World’s 2nd Disposable Insulin Pump System to Debut on March 29
The authors are analysts of Shinhan Investment Corp. They can be reached at shawn1225@shinhan.com and jhwon@shinhan.com, respectively. – Ed.
Domestic launch of EOPatch slated for end-March; CE marking expected within May
The launch of EOPatch, which has been anticipated since the IPO of Eoflow, is imminent. The company plans to roll out the world’s second disposable insulin pump system in the domestic market on March 29. It will be sold through its domestic partner Huons in both online and offline channels. The CE marking to sell in Europe will likely be obtained within May. With the schedule for EOPatch taking shape, related earnings momentum should pick up.
CB issuance to help get ahead in competition with Insulet
As we mentioned in our January 20 report, Eoflow issued convertible bonds (CBs) worth KRW35bn to fund the acquisition of a pharmaceutical firm for new businesses and accelerate R&D efforts. The raised capital will be used for: 1) development of new wearable drug delivery solutions; 2) clinical trials and R&D on wearable artificial pancreas (AP); and 3) R&D and licensing efforts at the US subsidiary developing wearable artificial kidney.
The fund raised through CB issuance should help Eoflow get ahead in the competition with Insulet. Non-insulin drug delivery solutions are a major contributor to Insulet’s growth, accounting for about 10% of total sales. Eoflow is also expected to see significant sales from non-insulin drug delivery solutions going forward, as well as EOPatch and wearable AP products (EOPatch X, EOPani). We believe expansion into the wearable artificial kidney market where Insulet has no presence will strengthen Eoflow’s competitiveness against Insulet once related sales start to grow in earnest.
Penetration into Europe and US to accelerate; no need for concerns
Following the domestic launch of EOPatch, Eoflow plans to ramp up sales to a European partner after obtaining the CE marking in May. Negotiations are well underway to sell the product in the US through a local partner. We find Eoflow more attractive than Insulet given expansion into markets for wearable artificial pancreas/kidney and non-insulin drug delivery solutions. Insulet’s market cap remains high at KRW18.9tr despite the recent correction. This bodes well for the share price of Eoflow, the only competitor in the global market for disposable insulin pump systems.