulet's stock price plummeted dramatically. In the complaint it filed, the company strongly stated: "Medtronic is a large and powerful competitor. If EOFlow discloses Insulet's trade secrets to Medtronic after being acquired, it would cause irreparable harm to Insulet and could even render all of Insulet's trade secrets worthless.。”
Insulet Secures Preliminary Victory in This Lawsuit at the U.S. District Court for the District of MassachusettsIn August, a release was made regarding the EOPatch insulin patch pump.Temporary Injunction(TRO, generally valid for 14 days. To obtain a longer-term injunction, the plaintiff usually also applies to the court for a preliminary injunction);In October, the court issued anotherPreliminary Injunction(PIO, the validity period can last until the end of the litigation.) Previously, in March, Insulet also filed a lawsuit against EOFlow in Germany, where the court ruled to suspend the sale of the EOPatch insulin patch pump in Germany.
After the preliminary injunction took effect, EOFlowSuspends Trading on KOSDAQ in South Korea,The suspension will last until the company decides whether to accept the Kosdaq listing eligibility review. In addition, EOFlow alsoSuspension of the Production, Sales, and Marketing of EOPatch ProductsHowever, the production and sales of EOPump remain unchanged.# The Battle of Insulin Patch Pumps: EOPatch vs. OmnipodEOPatch Insulin Patch Pump is the world's second tubeless, wearable, disposable all-in-one insulin patch pump.Completed the prototype in 2015, finished animal experiments in 2018, obtained the MFDS medical device registration certificate in South Korea and the CE certification in the European Union in 2020, and submitted an application for market approval to the U.S. FDA in January 2023.. The product has previously gained market access in Europe, South Korea, Indonesia, and the United Arab Emirates, andPlan to Enter the Chinese Market(In 2021, EOFlow established a joint venture, SINOFLOW Co., Ltd., in China with Changsha Sinocare Co., Ltd.)EOPatch byPatch pump (with a reservoir capacity of 2ml), touch screen controller (ADM), and advanced tube software constitute, patients can control the patch pump to inject insulin on the corresponding device, with the following characteristics:- Can provide continuous basal insulin delivery and/or additional bolus insulin delivery within a short period of time;
- Adopting advanced sensing technology, it can quickly detect insulin blockage even at the lowest delivery speed;
- With a safe and painless insertion method, the system prompts whether the catheter is correctly inserted. The insertion speed is faster than other brands, and the catheter is softer, reducing discomfort during wear.
The patch pump of EOPatch, relative to Omnipod,Thinner, Smaller. The device is also waterproof. PatientThe patch pump needs to be replaced every 3.5 days on average.(Reduced the possibility of infection), which means that about two patch pumps are consumed per week. Previously, a box (containing 9 pumps) was sold for 2047 RMB.A box is sufficient for a patient to use for one month.。EOPatch's dedicated touchscreen controller, similar to a smartphone, connects to the patch pump via Bluetooth. The screen is color-display and can store 90 days of patient data. Additionally, EOPatch has a compatible smartphone application called EOBridge, which allows users to monitor and control the patch pump directly from their phone, such as checking the remaining insulin, setting basal and pre-meal doses, and viewing historical records.The OmniPod system received FDA 510(k) clearance as early as 2003, and its commercial version was approved by the FDA in 2005.It has currently been upgraded toOmnipod5(The product of the partnership with DexCom) was fully launched in the United States on August 2, 2022. This system consists ofComposed of a tubeless pump, Dexcom G6 Continuous Glucose Monitor, and a mobile application (equipped with the SmartAdjustTM Artificial Pancreas - Closed Loop Algorithm System, usable on a smartphone or provided remote control).。Omnipod5 Patch PumpCan be worn continuously for 3 days (if used beyond the time limit, it can still be used within 8 hours, during which the patch pump will beep a reminder every 10 minutes), and can hold up to 200 units of insulin.. This patch pump alsoWaterproof, with a waterproof rating of IP28, and certified by experiments to continuously function normally for 60 minutes at a diving depth of 7.6 meters.In addition, the Omnipod 5 system features a SmartBolus calculator, which isThe Only Automatic Insulin Delivery System (AID) with a Built-in Dose CalculatorThe patch pump automatically increases, decreases, or pauses insulin bolus delivery every 5 minutes based on glucose readings from the Dexcom G6 CGM.# Medtronic's Diabetes BusinessMedtronic's decision to terminate the agreement this time may stem not only from fears of being entangled in infringement disputes but also from confidence in its own diabetes business and products. On November 21, 2023, Medtronic announced its financial results for the second quarter of the 2024 fiscal year, which ended on October 27, 2023. The report showed,Diabetes business revenue in the second quarter was $610 million, a year-over-year increase of 9.7%, with organic growth of 6.7%.
Medtronic's diabetes business was previously mired in a long-term predicament due to a warning letter from the FDA. In December 2021, the FDA pointed out that Medtronic’s MiniMed 600 series insulin pumps had been reported to have issues thousands of times, but Medtronic failed to properly classify the risks to patients and did not initiate a recall, resulting in the issuance of a warning letter.Medtronic's commercialization process for diabetes-related products in the U.S. has been almost completely halted, and subsequently, the performance of its diabetes business has relied almost entirely on the international market.。By April 2023, Medtronic announced that the FDA had lifted the warning letter related to its diabetes business headquarters. In the same month, Medtronic also announced itsMiniMed 780G System with Guardian 4 Sensor Receives FDA Approval, it can be used for Type 1 diabetes patients aged 7 years and above. This approval makes the device the only system with meal detection technology, which can automatically adjust and correct blood glucose levels every five minutes to address issues where users forget to bolus or underestimate the amount of carbohydrates in a meal. By September, Medtronic's new integrated, disposableSimplera™ Continuous Glucose Monitor (CGM) Receives CE Mark Approval Again. In addition, Medtronic's diabetes product pipeline also includesInPen Smart Insulin PenCurrently, Medtronic is also developing a patch pump with market differentiation.
