Nestlé starts review of peanut allergy treatment brand Palforzia, spins off Freshly meal-kit business to L Catterton

US – Nestlé has decided to explore strategic options for Palforzia, the peanut allergy treatment, following slower-than-expected adoption by patients and healthcare professionals.

The review of the peanut allergy medication purchased for US$2.6bn two years ago with the acquisition of Aimmune Therapeutics is expected to be completed in the first half of 2023.

Palforzia is an oral immunotherapy indicated for the mitigation of allergic reactions, including anaphylaxis, that may occur with accidental exposure to peanuts. Palforzia is approved for use in patients with a confirmed diagnosis of peanut allergy.

Nestlé first invested in Aimmune in 2016 and, after further share purchases, owned just over 25% of the business until the acquisition.

The acquisition of Aimmune extended Nestlé’s reach into healthcare, which is Schneider’s background. He joined the group from the German healthcare company Fresenius.

Schneider told investors that the outcome of the Palforzia acquisition was “very vexing to me” after “we were drop-dead, certain there was an unmet medical need . . . it was as close to a sure thing as we could get . . . but we had to accept the reality that it is a niche product”.

He added that Nestlé is trying to correct mistakes quickly and aims for consistent results in the coming years, even as the market becomes more volatile.

Going forward, Nestlé said its Health Science unit, which was set up in 2011, will sharpen its focus on Consumer Care and Medical Nutrition rather than expanding into pharmaceuticals.

Greg Behar, who heads the company’s health science business, said it expected a significant impairment relating to Palforzia.

Nestlé’s “pruning of recently acquired businesses was something we considered a risk: when a company moves at speed and tries to innovate rapidly, there will be attempts that fail,” said Bruno Monteyne, an analyst at Bernstein.

Spins off its Freshly meal-kit business to L Catterton

Nestlé has also gone ahead to spin off its Freshly meal-kit e-commerce delivery business into a joint venture with private-equity firm L Catterton.

Nestlé first invested in New York-based Freshly in 2017 with a 16% interest before purchasing the remainder of the direct-to-consumer subscription business in 2020 for US$950m when the coronavirus-era restrictions fueled rapid growth in sales of meal kits, which has now faltered.

In a newly formed “partnership” with Connecticut-headquartered L Catterton, the tie-up also incorporates the investor’s Kettle Cuisine-owned business, a Massachusetts-based supplier of soups, sauces, and side dishes to the retail and out-of-home channels.

Nestlé did not disclose the financial terms of the deal but said Freshly “has not driven the scale or performance it had hoped for” after “dramatic shifts in the external business environment”.

It will hold a minority stake in the venture, which “will focus on offering a wide assortment of fresh food products to customers across geographies and a variety of channels”.

For all the latest food industry news from Africa and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube channel.

More News Articles

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.