Nestle Health Science (NHS) is paying $34.50 per share in order to fully own Brisbane, Calif.-based Aimmune Therapeutics Inc. in an all-cash deal valued at $2.6 billion that brings aboard the peanut allergy treatment Palforzia, cleared by the FDA in February of this year.
Expected to close in the fourth quarter, the transaction is happening via NHS’ unit Sociétés des Produits Nestlé S.A., and the payout represents a 174% premium to Aimmune’s closing price Friday. Shares (NASDAQ:AIMT) wasted no time catching up, trading premarket at $34.29, up $21.69, or 172%.
All of the independent members of Aimmune’s board have approved the pact. Greg Behar, CEO of NHS and an Aimmune director, abstained due to his position with the acquirer. The two firms have collaborated since 2016, when NHS brought a $145 million equity investment to Aimmune. The food company had put $273 million into its partner when, earlier this year, $200 million was added. NHS thus came to hold 19.9% of Aimmune’s outstanding common stock and voting power, with a 25.6% overall stake in the company’s fully diluted capitalization.
Soon, NHS will have it all. Palforzia, an oral biologic immunotherapy, is the first approved therapy for peanut allergy and is designed to mitigate reactions, including anaphylaxis, that come with an accidental exposure. Previously known as AR-101, Palforzia was tested in more than 1,200 trial patients.
In a report at the end of July, Wainwright analyst Andrew Fein said the product was sailing into the “perfect storm,” a reference to the COVID-19 pandemic. He also pointed with chagrin to the risk evaluation and mitigation strategies (REMS) included in Palforzia’s label – specifically, potential limitations posed by the 24-week up-dosing schedule, along with the prospect of missed dosing and incomplete treatment regimens, plus the difficulty in controlling children for specific timed dosing over a six-month period.
There was (and is) cause for optimism, however, as allergist REMS certifications had reached about 1,000 at July’s end, up from about 700 in May. A portion of the children for which Palforzia was made, i.e., those age 4-17, are not yet back to school, so they may be more available for doctor visits. And Aimmune has ongoing engagement with payers on the matter of coverage, along with targeted marketing.
Overall, such factors made an enticing picture for NHS, which also looks ahead to potential approval of Palforzia in Europe during the fourth quarter. Last week, full results from the qualitative study called Appeal-2, conducted in Europe, were published. The results showed the salutary impact peanut allergy has on the quality of life (QoL) of children, teenagers, and caregivers, reinforcing the quantitative findings of the Appeal-1 study in the U.S.
Earlier this month, would-be competitor DBV Technologies S.A., of Montrouge, France, made public the complete response letter (CRL) from the FDA for its Viaskin Peanut allergy patch. The FDA wants DBV to modify the patch, which means a new human-factor study. Officials also are requiring clinical data for the modified patch. DBV needs to provide more details on chemistry, manufacturing and controls as well, though the agency cited no safety concerns. The CRL didn’t amount to much of a surprise, as the FDA cancelled an advisory committee meeting that had been scheduled for May and asked DBV for more info.
Aimmune’s financial advisors in the NHS deal are J.P. Morgan Securities LLC and Lazard, with Latham & Watkins LLP acting as legal counsel.