Ah, nuts. They should’ve stuck to Baby Ruths and Butterfingers.
Nestlé announced Tuesday it will unload the world’s only approved peanut allergy treatment just two years after acquiring the company that developed it. Potential patients must’ve found it easier to just not eat at Five Guys and Texas Roadhouse.
Tough Nut to Crack
At its core, Aimmune Therapeutics’ Palforzia is innovative for anyone who’s ever had to sit at the nut-free lunch table in school. While it’s not a cure, it does lessen the reaction. Clinical trials found that two-thirds of patients who took the medication could safely handle 600mg of peanut powder — roughly two whole peanuts. That doesn’t sound like a huge leap in progress, but for those who constantly carry an Epipen, it’s a world of difference. Unfortunately for Nestlé, it’s a niche market — less than 2% of the US suffers from peanut allergies, and sales reflected that.
Another problem with Palforzia is it’s time-intensive compared to the traditional method of just avoiding peanuts. Patients need to visit an allergist every two weeks for four to five months, which includes an extra hour for observation just in case they go into shock — an extra hour that doctors can’t get paid for:
- Nestlé first invested in Aimmune in 2016, eventually building a stake of more than 25%. In 2020, it purchased the rest of the company at $34.50 a share, representing a 174% premium of its closing price that week. The whole deal was roughly $2.6 billion.
- In addition to blaming COVID-19 for disrupting Palforzia’s rollout, Schnieder said the treatment came with fixed costs that were hard to justify in the face of minimal sales like continuously collecting and submitting side effects data to the Food and Drug Administration. Now, Netslé’s health science division will focus more on its bread and butter of food supplements and vitamins.
The Peanut Gallery: It’s not fast enough to save Nestle’s investment, but peanut allergies are rising. And it’s not just a matter of collecting more data, according to health experts. A 2017 study estimated 2.5% of children in the US may have a peanut allergy, about a 20% increase from 2010. Some medical professionals believe Western diets high in sugar and saturated fat contribute to the influx. On second thought, maybe it was all those Baby Ruths and Butterfingers that got us here.