Nestle, the Swiss based transnational and world's biggest food company, is now moving into pharmaceutical, after it agreed to pay DBV Technologies SA, a French developer, as much as 100 million euros ($110 million)to develop and market an experimental milk allergy test for infants.
According to Bloomberg, Nestle will pay the French based company 10 million euros upfront for development of its skin patch test, which Nestle will have the right to sell globally pending regulatory approval, DBV said in a statement on Tuesday.
DBV added that it will fund development and expects to ask authorities for clearance by 2021.
As per Reuters, Nestle’s deal highlights the food company ambitions for its Health Science division created in 2011, which it believes could generate more than 10 billion Swiss francs ($10 billion) in annual sales.
The report further added that similar deals had been signed by Nestle with other small companies, as it bids to venture into a new kind business “that is midway between food and pharmaceuticals.”
“We didn’t have the means to develop it further before,” said DBV Chief Operating Officer David Schilansky. “Now, in the hands of Nestle, with a plan to grow it in the U.S., Europe and Asia, the potential is very different.”
Allergy to cow's milk is common in babies and young children and Nestle believes it as a significant market.
“About 5 percent to 15 percent of infants show adverse reactions to proteins contained in cow’s milk,” says Bloomberg. Whereas, diagnosing the allergy is also difficult because there are no unique set of symptoms.
Now, under the terms of agreement DBV will be eligible to receive up to 90 million euros in development, regulatory and commercial milestones, in addition to the upfront payment. The company will also collect royalties on eventual product sales.
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