Nestle, on health kick, moves into milk allergy testing

Tue May 31, 2016 8:55am EDT
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By Ben Hirschler

LONDON (Reuters) - Nestle (NESN.S: Quote), the world's biggest food company, is stepping up its push into medicine with a global deal worth up to 100 million euros ($111 million) to develop and market an experimental milk allergy test for infants.

The Swiss group will pay DBV Technologies (DBV.PA: Quote) 10 million euros upfront for rights to its skin patch test for cow’s milk protein allergy (CMPA), with the balance depending on successful development, the two companies said on Tuesday.

Shares in the French biotech company rose 5 percent on the news.

The deal underscores Nestle's ambitions for its Health Science division, which it believes could eventually generate more than 10 billion Swiss francs ($10 billion) in annual sales.

It also complements the company's market-leading infant formula business and could help lift sales of products designed for babies with food intolerance.

Nestle has signed a series of similar deals with other small companies in its bid to create a new kind business that is midway between food and pharmaceuticals. The goal is to find new ways to treat, diagnose and prevent a range of diseases, from gastrointestinal problems to Alzheimer's.

CMPA affects up to 2 or 3 percent of infants and toddlers, according to the companies. Many others, however, have symptoms suggestive of the condition, creating a need for a simple diagnostic test.

Under the terms of the agreement, DBV will be eligible to receive up to 90 million euros in development, regulatory and commercial milestones - on top of the upfront payment - and will also collect royalties on eventual product sales.   Continued...

The Nestle logo is pictured on the company headquarters building in Vevey, Switzerland February 18, 2016. REUTERS/Pierre Albouy