Nestlé reconsiders peanut allergy program two years after $2.6B buyout
It seems Nestlé is experiencing some buyer’s remorse two years after throwing down $2.6 billion for Aimmune Therapeutics and its peanut allergy pill Palforzia.
CEO Mark Schneider announced on Tuesday that Nestlé is “exploring strategic options” for Palforzia following lower-than-expected demand. A company spokesperson declined to confirm whether a potential sale is in consideration.
“The review is expected to be completed in the first half of 2023. Going forward, Nestlé Health Science will sharpen its focus on Consumer Care and Medical Nutrition,” the company said in a news release.
Palforzia, essentially peanut powder in a pill, became the first FDA-approved treatment for peanut allergy back in 2020. The idea is to expose patients to small but gradually increasing amounts of peanut powder to build up resistance to the allergen. In a Phase III trial, children on Palforzia had a 67% chance of avoiding a severe reaction to 600 mg of peanut protein, or about two peanuts, compared to 4% for placebo patients.
Nestlé secured a minority stake in Aimmune back in 2017, then waited for an FDA approval before swooping in for a $2.6 billion takeover in the fall of 2020. Prior to that, the company had purchased more than $470 million worth of stock.
Despite a slow rollout, partially due to the pandemic, Schneider had high hopes for the drug. Analysts pegged sales projections of over $1 billion. However, the chief executive noted in an investor call on Tuesday that the drug has proven to be more “niche therapy” than blockbuster.
The closure of allergists’ offices in early 2020 contributed to a slow rollout, Schneider said, as well as the frequency of required doctor’s visits. While the CEO stressed that the therapy is safe, the risk of anaphylactic shock means patients must spend considerable time in a doctor’s office when escalating doses. Both patient retention and allergist adoption has been lower than expected, he added.
Meanwhile, advocates stand behind Palforzia as the “only FDA-approved therapy for the approximately 1.2 million kids with peanut allergies,” according to the Asthma and Allergy Foundation of America.
“Importantly, Palforzia is covered by many insurance plans whereas non-FDA approved therapies often have high out-of-pocket costs that limit access to those who can afford it. We hope that Palforzia continues to be an option for people and families managing food allergies,” president and CEO Kenneth Mendez told Endpoints News via email.
Nestlé’s stock $NSRGY was down about 2% on Tuesday morning, pricing around $117 per share.
This article has been updated to include comment from the Asthma and Allergy Foundation of America.