Becton Dickinson Spinoff Embecta Stops Insulin Patch Pump Program, Plans Restructuring, Stock Jumps

On Tuesday, Embecta Corp EMBC posted the fourth-quarter adjusted EPS of 45 cents, beating the consensus of 36 cents and down from 59 cents reported a year ago.

The company reported quarterly sales of $286.1 million, up 1.5% year over year, beating the consensus of $277 million.

“We are pleased to report a strong fourth quarter and end to our fiscal year, as we once again delivered results that exceeded our expectations across key financial metrics…Additionally, the recent launch of our small-pack GLP-1 needles in Germany has gone well, and we are evaluating expanding into other markets,” said Devdatt (Dev) Kurdikar, Chief Executive Officer of Embecta.

The Becton, Dickinson and Company BDX spin-off announced that it decided to discontinue its insulin patch pump program and plans to initiate a restructuring plan.

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

“We intend to concentrate our resources on our core business and to prioritize our free cash flow towards paying down debt, which we expect will give us the financial flexibility needed for future investments,” Kurdikar said.

Embecta expects between $25 million and $30 million in pre-tax, cash charges for planned workforce reductions and other associated costs from the discontinuation of its patch pump program.

In total, Embecta expects between $35 million and $45 million in pre-tax charges in 2025 related to its restructuring plan. It anticipates completing the restructuring in the first half of 2025. Embecta projects annual cost savings of $60 million to $65 million from this restructuring.

Given the organizational restructuring plan, the company has postponed its Analyst & Investor Day to Spring 2025.

Guidance: Embecta says that for the fiscal year 2025, excluding the Patch Pump program, revenues are expected to be $1.093 billion—$1.11 billion compared to a consensus of $1.12 billion, with an adjusted EPS of $2.70—$2.90 versus the consensus of $2.27.

Price Action: EMBC stock is up 33.5% at $19.23 at last check Tuesday.

Image via Unsplash

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