for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Health

Nestle gets peanut allergy treatment with $2 billion Aimmune buyout

(Reuters) - Nestle NESN.S will pay $2 billion to buy the remaining stake in Aimmune Therapeutics Inc AIMT.O, gaining full ownership of the first U.S.-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%, at $2.6 billion.

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

The U.S. 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 U.S. 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,” 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.

Slideshow ( 2 images )

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

The unit was on track to more than double sales by 2022, from 2 billion Swiss francs ($2.21 billion) in 2014, and was expected to close 2020 at 3.3 billion francs, Behar added.

($1 = 0.9035 Swiss francs)

Reporting by Silke Koltrowitz in Zurich and Manas Mishra in Bengaluru; Editing by John Miller, Alexander Smith and Shounak Dasgupta

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up