Updated: Oct 18, 2020
Aimmune (AIMT) a biopharmaceutical startup agreed to be acquired by Nestle for $2.6 Billion or $34.50 dollars a share. Before the acquisition Aimmune, the stock was hovering at $12 dollars a share. A startup that managed to grab the attention of Nestle Health for its investigational drug, PALFORZIA (Peanut (Arachis Hypogaea) Allergen Powder-dnfp]. The first drug to be approved for peanut allergies.
Food Allergies affect more than 4% of Americans, of the 4% living with allergies only 1% is attributed to peanuts. It is estimated that more than 1.6 million children in the US are diagnosed with peanut allergy. This is where Aimmune therapeutics tries to engineer a patients' own immune system to build immunity and tolerance. An interesting approach for a therapeutic, where patients are slowly given an increasing amount of AR101 (PALFORZIA) over a span of six months. Most patients start at a dosage of 0.5mg or 1/600th of a peanut and are slowly brought to 300 mg. By increasing the dosage of PALFORZIA, in theory, you are building tolerance to your food allergy. The first time I hear in drug development where a biotech company is purposely giving a small dosage of 'peanuts' to a patient living with peanut allergies. The primary efficacy was met in the study, where a percentage of patients gain tolerance of a single dose of 600 mg of a peanut protein with no more than mild allergic symptoms after 6 months of maintenance treatment.
What made Aimmune Therapeutics lucrative to Nestle is that not only does the drug allow patients to build tolerance but you're first to market. In our industry, you don't want to be like the next biotech company (I see this too often), but you do want to be the only company in the market with an approved therapeutic treating an allergy or disease. This is where Aimmune Therapeutics is an opportunity for Nestle, by investing $2.6 Billion for Aimmune Therapeutics, you're building your portfolio of drugs that are ready to be commercialized and marketed to patients in the US and other money-making markets like Europe and Japan.
A small investment of $2.6 Billion for a therapeutic gives Nestle a break into a food allergy market that is estimated to be worth $4.71 billion dollars by 2026. Add a good marketing team and product manager, and I think Nestle Health has a winner.