Nestlé puts $200M more behind a treatment for peanut allergy
Aimmune’s patients won’t ever be able to eat much or even most of their candy, but every time they open a capsule, they’ll be consuming a product Nestlé helped produce.
Since the immunotherapy company completed its Phase II studies, Nestlé has become one of its largest backers. They invested $145 million in 2016 and $98 million in 2018. And today, days after Aimmune won FDA approval for their peanut allergy drug Palforzia, Nestlé announced a $200 million equity investment. They will now have invested $473 million and command 19.9% of the company.
Baird’s Brian Skorney estimated that the new cash, along with their credit facility with KKR, should give Aimmune a $450 million reservoir and resolve any questions about whether they’ll have the capacity to commercialize Palforzia.
It “is more than enough to fund the launch of Palforzia and get to a point that settles the bull/bear launch debate,” he wrote in a note to investors.
Separately, Aimmune announced an exclusive, $10 million licensing agreement for Xencor’s XmAb7195, a humanized antibody designed to treat the underlying mechanisms behind allergic reaction.
Aimmune’s value has increased by over a third since Nestlé’s initial investment, in large part thanks to Palforzia’s success. The drug is no cure — patients won’t be able to eat Butterfingers, let alone Reese’s — but it’s the first thing approved to lower the risk of an extreme allergic reaction. Allergic children take a capsule with escalating amounts of peanut powder and sprinkle it on their food over the course of several months. Giving peanut powder to kids with peanut allergies can, unsurprisingly, cause substantial reactions and some patients discontinue, but at the end of a 12-month Phase III trial the results were clear: 67% of patients who received the drug could tolerate eating around 2 peanuts, versus 4% of placebo.
That data, alongside a patient population of up to 1.6 million people, led analysts to project over $1 billion in peak sales. The company has since announced a price of $10,680, more than twice what some analysts projected. Skorney expects it will still receive wide reimbursement.
Still, the drug has not evaded criticism. In addition to its side effects, critics note that Aimmune will essentially be charging over $10,000 for peanut flour that, with slight alteration, is largely identical to the flour found on supermarket shelves. Some allergists already use that, sometimes with substantial effect.
“They are just packaging up what we already do, in a gold-plated capsule,” Hugh Windom, an allergist in Sarasota, FL, told NPR last year. Other allergists say they need the standardized product and dosing regimen Palforzia provides.
Palforzia, though, may soon not be alone. DBV Technologies is developing a patch that’s expected to be less effective but also less dangerous. They withdrew their FDA submission in December of 2018 over manufacturing and quality control questions but resubmitted in August and they expect a decision this year.
An approval could put competitive pressure on Aimmune to expand their pipeline. That could lead to more deals like today’s licensing agreement with Xencor. XmAb7195 — now renamed AIMab7195 — interacts with IgE cells that can drive an immune response. Aimmune plans to test it as an adjuvant to Palforzia and other immunotherapies.
They also have an egg and a tree nut immunotherapy in development.