Nestlé Buys Biopharma Maker Of Peanut-Allergy Treatment -- WSJ
September 01 2020 - 3:02AM
Dow Jones News
By Olivia Bugault
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 1, 2020).
Nestlé SA said it agreed to buy Aimmune Therapeutics Inc., a
biopharmaceutical company that earlier this year won approval for
the first treatment for peanut allergies, in a deal valuing the
company at $2.6 billion, including debt.
Nestlé previously had a large stake in Aimmune, based in
Brisbane, Calif. The agreement to buy the rest of the company bulks
up the Switzerland-based packaged-food giant's decades-old
health-science unit. It also adds a potential blockbuster
prescription medication to its portfolio, amid a three-year
shake-up at the maker of Nespresso coffee and Purina pet food
engineered by Chief Executive Mark Schneider, a former health-care
executive.
Over decades, Nestlé has built a large health-science business
focused mostly on dietary management. That unit has long been
overshadowed by its better-known food and consumer-goods lines. Mr.
Schneider, who took the reins in 2017, has refocused the company on
higher-growth businesses, initially under pressure from activist
investor Daniel Loeb. He has pushed Nestlé further into coffee, for
instance, and abandoned skin care. More recently, Nestlé has said
it is reviewing options for much of its bottled-water business.
In 2016, Nestlé made its first investment in Aimmune, eventually
building a stake of more than 25%. Nestlé said Monday it would pay
$34.50 a share for the rest of the company, representing a 174%
premium to its closing price Friday.
Nestlé said the deal, which is expected to close in the fourth
quarter and will be financed by cash, will add to Nestlé's organic
growth by next year and contribute to cash earnings as early as the
following year.
Aimmune's Palforzia is the first -- and so far only -- treatment
approved by the Food and Drug Administration to help reduce the
frequency and severity of allergic reaction to peanuts, including
anaphylaxis, in children aged 4 through 17.
The drug, derived from peanut powder, works by exposing patients
to the substance they have been taught to avoid. Children
prescribed the drug take escalating doses, mixed with other foods,
to build up resistance. In January, when the drug was approved,
Aimmune said its list price would be $890 a month, or about $10,680
a year. Analysts have said it could have annual sales of $1 billion
later this decade.
The treatment isn't intended to allow allergic patients to begin
eating peanuts, but rather to reduce the risk of reactions after
accidental exposures. Children who take the new therapy are still
advised to keep avoiding peanuts and maintain access to emergency
epinephrine shots, such as EpiPen, in case of reactions.
Peanuts are among the most common foods that trigger allergies.
A 2017 study estimated peanut-allergy prevalence had increased 21%
since 2010, and that it affected nearly 2.5% of American children.
In people who are allergic, peanuts can cause gastrointestinal
problems and anaphylactic shock, a potentially deadly reaction.
Write to Olivia Bugault at olivia.bugault@wsj.com
(END) Dow Jones Newswires
September 01, 2020 02:47 ET (06:47 GMT)
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