Embecta ( EMBC ) Corp , 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 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 ( BDX ) 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 ( EMBC ) 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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