What the Aimmune and Nestlé Health Science agreement tells us

Aimmune Therapeutics (AIMT) has news. A lot of it is from a successful phase 3 trial for its peanut allergy drug as well as other news that boosts our conviction that this product is, indeed, important and has a good chance for approval in the U.S. and overseas.  

Aimmune is a biopharmaceutical company developing treatments for potentially life-threatening food allergies. The firm’s Characterized Oral Desensitization Immunotherapy (CODIT™) approach is intended to provide meaningful levels of protection against allergic reactions resulting from accidental exposure to food allergens by desensitizing patients with defined, precise amounts of key allergens.

In the NEWS 

Two days ago, the firm announced that Nestlé Health Science will make an additional equity investment in Aimmune of $98 million, increasing Nestlé Health Science’s ownership of Aimmune to approximately 19 percent.

This $98 million investment brings Nestlé Health Science’s total investment in Aimmune to $273 million. They first invested $145 million in Aimmune in November 2016, followed by $30 million as part of Aimmune’s public offering in February 2018.

That’s not all. Aimmune and Nestlé Health Science entered into a two-year extension of their original two-year strategic collaboration agreement which focused on offering innovative food allergy therapies. The agreement does not contain any partnership, collaboration or negotiation restrictions on Aimmune.

Jayson Dallas, M.D., President and CEO of Aimmune said that Nestlé Health Science has been a tremendous ally as we lead the way into the new field of food allergy treatment. Their expertise in the pediatric space and their insights as a premier consumer health and medical nutrition products company have advanced our thinking and will help with critical planning as we anticipate launching AR101. He added that Aimmune is especially grateful to have Greg Behar, CEO of Nestlé Health Science on Aimmune’s board and to be able to continue to benefit from his guidance and vision in service of the firms’ shared commitment to improving the lives of people affected by food allergies. He added, “Combined with our $255 million of cash, as of the end of the third quarter, this $98 million investment finances the company well beyond the anticipated approval and launch of AR101 in the United States. Additionally, it gives us the ability to bring AR101 to patients in Europe and to develop our pipeline of treatments for other food allergies.”

Greg Behar, CEO of Nestlé Health Science, stated: “With this investment, Nestlé Health Science continues to be the largest investor in Aimmune. We’re proud to reaffirm our strong strategic interest in Aimmune and the important progress they have made toward addressing the significant unmet needs in pediatric food allergy. The imminent U.S. regulatory filing for AR101 and the anticipated launch to follow in the coming year will be great news for people with peanut allergy, who need robust, reliable protection from accidental-exposure reactions. This collaboration exemplifies Nestlé Health Science’s commitment to food allergy and our excitement to continue an alliance with a leading innovator in the development of food allergy therapeutics.”

In its press release, Aimmune stated that Nestlé Health Science investment adds a two-year extension to the original two-year strategic collaboration between Aimmune and Nestlé Health Science signed in November 2016. Through the continuation of the Strategic Collaboration Committee.

Aimmune and Nestlé Health Science will engage broadly on Aimmune’s current and future development programs, leveraging Nestlé Health Science’s scientific, regulatory and commercial expertise.

Aimmune will receive the $98 million in connection with Nestlé Health Science’s purchase of 3,237,529 newly issued shares of Aimmune’s common stock at $30.27 per share, priced at a five-day volume adjusted trading average.

Aimmune’s AR101 received the FDA’s Breakthrough Therapy Designation for the desensitization of peanut-allergic patients 4–17 years of age.

Aimmune plans to submit regulatory filings for marketing approval of AR101 in the United States and Europe based on data from the pivotal Phase 3 PALISADE clinical trial of AR101, which in 4–17-year-old subjects met its primary and key secondary endpoints, and additional ongoing and completed AR101 clinical trials.

Prohost Observations

We tend to be optimistic about the approval of Aimmune’s product, AR101. Based on the positive Phase 3 trial results, we also believe that the product will, indeed, protect children and teenagers from the allergic reactions caused by peanuts. We hope that those who cannot eat these nuts will soon be able to enjoy them like other youths.

We hope that using the firm’s CODIT™ approach, used in the creation of AR101, will succeed in the firm’s other products aimed at preventing allergic reactions caused by other foods. This hope, we believe, is shared by Nestlé Health Sciences, which has great interest in the successful outcome of Aimmune in making other foods safe for everybody.  

Our interest increased after learning about the completion of the transaction between Aimmune and Nestlé Health Sciences. The total investments in Aimmune will become an 18.9-percent stake in the company. What boosted our enthusiasm was knowing, in fact, that Aimmune will remain the owner of all the rights to its current and future pipeline assets and that Aimmune and Nestlé Health Science will collaborate towards the successful development of such assets.

This is good news.

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