In today’s briefing:
- EOFLOW/Medtronic Tender: Insulet’s US Complaint Materially Increases Deal Break Risks
- Pre-IPO HealthyWay – The Business Model Lacks Core Competitiveness
- Shofu (7979 JP) – Domestic Star Franchise Aiming for Global Center Stage
- MariMed, Inc. – 2Q Revenue Expands While Adjusted EBITDA Declines
EOFLOW/Medtronic Tender: Insulet’s US Complaint Materially Increases Deal Break Risks
- Insulet Corp (PODD US) filed with the United States District Court a complaint for patent infringement against Eoflow (294090 KS), Flex (FLEX US), Luis Malave, Steven DiIanni, and Ian Welsford.
- Insulet’s primary allegation is that Eoflow’s EOPatch device is built using Insulet’s proprietary trade secrets and infringes three Insulet US patents (‘741, ’883 and ‘950 patents).
- The most likely scenarios are that Medtronic Plc (MDT US) and Insulet sign a licensing agreement (resulting in a possible tender offer price cut) or Medtronic walks.
Pre-IPO HealthyWay – The Business Model Lacks Core Competitiveness
- HealthyWay cannot rely on drug/product sales to achieve rapid expansion of revenue scale because it hasn’t huge user base accumulated on e-commerce platforms like Taobao/JD.com, leading to different business model.
- Relying on Baidu’s search engine to guide traffic could be worthless, because B-end users would not pay for the traffic that cannot provide added value.HealthyWay hasn’t a strong cornerstone business.
- HealthyWay’s valuation should be lower than that of ClouDr. Due to the lack of imagination space in business model, it would to some extent suppress the valuation growth of HealthyWay.
Shofu (7979 JP) – Domestic Star Franchise Aiming for Global Center Stage
From a niche player to a global high-flyer – Shofu is a domestic market leader in developing and manufacturing dental materials and equipment.
With its proprietary technology and expertise, it is aiming to become a global top 10 player with a strategic focus on overseas expansion.
With an addressable market estimated to become up to 20 times larger than Japan, growth prospects are high and the company is gaining solid traction with FY3/2023 results set to reach record highs.
MariMed, Inc. – 2Q Revenue Expands While Adjusted EBITDA Declines
MariMed reported second-quarter revenue of $36.5 million, which was modestly ahead of our estimate of $36.0 million.
This is a 10.6% Y/Y increase in revenue and a 6.2% improvement Q/Q.
Higher revenue was driven by the opening of the adult-use Panacea Wellness Store in Beverly Massachusetts on April 25 and the Thrive Wellness medical dispensary in Tiffin, Ohio that opened on June 12. During 2Q, MariMed also benefited from its recent approval to begin manufacturing and selling high- dose edibles in Maryland.
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