Insulin Device Maker Embecta Weighs Sale After 70% Share Decline Following Becton Dickinson Spin-Off

Embecta Corp EMBC, a manufacturer of disposable insulin pen needles and syringes, is considering a potential sale following a significant drop in its share price since being spun off from health tech giant Becton, Dickinson and Company BDX.

The medical technology company, which supplies approximately 8 billion syringes and needle pens annually across more than 100 countries, has engaged advisers from Centerview Partners to explore a sale.

Embecta’s share price has plummeted nearly 70% since its April 2022 spin-off, leaving the Nasdaq-listed firm valued at $2.1 billion.

The decline is attributed to several factors, including the impact of GLP-1 drugs such as Novo Nordisk A/S’s NVO Ozempic, reducing demand for traditional insulin treatments for type 2 diabetes.

Despite this, the Financial Times notes that Devdatt Kurdikar, Embecta’s CEO, remains optimistic, suggesting that the presence of GLP-1 drugs has only delayed, not eliminated, the need for insulin.

The company’s U.S. business, which generates about half of its revenue, has been particularly affected by the shift towards GLP-1 medications.

The FT report, citing analysts, also notes that declining profit margins and the costs associated with separating from Becton Dickinson have negatively impacted Embecta’s stock performance.

For the fiscal year ending in September, Embecta’s adjusted net income is expected to decrease by 23% to $132 million, while annual revenues are projected to hold steady around $1.1 billion.

Despite the current challenges, Kurdikar points to potential growth opportunities, including increasing diabetes rates in developing regions where insulin remains the preferred treatment and the potential approval of a new insulin patch pump by the FDA, which could enhance the company’s growth prospects.

While a sale remains a possibility, the outcome is uncertain, and Embecta could continue as a listed entity.

Price Action: EMBC stock is up 7.18% at $16.27 at last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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