EOFlow said that it has terminated the contract with Medtronic for the latter to acquire the company.

"Over the past few weeks, both sides have worked to find common ground, but due to fundamental differences in view regarding the recent situation of our company, we decided to terminate the contract with Medtronic," EOFlow CEO Kim Jae-jin said.

The situation refers to EOFlow recently embroiled in an intellectual property right (IPR) infringement lawsuit in the U.S.

Insulet lodged a civil lawsuit on Aug. 3, asserting that EOFlow's EOPatch infringes upon the patents of its Omnipod product, speculating that their former executives, now employed by EOFlow, might have leaked confidential information.

EOPatch is Korea's first tubeless, wearable, and disposable insulin pump device and allows continuous subcutaneous insulin infusion (CSII) for insulin-dependent type 1 and 2 diabetes for up to 3.5 days (84 hours). Additionally, the device eliminates the need for a separate controller since users can control it using their smartphones.

According to the court documents from the U.S. District Court of Massachusetts, Judge Dennis Saylor issued a preliminary injunction against EOFlow on Oct. 6.

The preliminary injunction, a judicial measure intended to prevent the sale of potentially patent-infringing products during an ongoing lawsuit, demands the claimant to convincingly demonstrate imminent and substantial damage due to patent infringement.

In response, EOFlow held a board meeting and decided to halt the sales of the EOPatch product, excluding the EOPump, which led the Korea Exchange to suspend the trading of EOFlow's stocks on the Kosdaq market.

Despite the acquisition falling through, Kim claimed that Medtronic has still shown interest in the company, with Medtronic conveying that they will continue to closely monitor the situation between EOFlow and Insulet even after the contract's termination.

Regarding the ongoing legal dispute with Insulet, Kim stressed that there are many legal discrepancies in the injunction itself, and the company's lawyers believe that it has an absolute advantage in the appellate court, which mainly reviews legal principles, with three federal judges well-versed in the law.

"The company is not just waiting for victory in this injunction but has prepared multiple contingency plans and expects to disclose more detailed progress at the appropriate time," he said.

Medtronic Korea was unavailable for immediate comments.

Meanwhile, as a result of the acquisition deal falling through, EOFlow said that it has withdrawn the third-party allocation paid-in capital increase of 314.9 billion won ($239.3 million), due to the non-fulfillment of the public offering by Medtronic Korea Holdings.

Medtronic had agreed to participate in the paid-in capital increase conducted by EOFlow, while also agreeing to purchase the shares held by CEO Kim for 169.2 billion won in May.

Following this, Medtronic planned to delist the company by conducting a public offering for all issued shares at 30,000 won per share.

When combined, the total transaction size was expected to reach 971 billion won.