Nestle SA (ADR) (OTCMKTS:NSRGY) has announced that it has agreed to buy the rights to an experimental milk allergy test, from DBV Technologies SA. The deal has been valued at $110 million, of which 10% would be paid as upfront. Nestle has stated that the amount would help DBV to complete the test development. It should be noted here that milk allergy is the most common type of food allergy in children. DBV has already stated that it expects to pursue regulatory approval, by 2021.
Nestle’s health sciences unit has been operating since 2011 and has been aimed at fighting chronic diseases. The company has already revealed that it plans to ensure that the business becomes worth $10 billion. In accordance with this ambition, Nestle had bought a stake in Seres Therapeutics Inc, last year.
Although DBV’s testing kit has been in the market for the past 12-years, authorities have not yet cleared it for exports or reimbursements. This is mainly because the kit is still in the final stages of its clinical trials. The COO of DBV, David Schilansky, stated that his company had lacked the resources to further develop the kits. However, the addition of Nestle has now completely changed the scenario and the potential for further development.
In addition to advancing its portfolio, Nestle has also announced that it would be exercising several cost saving measures, in order to cope with the growing competition and to strengthen the efficiency of its growing business. The company has already announced plans to save $2.5 billion, over the course of the next 3 years. Apart from the slow market environments, the company has particularly suffered a setback in China, where consumers are quickly shifting towards online retail and healthier foods.
Nestle SA (ADR) (OTCMKTS:NSRGY) recorded a gain of 0.03% in terms of its share value, to close at a share price of $74.94, after having a trade volume of 278,026, during the May 27 trading session.