Please ensure Javascript is enabled for purposes of website accessibility

Full Steam Ahead For Aimmune Therapeutics and the World's First Peanut Allergy Therapy

By Cory Renauer - Feb 5, 2020 at 10:56AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Another $200 million investment from Nestle will turbocharge Palforzia's commercial launch.

Aimmune Therapeutics (AIMT) recently announced a $200 million cash injection from Nestle (NSRGY 3.09%), the world's largest food and beverage company. The company that produces heaps of peanut-containing products will buy enough common and preferred shares to raise its voting power to 19.9%, according to Aimmune.  

Turning the corner 

Since its inception, Aimmune's been focused solely on drug development at the expense of investors. Following the recent FDA approval of its peanut allergy therapy, Palforzia, the biotech is about to turn the commercial-stage corner. Debut drug launches generally don't go well, but a big cash injection from Nestle will give Aimmune a lot more room for error.

Human hands exchanging money.

Image source: Getty Images.

Aimmune set the list price of Palforzia at $890 per month, which is enough to cause end payers to think twice about reimbursement of a drug that isn't as remarkable as its price tag suggests. Palforzia treatment won't allow children with severe allergies to enjoy peanut butter and jelly sandwiches again. Instead, it can reduce the severity of anaphylactic shocks caused by accidental exposure to a small amount of peanut protein, or prevent them altogether.

A shared stake

Nestle will purchase 1 million shares of Aimmune common stock plus preferred stock that could be converted to another 5.3 million shares without voting rights in the future. The transaction will raise the number of Aimmune shares entitled to Palforzia's profits about 10% higher.

While Nestle's additional investment gives Aimmune Therapeutics more room for error, the company still can't afford to botch Palforzia's commercial launch. The biotech company finished September with $195 million in cash and securities after operations burned through a frightening $181 million during the first nine months of 2019.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nestle S.A. Stock Quote
Nestle S.A.
$116.87 (3.09%) $3.50
Aimmune Therapeutics, Inc. Stock Quote
Aimmune Therapeutics, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.