Nestle gets peanut allergy treatment with US$2b Aimmune buyout

[ZURICH] Nestle will pay US$2 billion to buy the remaining stake in Aimmune Therapeutics, gaining full ownership of the first US-approved peanut allergy treatment which has struggled with a slow launch due to the Covid-19 pandemic.

Nestle said on Monday its offer for Aimmune values the California-based drugmaker, in which it already has a stake of around 25.6 per cent, at US$2.6 billion.

Aimmune's shares more than doubled on Monday, just shy of Nestle's offer price of US$34.50 per share.

The US company's shares have slumped this year, as the pandemic led to many clinician's offices remaining shut, leading to a slow launch of its therapy, Palforzia, which was approved in January.

Shares "started 2020 right about at this level before the pandemic, and resultant shut-down of allergy clinics across the US essentially killed the launch of Palforzia," Piper Sandler analyst Christopher Raymond said.

"As pandemic-related disruption recedes and Palforzia's true demand begins to manifest, it will be deemed that Nestle got itself a bargain here," Mr Raymond added.

Peanut allergies are prevalent in an estimated 1.6 million teens and children in the United States alone, making it a lucrative market that could eventually help Aimmune bring in billions of dollars in sales.

The deal helps Nestle, known for its KitKat chocolate bars and Nescafe instant coffee, expand its Nestle Health Science division which it set up in 2011 to open up a new area of business.

With Nestle's prior investment of US$473 million, it would be making a cash payment of just under US$2 billion, Nestle Health head Greg Behar told Reuters.

The unit was on track to more than double sales by 2022, from two billion Swiss francs (S$3 billion) in 2014, and was expected to close 2020 at 3.3 billion francs, Mr Behar added.

REUTERS