Nestle Bets $2.6 Billion on Aimmune’s Peanut Allergy Treatment

(Bloomberg) -- Nestle SA agreed to buy Aimmune Therapeutics Inc. for $2.6 billion, adding a promising peanut allergy treatment to its portfolio of coffee, snacks and water.

The Swiss owner of Nespresso will pay $34.50 a share for the U.S. biotech firm, almost triple its last closing price. Aimmune makes a therapy to help reduce allergic reactions to peanuts in children and teens by exposing them to tiny doses over time.

The deal is Nestle’s biggest push yet into health science. Chief Executive Officer Mark Schneider has stoked Nestle’s interest in the field while shedding slower-growing businesses in areas such as bottled water and sweets.

The deal is a “significant milestone in Nestle Health Science,” said Jean-Philippe Bertschy, an analyst at Bank Vontobel in Zurich. “Nestle has been very vocal lately in its intention to strengthen its position with acquisitions.”

Aimmune’s treatment, called Palforzia, exposes patients to small doses of peanut protein and won approval from the U.S. Food and Drug Administration in February. Analysts estimate its revenue may exceed $1 billion in 2025.

Including a 26% stake that Nestle’s health-science arm already holds in Aimmune, the deal’s enterprise value is $2.6 billion, according to Nestle. The value excluding that stake is almost $2 billion including cash on hand and the future purchase of shares that have yet to vest, Nestle said. The stock rose as much as 0.9% in Zurich trading after the deal was announced.

Health Effort

The Vevey, Switzerland-based food giant has been dabbling in health-science for more than two decades with mixed results. No blockbuster has emerged from its labs and revenue trails behind the potential of 10 billion francs ($11 billion) forecast by Chairman Paul Bulcke about a decade ago.

The company acquired Canadian supplements maker Atrium Innovations three years ago in a $2.3 billion deal. It also has shed some medical assets, for instance with the sale of Prometheus Laboratories Inc., a developer of personalized treatments for cancer and gastrointestinal illnesses.

Nestle has had a research partnership with Aimmune for five years and first bought shares in the company in 2016. It has been working on the acquisition for three months, Greg Behar, head of its health-science unit, said in an interview.

The agreed price is 7% below Aimmune’s 52-week high, and Covid-19 has had a big impact on the business, which began selling Palforzia just as the U.S. was entering lockdowns, according to Behar. He estimates the treatment will exceed $1 billion in revenue within five to six years. The board of Aimmune unanimously backed the deal, he said.

More Takeovers

Aimmune competes with DBV Technologies SA, a French company that has failed to win regulatory approval for a rival product.

Amid a slowdown in its traditional markets, Nestle has also focused on expansion in coffee, splashing out $7.2 billion on the right to market Starbucks products, including coffee capsules for the Nespresso system.

Schneider has said he is keen to buy more companies after selling Nestle’s U.S. confectionery operations and placing its U.S. ice cream business in a joint venture with private equity firm PAI Partners. Nestle’s cash pile was bolstered by last year’s sale of a $10 billion dermatology business.

Nestle said it expects the Aimmune deal, which will be financed with cash on hand, to close in the fourth quarter.

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