Medtronic scraps deal to acquire wearable insulin patch maker EOFlow

Medtronic has terminated its $738-million deal to acquire South Korean wearable insulin patch maker EOFlow, citing multiple breaches in their prior agreements. Medtronic disclosed the decision in a recent US Securities and Exchange Commission (SEC) filing, without specifying the breaches.  

When first announced in May, Medtronic said the deal, together with its meal detection technology algorithm and next-generation continuous glucose monitor (CGM), would expand its ability to serve more people with diabetes globally. EOFlow's EOPatch tubeless insulin delivery device, authorised in Europe, South Korea, Indonesia and the United Arab Emirates, is compatible with a smartphone app that allows users to monitor and control the patch directly from their phone. The deal was expected to close by the end of the year. 

In a statement, Medtronic said "we remain steadfast in our commitment to bringing a differentiated patch pump to market that integrates our most advanced CGM platform and clinically proven meal detection technology algorithm." 

No termination fee

Medtronic does not believe it will need to pay any termination fee related to the merger agreement. The company also noted that the decision will not impact its fiscal 2024 adjusted earnings guidance range of $5.13 to $5.19 per share. Last month, Medtronic reported that second quarter sales in its diabetes segment climbed 9.7% year-on-year to $610 million, topping forecasts of $588.4 million.

Meanwhile, Eoflow has been embroiled in legal issues with insulin pump developer Insulet. In the summer, Insulet sued EOFlow, claiming that its technology was based on stolen trade secrets. 

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