Nestlé SA,
NESN.VX +0.33%
making a foray into "brain health products," said it bought a stake in
a company that makes milkshakes for Alzheimer's patients.
Nestlé, better known as the maker of Kit Kat chocolate bars and Nescafe coffee, didn't disclose how much it invested in closely held Accera, which is based in Brookfield, Colo. It also declined to say how much of Accera it would own, but said it would take a seat on its board.
"The significance of this is not the size of the investment, but the fact that it is our first step in developing our brain health portfolio," said Luis Cantarell, president and chief executive of Nestlé Health Science, a subsidiary set up by the Vevey, Switzerland, company last year.
Nestlé has long been interested in the links between food and brain health. In 2006, it invested 25 million Swiss francs in a collaboration with ETH Lausanne, a leading Swiss technical university, to develop food products that protect the brain against diseases such as Alzheimer's. The company's interest in the field intensified last year with the launch of Nestlé Health Science.
Nestlé plans to invest around $500 million over the next 10 years to produce more food and drink products with health benefits. The subsidiary is focused on gastrointestinal, metabolic and brain health. Alzheimer's, which affects memory and cognitive function, is the most common adult form of dementia and affects five million in the U.S. alone, Nestlé said.
Accera sells Axona, an easy-mix powder that is added to milk or other liquids to make a once-daily drink. Axona is already given to 30,000 patients in the U.S. Axona is made from a compound derived from coconut oil that purports to provide an alternative energy source for the brain. In theory, this would help Alzheimer's patients because their brains are less able to use glucose for the energy they need.
Axona requires a prescription.
Because it is sold as a medical food, the Axona milkshake must meet truth-in-labeling requirements. It doesn't require approval from the U.S. Food and Drug Administration.
"We are not saying it is a cure for Alzheimer's. It has demonstrated in certain patient groups that it can be a source of energy for the brain and slow down cognitive decline," said Mr. Cantarell. He said the science merited further investment and clinical tests.
Accera has completed four trials involving more than 150 patients. The studies showed the product was safe and produced significant cognitive improvements in some patients with mild to moderate Alzheimer's, Nestlé said. Accera now plans a new trial involving 300 to 400 patients over a six-month period.
Nestlé signaled its intentions to expand in the health and wellness market last year by setting up NHS, which is focused on food with medical benefits, often called nutriceuticals. NHS has made a handful of small acquisitions since.
It is aiming to capture a bigger slice of a market that is expected to grow to $691 billion a year by 2015 from $600 billion in 2010, according to research by Euromonitor International.
Analysts said they didn't think the investment was large, but welcomed the move as a long-term investment in a growing market.
"This is a seed for the future, and is part of Nestlé's long-term strategy," said Jean-Philippe Bertschy, an analyst at Bank Vontobel in Zurich.
2
Nestlé, better known as the maker of Kit Kat chocolate bars and Nescafe coffee, didn't disclose how much it invested in closely held Accera, which is based in Brookfield, Colo. It also declined to say how much of Accera it would own, but said it would take a seat on its board.
"The significance of this is not the size of the investment, but the fact that it is our first step in developing our brain health portfolio," said Luis Cantarell, president and chief executive of Nestlé Health Science, a subsidiary set up by the Vevey, Switzerland, company last year.
Nestlé has long been interested in the links between food and brain health. In 2006, it invested 25 million Swiss francs in a collaboration with ETH Lausanne, a leading Swiss technical university, to develop food products that protect the brain against diseases such as Alzheimer's. The company's interest in the field intensified last year with the launch of Nestlé Health Science.
Nestlé plans to invest around $500 million over the next 10 years to produce more food and drink products with health benefits. The subsidiary is focused on gastrointestinal, metabolic and brain health. Alzheimer's, which affects memory and cognitive function, is the most common adult form of dementia and affects five million in the U.S. alone, Nestlé said.
Accera sells Axona, an easy-mix powder that is added to milk or other liquids to make a once-daily drink. Axona is already given to 30,000 patients in the U.S. Axona is made from a compound derived from coconut oil that purports to provide an alternative energy source for the brain. In theory, this would help Alzheimer's patients because their brains are less able to use glucose for the energy they need.
Axona requires a prescription.
Because it is sold as a medical food, the Axona milkshake must meet truth-in-labeling requirements. It doesn't require approval from the U.S. Food and Drug Administration.
"We are not saying it is a cure for Alzheimer's. It has demonstrated in certain patient groups that it can be a source of energy for the brain and slow down cognitive decline," said Mr. Cantarell. He said the science merited further investment and clinical tests.
Accera has completed four trials involving more than 150 patients. The studies showed the product was safe and produced significant cognitive improvements in some patients with mild to moderate Alzheimer's, Nestlé said. Accera now plans a new trial involving 300 to 400 patients over a six-month period.
Nestlé signaled its intentions to expand in the health and wellness market last year by setting up NHS, which is focused on food with medical benefits, often called nutriceuticals. NHS has made a handful of small acquisitions since.
It is aiming to capture a bigger slice of a market that is expected to grow to $691 billion a year by 2015 from $600 billion in 2010, according to research by Euromonitor International.
Analysts said they didn't think the investment was large, but welcomed the move as a long-term investment in a growing market.
"This is a seed for the future, and is part of Nestlé's long-term strategy," said Jean-Philippe Bertschy, an analyst at Bank Vontobel in Zurich.
2
No comments:
Post a Comment