Nestlé to Swallow Up Peanut Allergy Drug Maker Aimmune in $2.6B Deal

Aimmune Therapeutics, which this year won the first FDA approval for a food allergy immunotherapy, is set to be acquired by a division of global food giant Nestlé in a deal that values the biopharmaceutical company at $2.6 billion.

According to deal terms announced Monday, Nestlé will pay $34.50 for each Aimmune share that it doesn’t already own. The offer represents a more than 173 percent premium to Aimmune’s closing stock price on Friday, but it’s just 14 percent higher than Aimmune’s stock price in February, after it won FDA approval for its peanut allergy immunotherapy. Shares sank to a 52-week low in March and have remained slumped as the Brisbane, CA-based company struggled to build sales for its new product during the COVID-19 pandemic.

Shares of Aimmune (NASDAQ: [[ticker:AIMT]]) opened Monday at $34.22 apiece, up nearly 172 percent from Friday’s closing stock price.

The Aimmune product, Palforzia, is a powder made from peanut flour. Each capsule or packet contains precise amounts of peanut protein that is meant to be taken with food. The immunotherapy is not a peanut allergy cure. But by increasing doses over time, Palforiza is intended to reduce a patient’s peanut allergy sensitivity so that a reaction to peanut exposure will be less severe. In January, the FDA approved Palforzia for children between the ages of 4 and 17 who have a confirmed peanut allergy diagnosis. A late stage study is currently underway that could support expansion of the therapy’s approval to children between the ages of 1 to 4.

Oral desensitization is not a new concept. Allergists have practiced it for years as a way to reduce sensitivities to food allergies, including those caused by peanuts. But until Palforzia, there was no standard protocol or FDA-approved products for oral desensitization therapy. Aimmune formed in 2011 under the name Allergen Research Corp. The company raised nearly $100 million in two rounds of funding before going public in 2015. Just prior to the IPO, the company changed its name to Aimmune Therapeutics.

Aimmune’s relationship with Nestlé dates to 2016, when the Swiss food and beverage conglomerate’s nutritional science division, Nestlé Health Sciences, paid $145 million for a 15 percent stake in the California company. The investment did not give Nestlé any rights to Aimmune’s food allergy immunotherapy candidates. According to Aimmune’s securities filings, the deal also included a “standstill agreement,” in which the larger company pledged that it would not acquire the smaller one for two years.

The experimental peanut allergy immunotherapy hit the goals of clinical trials, and as it was being readied for submission to the FDA, Nestlé paid $98 million in 2018 to boost its Aimmune stake to 19 percent. The companies also agreed to collaborate on the development of Aimmune’s pipeline. Shortly after Palforzia won FDA approval earlier this year, Nestlé increased its stake in Aimmune yet again with a $200 million equity investment.

By acquiring Aimmune, Nestlé can bring Palforiza into its portfolio, which already includes a nutritional product for people with allergies to milk proteins. The conglomerate also gains access to the rest of Aimmune’s pipeline. An egg allergy immunotherapy, AR201, is expected to complete Phase 2 testing in the first half of next year. Another Aimmune program is in development for nut allergy.

Aimmune has also reached deals to bring in new allergy therapy candidates that could supplement its technology. In February, the company licensed an experimental antibody treatment from Xencor (NASDAQ: [[ticker:XNCR]]). The drug candidate, AIMab7195, suppresses a protein called IgE, which the body produces in response to allergens. Aimmune plans to initially develop the antibody for potential combination with its own food allergy immunotherapy pipeline candidates.

The acquisition has been unanimously approved by all of the independent members of Aimmune’s board of directors. Greg Behar, CEO of Nestlé Health Sciences and an Aimmune director, abstained from the vote due to his position with Nestlé. The companies expect to complete the transaction in the fourth quarter of this year.

Image: iStock/Marat Musabirov