What changed in this filing

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Item 1. Business

2025-11-25 compared with 2024-12-11 · 39 added, 59 removed, 86 unchanged (53% of the section changed)

Embecta Corp.

(also referred to herein as "Embecta") was formed through a spin-off of the diabetes care business (the "Separation") from Becton, Dickinson and Company ("BD").

(also referred to herein as "Embecta") is a leading global medical device company, primarily focused on providing solutions to improve the health and well-being of people living with diabetes.

All references in this Form 10-K to "Embecta", "the Company", "we", "our" or "us" refer to Embecta Corp., a Delaware corporation, and its subsidiaries, unless otherwise indicated by the context.

On April 1, 2022 (the "Separation Date"), Embecta and BD entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement").

Pursuant to the Separation and Distribution Agreement, BD agreed to spin off its diabetes care business ("Diabetes Care Business") into Embecta, a new, publicly traded company.

We are a leading global medical device company focused on providing solutions to improve the health and well-being of people living with diabetes.

Building on our 100-year centennial, we believe that our products have become one of the most widely recognized and respected brands in diabetes management throughout the world.

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We face competition and innovation from both new and existing companies pursuing new delivery devices, injection technologies, drugs, and therapeutics for the treatment of diabetes.

Companies with whom we currently compete in the diabetes drug injection business include Novo Nordisk, HTL-Strefa, and Terumo Medical Corporation.

Companies with whom we currently compete in the diabetes drug injection business include Novo Nordisk, MTD Group, and Terumo Medical Corporation.

We also compete with providers of insulin pumps and other insulin administration devices.

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We purchase most of these and other materials from a single or limited number of sources for various reasons, including quality assurance, cost-effectiveness, and continuity of supply, among others.

In connection with the Separation, we entered into a cannula supply agreement with BD, whereby BD sells to us cannulas for incorporation into our pen needles and syringes.

Subsequent to the Separation, BD retained ownership of all cannula production activities and the associated intellectual property rights of BD and its subsidiaries relating to cannula, the manufacture thereof and other critical cannula-related technology.

In connection with our separation from Becton, Dickinson and Company ("BD") in 2022 (the “Separation”), we entered into a cannula supply agreement with BD, whereby BD sells to us cannulas for incorporation into our pen needles and syringes.

BD retained ownership of all cannula production activities and the associated intellectual property rights of BD and its subsidiaries relating to cannula, the manufacture thereof and other critical cannula-related technology.

The design and formulation of certain materials and components is proprietary and the intellectual property rights may be owned exclusively by one party.

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Our strategy seeks to update and develop enhanced technology for our portfolio of current and future products by focusing on patient unmet needs and market expansion.

On November 22, 2024, the Company's Board of Directors approved a plan to discontinue internal and external investment in the research and development of its patch pump program.

The Company will refocus its research and development strategy on its core business.

We are also exploring the development of products that allow us to expand our portfolio outside of diabetes.

For example, we intend to work on development of new products in category and patient adjacencies, such as drug delivery and chronic care, that leverage our manufacturing and channel expertise.

Intellectual Property and Licenses

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We are not aware of any pending third-party claims or challenges that would be expected to materially affect the patent protection of these products or technologies.

As of September 30, 2024, we held about 670 patents in the United States and in various foreign countries in which we conduct business, as well as about 50 patents pending protecting our core injection business.

As of September 30, 2025, we held about 655 patents in the United States and in various foreign countries in which we conduct business, as well as about 45 patent applications pending worldwide, protecting our core injection business.

The majority of our United States and foreign patents for individual products are in force for twenty years from the initial filing date.

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Embecta owns, and BD provides Embecta a license to use, intellectual property rights necessary to operate our business.

BD grants Embecta a license to use such intellectual property rights on the terms and conditions set forth in an intellectual property matters agreement, which are described under “Agreements Related to the Separation.”

Changes in legislation or government policies, including with respect to licensing, health information privacy and data privacy and healthcare costs, reimbursement, coverage and access, can have a material impact on our worldwide operations.

Our operations are subject to, and affected by, regulations of medical devices promulgated by federal, state and local authorities in the United States, including the U.S.

Food and Drug Administration ("FDA"), and other regulatory authorities with jurisdiction over our foreign operations.

FDA regulations govern, among other things, product design and development, preclinical and clinical testing, pre-market clearance and approval, manufacturing, labeling, product storage, advertising and promotion, sales and distribution, post-market adverse event reporting, postmarket surveillance, complaint handling, repair or recall of products and record keeping.

Our products and operations are subject to, and affected by, regulations of medical devices and drugs promulgated by federal, state and local authorities in the United States, including the U.S.

Food and Drug Administration ("FDA"), other national regulatory agencies, and foreign regulatory authorities with jurisdiction over our foreign operations.

FDA and other regulations govern, among other things, product design and development, preclinical and clinical testing, pre-market clearance and approval, manufacturing, labeling, product storage, supply chain, global trade, advertising and promotion, sales and distribution, pricing and reimbursement, sampling, quality control, post-market adverse event reporting, postmarket surveillance, complaint handling, repair or recall of products, record keeping, storage, and disposal activities.

These regulations not only affect products in our existing markets, but also our ability to market new products under development.

For existing and potential new products, failure to comply with ongoing regulatory requirements can result in enforcement actions by the FDA and other regulatory agencies, which may include warning letters that require corrective action, fines, injunctions, rescissions of previously granted clearances and/or approvals and other penalties.

We maintain robust FDA Quality System Regulation and ISO Quality Systems that establish standards for our product design, manufacturing, and distribution processes, inclusive of Current Good Manufacturing Practices.

Additionally, changes in legislation or government policies, including with respect to licensing, health information, privacy and data privacy, security, cybersecurity, healthcare costs, protection of the confidentiality of certain personal information (including patient health information, financial information and other sensitive personal information), reimbursement, coverage and access, can substantially increase the time, difficulty, and costs incurred in developing, maintaining, and obtaining market clearance or approval, and marketing newly developed or existing products, and can have a material impact on our worldwide operations.

We maintain robust FDA Quality System Regulation and ISO Quality Systems that establish standards for our product design, manufacturing, testing, recording keeping, and distribution processes, inclusive of Current Good Manufacturing Practices.

The FDA and other regulatory agencies engage in periodic reviews and inspections of our quality systems, as well as product performance and advertising and promotional materials.

As a medical device manufacturer and distributor, our manufacturing facilities and the facilities of our suppliers are subject to periodic inspection by the FDA, certain corresponding state agencies, and other regulatory bodies.

Prior to marketing or selling most of our products, we must secure clearance or approval from the FDA and counterpart non-United States regulatory agencies.

These regulatory controls, as well as any changes in agency policies, can affect the time and cost associated with the development, introduction and continued availability of new and existing products.

Where possible, we anticipate these factors in product development and planning processes.

agencies possess the authority to take various administrative and legal actions against us, such as product recalls, product seizures and other civil and criminal sanctions.

Where possible, we anticipate these

factors in product development and planning processes.

These agencies possess the authority to take various administrative and legal actions against us, such as product recalls, product seizures and other civil and criminal sanctions.

International sales of our products are subject to foreign government regulations, which may vary substantially from country to country.

The time required to obtain clearance or approval by a foreign regulatory authority may be longer or shorter than that required for FDA clearance or approval, and the requirements may differ significantly, particularly outside of the European Union, Canada and other industrialized countries.

The European Union has adopted various regulations and directives regulating the design, development, clinical trials, manufacture, labeling, and adverse event reporting, among other things, for medical devices, including the EU Medical Device Regulation.

Assessing conformity with the various regulations and directives depends on the class of product, usually including scrutiny and audit by a third-party “Notified Body” which is required for a manufacturer to commercially distribute the product throughout the European Union and affix the mandatory conforming marking, otherwise known as the CE mark, to their medical devices.

In addition, other jurisdictions continue to update requirements for marketing and sale of products in their geography, often becoming more stringent.

As we operate in other regions and continue to expand into emerging markets, new requirements may require updates to our quality management system.

As we operate in other regions and continue to expand into emerging markets, new requirements may require updates to our quality management system and operations.

These global changes are monitored and reviewed as part of the overall quality lifecycle.

For further discussion of risks related to government regulations, see “ Risk Factors ” in Item 1A.

Agreements Related to the Separation

In connection with the Separation, the Company entered into the Separation and Distribution Agreement, which contains provisions that, among other things, relate to (i) assets, liabilities and contracts to be transferred, assumed and assigned to each of Embecta and BD (including certain deferred assets and liabilities) as part of the Separation, (ii) cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of Embecta's business with Embecta and financial responsibility for the obligations and liabilities of BD’s remaining businesses with BD, (iii) procedures with respect to claims subject to indemnification and related matters, (iv) the allocation among Embecta and BD of rights and obligations under existing insurance policies with respect to occurrences prior to completion of the Separation, as well as the right to proceeds and the obligation to incur certain deductibles under certain insurance policies, and (v) procedures governing Embecta’s and BD’s obligations and allocations of liabilities with respect to ongoing litigation matters that may implicate each of BD’s business and Embecta’s business.

Agreements that Embecta entered into with BD that govern aspects of Embecta's relationship with BD following the Separation include, but are not limited to:

• Transition Services Agreements ("TSA") - Pursuant to the TSA, as amended, and the related Logistics Services Agreement, as amended (“LSA”), Embecta and BD and their respective affiliates provide each other, on an interim, transitional basis, various services, including, but not limited to, information technology, procurement, quality and regulatory affairs, medical affairs, tax and treasury services, distribution logistics, and shared services infrastructure support for order-to-cash, source-to-pay, and record-to-report (collectively, the “Interim Business Continuity Processes”).

The agreed-upon charges for such services are generally intended to allow the servicing party to charge a price comprised of out-of-pocket costs and expenses and a predetermined profit in the form of a mark-up of such out-of-pocket costs and expenses.

Such services provided pursuant to the TSA were to terminate no later than April 1, 2024, 24 months following the Separation, and such services provided pursuant to the LSA were to terminate no later than January 1, 2024, which BD had agreed to extend through March 31, 2024.

On March 28, 2024, BD granted a limited extension until November 1, 2024 of certain services under the TSA, LSA and other transaction documents in a limited set of markets (the "Extension") to support the Interim Business Continuity Processes.

• Distribution Agreements - Embecta and BD entered into distribution agreements for certain territories, principally in the Asia Pacific Region and Latin America, whereby a subsidiary of BD was appointed as a distributor of Embecta or its relevant subsidiaries to support certain commercial operations of the diabetes care business on a transitional basis in these regions for a maximum of two years.

The distribution agreements each continued until either (1) certain governmental approvals needed to distribute products in the defined territory were obtained and order-to-cash processes and other services of the Company for such territory were migrated to an alternative commercial arrangement between the parties or (2) the applicable services were transitioned to a third-party distributor or independently performed by Embecta, but in any event no longer than the maximum term of two years, except certain such agreements may be extended in connection with the Extension.

All distribution agreements in the Asia Pacific Region and Latin America terminated and expired in October 2024.

Embecta paid BD a return of 1.5% to 2.0% of net revenue for each territory.

• Cannula Supply Agreement - Embecta and BD entered into a cannula supply agreement whereby BD sells to Embecta cannulas for incorporation into Embecta's existing syringes and pen needles, safety syringes and safety pen needles, and products currently under development.

BD retains ownership of all cannula technology, cannula production activities and the intellectual property rights therein.

Embecta is limited to a maximum number of cannulas that it can purchase under the cannula supply agreement, which will be an absolute upper limit of cannulas per year and yearly limits that vary with annual demand.

The cannula supply agreement is terminable by Embecta without cause by providing at least 36 months’ written notice;

however, such termination can be effective no earlier than five years from the Separation.

The cannula supply agreement will be terminable by BD without cause by providing at least 36 months’ written notice;

however, such termination can be effective no earlier than ten years from the Separation.

However, in the event of a change of control of Embecta, BD has the

right to terminate the cannula supply agreement in its sole discretion.

The cannula supply agreement will also terminate automatically, subject to a 36-month wind-down period, if Embecta’s yearly forecast is below the required minimum purchase amount, and the parties have other customary termination rights for material breach or bankruptcy of the other party.

• Tax Matters Agreement - Pursuant to the tax matters agreement, Embecta agreed to certain covenants that contain restrictions intended to preserve the tax-free status of the distribution and certain related transactions.

Embecta may take certain actions prohibited by these covenants only if Embecta obtains and provides to BD an opinion from a United States tax counsel or accountant of recognized national standing, in either case satisfactory to BD, to the effect that such action would not jeopardize the tax-free status of the distribution and certain related transactions, or if Embecta obtains prior written consent of BD.

Embecta is barred from taking any action, or failing to take any action, where such action or failure to act adversely affects or could reasonably be expected to adversely affect the tax-free status of the distribution and certain related transactions or result in certain other taxes to BD, for all relevant time periods.

• Logistics Services Agreement - Embecta and BD entered into the LSA whereby BD provides Embecta with certain order-to-cash and logistics services to support certain commercial operations for a maximum term of two years, which BD had agreed to extend pursuant to the Extension.

Embecta pays BD (i) reimbursable costs, including all shipping costs, selling costs, general administration costs, costs of goods, research and development services costs, and other income and expenses related solely to the diabetes care business, that are incurred by BD directly, as allocated costs or as costs payable to a third party and (ii) a monthly administrative fee of 1.0% of net revenue (which increased to 1.25% of net revenue after January 1, 2024).

• Other agreements that Embecta entered into with BD include, but are not limited to, an employee matters agreement, an intellectual property matters agreement, local support services agreements, certain other manufacturing arrangements and a process services agreement and lease agreement for a manufacturing facility location in Holdrege, Nebraska.

Spinoff from BD

On April 1, 202 2 (the "Separation Date"), in connection with the Separation, Embecta and BD entered into a Separation and Distribution Agreement (the "Separation and Distribution Agreement").

Pursuant to the Separation and Distribution Agreement, BD agreed to spin off its diabetes care business ("Diabetes Care Business") into Embecta, a new, publicly traded company.

In addition, in connection with the Separation the Company entered into a Transition Services Agreement, as amended ("TSA"), distribution agreements, a Cannula Supply Agreement, a Tax Matters Agreement, the Logistics Services Agreement, as amended ("LSA"), Trade Receivables Factoring Agreements, an Intellectual Property Matters Agreement, local support services agreements, certain other manufacturing arrangements and process services agreement, and a lease agreement for a manufacturing facility located in Holdrege, Nebraska.

The TSA and the LSA have expired.

In addition, the Trade Receivables Factoring Agreements have terminated and expired as a result of the Company's implementation and onboarding of certain systems and services, including, but not limited to, information technology, procurement, quality and regulatory affairs, medical affairs, tax and treasury services, distribution logistics, and shared services infrastructure support for order-to-cash, source-to-pay, and record-to-report, which, for clarity, includes enterprise resource planning (“ERP”) systems (“Business Continuity Processes”).

Furthermore, all distribution agreements in the Asia Pacific Region and Latin America terminated and expired.

These agreements are discussed in greater detail in Note 3 “Third Party Arrangements” and Note 18 “Leases” in the notes to our Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.

Human Resources ("HR")

As of September 30, 2024, we had approximately 2,100 regular employees globally (which includes deferred closing countries), with approximately 900 employees in the United States.

As of September 30, 2025, we had approximately 1,850 regular employees globally, with approximately 700 employees in the United States.

Our talented employees are an integral reason for our standing as one of the world's leading diabetes care companies.

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We focus on providing a personalized experience from the moment an employee considers joining the Embecta team.

In addition to helping make life better for people living with diabetes, our employee value proposition includes a strong rewards package, a focus on development, and engaging with our employees as we shape our new company together.

At Embecta, our Total Rewards programs enable behaviors that drive performance, reward results and create long-term value for our stockholders and employees.

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We are building a learning culture where employees at all levels of the organization are encouraged to grow and improve, including company-wide training on compliance, job related technical training, leadership development, and easy access to virtual on demand learning.

At Embecta, long term succession planning and capability building are integral to our talent practices that are aimed at helping our employees be the best versions of themselves while simultaneously building our future talent pipeline.

future talent pipeline.

All employees are encouraged to establish individual, team and development goals in partnership with their manager to ensure clarity and alignment to our business goals while retaining focus on growth and development.

In alignment with our continuous improvement culture, we seek feedback through surveys and other means so that employees can share their perspectives on ways to continuously improve our workplace climate.

As a newly independent company with agility at its core, employee feedback helps us make adjustments in our ways of working and embedding our values.

As a company with agility at its core, employee feedback helps us make adjustments in our ways of working and embedding our values.

What we do at Embecta is personal to Embecta employees, and our HR practices are designed to enable our employees in fulfilling our mission of helping people with diabetes.

Diversity, Equity & Inclusion

Embecta engages a workforce that reflects the communities where we operate.

Our workforce, including our leadership team, and our Board of Directors, includes diverse members and teams.

Our commitment to Diversity, Equity & Inclusion is embedded in our values.

We believe that employee diversity makes us better at identifying opportunities and solving problems.

Equity & Inclusion

Embecta engages a workforce, including our leadership team and our Board of Directors, that reflects the communities where we operate.

Our commitment to Equity & Inclusion is embedded in our values and we believe this makes us better at identifying opportunities and solving problems.

We are committed to creating and sustaining an environment where everyone brings their authentic selves to work, to help us fulfill our mission of helping people with diabetes.

Corporate Responsibility ("CR") and Environmental, Social and Governance ("ESG")

Embecta has continued to stand up a standalone multi-year strategy to advance its ESG initiatives.

Embecta is in the middle of a multi-year strategy to advance its ESG initiatives.

The focus in fiscal year 2025 was to evaluate Embecta’s global ESG risks and impacts.

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Separately, the governance structures for managing ESG topics and updates were documented via the Company's Enterprise Risk Committee charter.

Embecta plans to provide an updated Sustainability Report during its 2025 fiscal year.

Embecta provided a Sustainability Report during Fiscal Year 2025 and plans to provide an updated Sustainability Report during its 2026 fiscal year.

Available Information

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Embecta may use this website as a means of disclosing material, non-public information and for complying with its disclosure obligations under Regulation FD adopted by the SEC.

Our website and the information contained therein or connected thereto shall not be deemed to be incorporated into this Annual Report.

Our website and the information contained therein or connected thereto shall not be deemed to be incorporated into this Annual Report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business