Embecta (Nasdaq:EMBC) CEO Dev Kurdikar says the company set out for its second full year since spinning off from BD with three clear goals.
The company wanted to keep the core business strong, continue progressing on the separation and standing on its own and, finally, continue investing in growth — namely on its insulin patch pump development program.
Embecta’s core business continued to grow, completed a number of crucial projects related to the separation and continued the development of the patch pump with new partnerships and more.
“For now I’ll say I’m very pleased with our progress,” Kurdikar told Drug Delivery Business News. “We’ve continued exactly on the path that we laid out more than two years ago, now. We saw substantive progress in 2023. For 2024, it’s the same priorities, but we’re looking forward to getting closure on a few of these things.”
Just before the spin became official, Kurdikar laid out why the move enhanced the pure-play diabetes company’s business. At the start of this year, he explained to DDBN how the company started strong and what was still to come.
Now, as the company progresses — and the diabetes landscape undergoes some massive changes — Kurdikar offered insight into where Embecta is heading.
“When you first ring that bell on opening day, when the documentation of the spin is complete and the shares have been distributed to the new shareholders — that’s really the starting point of all the hard work that the teams have to do,” Kurdikar said.
How the GLP-1 craze impacts Embecta
The GLP-1 drug class, which includes Ozempic and Wegovy, has cast a shadow of doubt over diabetes technology of late. This therapeutic class, a glucagon-like peptide 1, has proven to lead to improved blood sugar control and weight loss.
In addition to the popular therapeutics, some companies — like i20 Therapeutics and Vivani Medical — are developing long-term implants that elute GLP-1s.
Positive clinical results from these drugs led to some negative market movement for a few of the biggest names in diabetes technology. It’s even led to caution around bariatric surgery, orthopedics and beyond. While GLP-1s aren’t technically “new,” the recent uptick in popularity has some in the industry concerned. Kurdikar and Embecta remain relatively unfazed.
According to Kurdikar, GLP-1s can slow disease progression and help overcome insulin resistance by making insulin work more effectively. However, while it could slow the need for insulin, Kurdikar said GLP-1s won’t eliminate it in people with type 2 diabetes.
He pointed to Ozempic’s compound annual growth rate (CAGR) of around 40% between fiscal 2018 and 2023. While that took place, he said insulin prescriptions stayed mostly flat with maybe a slight decline of 2%.
“The fact of the matter is, as a business in the U.S., we’ve been living with GLP-1s since they were first introduced in 2005,” Kurdikar said. “Ozempic, which garnered a lot of press attention, was introduced in 2018. … Our business has actually stayed flat through that entire time in the U.S. — it’s maybe even been slightly positive.
“When you look at that data, you go, ‘OK, GLP-1s have certainly risen. But they haven’t materially impacted either insulin or, certainly, our business.'”
On top of that, most of Embecta’s growth comes in emerging markets where people struggle just to get insulin, let alone GLP-1s. Plus, Kurdikar even sees a route to growth in this market for Embecta.
Kurdikar pointed to GLP-1s and their delivery methods — vials and syringes, pens and pen needles and autoinjectors. Embecta makes insulin syringes and could seek regulatory approval for GLP-1 delivery. With the once-weekly delivery of the drug, he says pens could offer a convenient form — the company makes viable pens for this as well.
Embecta isn’t in the autoinjectors market today, but that’s an area in which Kurdikar says the company has a lot of competency.
“GLP-1s are an injectable drug delivered through vials, which need syringes, or pens, which need pen needles, or autoinjectors,” he said. ”
“While folks often ask whether GLP-1s are a threat — certainly our U.S. data shows that they might slow the progression, but not eliminate it — we are also thinking about ways we can participate in the GLP-1 market,” he said.
Update on the company’s patch pump development
One of Embecta’s main goals when it first spun out of BD centered around a new, differentiated insulin patch pump technology. While many pumps address type 1 diabetes, like the Insulet Omnipod patch pump, Embecta is designing the patch pump to address the unmet needs of type 2 diabetes. Kurdikar said those with type 2 diabetes require more insulin today than type 1. Because of this, the company designed the pump with an increased reservoir capacity.
Embecta provided analysts with some details on the makeup of the system earlier this year. The first version will be an open-loop pump that will go through the FDA 510(k) regulatory review process. Embecta also has a closed-loop version under development to follow. That version features an embedded algorithm that requires Embecta to run a clinical study, the analysts wrote.
Kurdikar now says Embecta continues making progress, including signing an agreement with Tidepool. The company offers an FDA-cleared algorithm for type 1 diabetes and Embecta has work underway with it to adapt the algorithm for type 2.
“Essentially, we want to do an open-loop pump that can just act for insulin dosing with a wireless controller,” Kurdikar explained. “Then, we’ll do a clinical trial, implement the algorithm and apply for a closed-loop indication. That program continues to go really, really well.”
The timeline remains uncertain, but Kurdikar said he intends to provide more open communication on progress moving forward.
“Our goal is to return this company to growth. It’s going to take some time,” he said. “Certainly, the patch pump is going to be a vital part of that strategy.”
Does Embecta have plans for other products in the pipeline?
Kurdikar pointed to other areas as growth drivers, including reusable devices. Embecta currently offers single-use, disposable products, but the company has eyes on ways to impact the reuse rate.
The company has some pilot programs on a small scale to provide digital patient education and marketing on this front.
“We strongly believe you should be using one needle to avoid the risk of infection and other complications occurring from needle reuse,” he said. “We’ve seen some beneficial results [from pilot programs] but we are talking about changing human behavior. That’s going to be a long process.”
Additionally, Embecta sees a growing trend to use e-commerce to buy certain products, particularly in Asia. The company has work underway to establish channels to deliver products through e-commerce.
Kurdikar said the company has a “great go-to-market presence,” allowing it to go outside of just insulin delivery and meet the needs of patients with diabetes “in a more holistic way.”
“We recognize that a main imperative for us as a management team as a company is to get the top line growing,” he said. “This business has been flat for a number of years. The way we want to do that is obviously by adding products to the portfolio. Certainly, our patch pump is going to be a vital addition, but we also recognize that pumps are most useful in developed markets, notably the U.S., but we have such a vast geographic presence.
“We’re also thinking about what products can we add into other markets that may never come to the U.S., but where we can leverage either manufacturing expertise or our channel and really add products to the portfolio to drive growth that way.”
A changing diabetes landscape
With a move toward e-commerce and the general consumer-focused nature of diabetes technology, Kurdikar sees the market as unique.
“Diabetes is very consumer-centric,” he said. “People with diabetes are very involved and have to be with the management of their diabetes.”
Kurdikar sees more movement toward intelligence built into delivery systems, like the existing closed-loop technology on the market. With more sensors and more algorithms, he envisions seamless connectivity with providers.
Simplicity is the key, he says, and it remains a guiding principle to the design of the Embecta patch pump and more diabetes technology down the line.
“I think cracking that puzzle of how to make these devices simpler is going to help the adoption of these devices, Kurdikar said. “That will help people with diabetes.”
