[Edaily Reporter NA EUN-KYUNG ] i-SENS, Inc.(099190)was unable to avoid a sharp drop in its stock price despite achieving record quarterly revenue in its continuous glucose monitoring (CGM) business. This is because, while its earnings met expectations, the business outlook for next year has actually become more uncertain. Contrary to expectations—based on a supply agreement signed earlier this year with LifeScan, a global blood glucose meter company—that 2027 CGM sales would more than double compared to this year, the company has yet to provide specific details on next year’s supply volume or sales targets as the year draws to a close.

i-SENS, Inc.’s stock price fell 7.79% on the 4th and 12.76% on the 5th, followed by a 13.00% drop on the 6th. With the stock price falling consecutively since the third-quarter earnings announcement, it dropped from a closing price of 17,590 won on the 3rd to 12,310 won on the 6th. This represents a sharp plunge of 30.02% in just three trading days.

This is all the more puzzling given that the third-quarter earnings announced on the 4th were solid. i-SENS, Inc.’s third-quarter consolidated revenue reached 86.5 billion won, a 9.8% increase year-over-year, while operating profit rose 314.1% to 3.8 billion won. In particular, CGM revenue hit 10.4 billion won, an 82.4% increase compared to the same period last year. This marks the first time CGM revenue has exceeded 10 billion won in a single quarter, demonstrating that i-SENS, Inc. is successfully transitioning to CGM—which the company has identified as its next-generation growth engine following blood glucose monitors (BGMs). Nevertheless, the continued decline in the stock price is believed to stem from the company’s failure to provide specific projections regarding its CGM supply contract with LifeScan.

Expectations for

a Twofold Increase in Sales Next Year… But LifeScan Volume Still Undecided

Market expectations for the CGM business

next year

were largely influenced by the company’s aggressive growth projections at the beginning of the year. Last February, i-SENS, Inc. signed a CGM supply contract with U.S.-based LifeScan, a leader in the global BGM market, and during the earnings call held immediately afterward, the company stated that it expected CGM revenue in 2027 to more than double compared to this year. Given that this year’s CGM revenue target was 40 billion won, the company was confident of generating over 80 billion won in revenue next year.

At the time, the company emphasized the potential for market expansion by leveraging LifeScan’s global distribution network. While noting that the contract did not specify a fixed supply amount or guarantee a minimum order quantity (MoQ), the company stated that, based on assumptions regarding market penetration rates, it could generate total revenue of 500 billion to 700 billion won over four years through LifeScan. It also stated that even excluding the supply volume to LifeScan, it would be able to achieve this year’s CGM revenue target of 40 billion won.

However, the fact that specific supply volumes have not yet been finalized—even with less than two months remaining until 2027—is fueling market concerns. In response to a query from Edaily regarding this matter, a representative of i-SENS, Inc. stated, “We will provide an update on the 2027 LifeScan supply volume as soon as it is finalized,” adding, “We are also reviewing the 2027 CGM sales target as part of our internal business planning process. Since discussions regarding supply volumes with distributors and partners are currently underway, we will announce specific figures at an appropriate time once they are finalized.”

The official also noted that LifeScan’s supply volume is a key variable in setting next year’s CGM sales target. “We plan to finalize the (next year’s CGM sales target) plan by reflecting the results of our discussions with LifeScan,” the official said. Furthermore, the official added, “The OneTouch Vita, a PL product to be supplied to LifeScan in the fourth quarter, is an initial shipment intended for testing and pre-marketing purposes.” Contrary to market expectations, this year’s supply volume is expected to be limited to testing and pre-marketing purposes; therefore, CGM sales to LifeScan are projected to gain momentum only after the European launch next year.

As recently as last February, the company had expected to see tangible sales results from its contract with LifeScan within the year. However, LifeScan’s financial situation and management changes appear to have contributed to slower-than-expected business progress. Last December, LifeScan completed Chapter 11 bankruptcy proceedings in the U.S. and carried out a large-scale debt restructuring that reduced more than 75% of its existing debt. However, the structural slowdown in growth of its flagship BGM business persists. Earlier this year, global credit rating agency Fitch assigned LifeScan a credit rating of “B-” with a “negative” outlook, citing declining revenue from existing businesses and the cost burden associated with entering the new CGM market as major risk factors.

While LifeScan needs to offset the slowdown in its existing business by entering the CGM market, it is in a situation where it cannot invest unlimited funds into the new venture. Consequently, it is likely that the company adopted a strategy of gradually increasing order volumes while monitoring actual sales performance, rather than purchasing large quantities of products from the outset of its European launch. The absence of a minimum order quantity clause in the contract with i-SENS, Inc. is another factor enabling this flexible ordering approach.

The change in LifeScan’s CEO last May is another variable. Given that new shareholders and management took over following a restructuring process, it is speculated that the finalization of the CGM supply plan may have been delayed while existing business plans and investment priorities were being reviewed.

Multi-Private Label Strategy Also Takes a “Step Back”… Time Needed to Expand Sales in Europe

A shift in sentiment is also evident in the company’s response regarding additional private label (PL) contracts. During its earnings conference call last April, i-SENS, Inc. stated, “We are discussing additional collaborations with companies on a scale comparable to or larger than LifeScan.” However, in response to a recent inquiry from Edaily, the company replied, “We are currently focused on fulfilling our supply obligations to LifeScan,” adding, “We are reviewing potential private label (PL) collaborations with additional partners in line with regulatory approvals, production, and launch schedules, but no specific details have been discussed at this time.”

Although LifeScan indicated during the conference call that it was interested in distributing not only the CareSense Air 1—the subject of the current contract—but also its successor, the CareSense Air 2, in the U.S., the company made it clear to Edaily that no concrete discussions have taken place regarding this matter yet. i-SENS, Inc. told Edaily, “We plan to focus first on U.S. clinical trials and the approval process while simultaneously exploring potential partnerships in the future; no specific collaboration methods, including whether to expand existing contracts, have been determined.”

The trend in overseas CGM sales is also worth examining. Third-quarter overseas CGM sales totaled 4.9 billion won, a 16.3% decrease from the previous quarter’s 5.8 billion won. The rise in CGM sales was largely driven by an increase in domestic sales (5.5 billion won), fueled by promotional efforts and expanded supply to hospitals and clinics.

In Europe, the process of translating CGM’s inclusion in insurance coverage into actual prescription growth is taking time. According to the company, in the UK, even after CGM is listed on the National Health Service (NHS), it must be additionally listed on the prescription lists of local healthcare institutions. In Germany and Belgium as well, separate procedures are required for CGM to be covered by insurance.

Of course, the company has achieved some business successes. Its next-generation product, CareSense Air 2, has obtained European CE certification, and the existing Air 1 has also secured approval for use by children and adolescents. Cumulative CGM sales for the first three quarters of this year reached 28.2 billion won, already surpassing last year’s annual sales.

The key challenge moving forward is determining when product competitiveness and the expansion of overseas distribution networks will translate into actual order growth. Additionally, securing approximately 30 billion won in funding for next year’s U.S. Food and Drug Administration (FDA) Phase 3 clinical trial remains a challenge.

An i-SENS, Inc. official stated, “The approximately 30 billion won required for the U.S. confirmatory clinical trial is an estimate at this point and may change once the clinical trial design is finalized,” adding, “We plan to cover the related costs using our cash reserves, operating cash flow, and loans from financial institutions.”