Burgdorf – Ypsomed (SWX: YPSN) has reached an agreement in its legal dispute with Insulet Corp. (NASDAQ: PODD). Insulet acknowledges the contractually agreed fee and compensates Ypsomed for the termination of the cooperation with an additional USD 36.15 million. The total compensation thus amounts to USD 41.25 million. At the same time, Insulet drops its counterclaim of USD 18.7 million.
From 2010 to 2018, Ypsomed was the exclusive distributor for the mylife Omnipodpatch pump in Europe. This cooperation could not be extended and was terminated on 30 June 2018. During the time of cooperation, Ypsomed had successfully established the therapy with the insulin patch pump in Europe and partly gained over 20 percent market share in its markets. The agreement with Insulet is a recognition of Ypsomed's performance, which had established the entire distribution structure for the Omnipod in Europe.
CHF 1.00 per share as additional dividend contribution
Ypsomed is consistently working on the strategic development and focusing of its portfolio. The agreement on the additional compensation of USD 36.15 million allows Ypsomed to reduce risks, increase cash flow in the current business year and thus contribute to a reduction in debt. As announced, in line with a sustainable dividend policy, a certain ratio of the compensation will be proposed as an additional dividend contribution in the amount of CHF 1.00 per share for the 2020/21 financial year. This corresponds to an additional distribution of CHF 12.6 million.
"We were always convinced that our request was justified. Strategically, we were able to adapt rapidly to the new situation. Now, we can focus our operational attention on our growth initiatives in the injection and infusion business,"
Simon Michel, CEO Ypsomed, comments his satisfaction with the agreement reached with Insulet.
The outstanding receivables from Insulet was reported in the balance sheet at CHF 42.6 million as of 30 September 2020, adjusted for currency effects. Ypsomed is therefore posting a one-time, extraordinary impairment of around CHF 9 million at EBIT level in the 2020/21 financial statements, which has no effect on cash flow. For the 2020/21 financial year, Ypsomed continues to expect slight growth in sales and further growth of operating profit from core operating activities.