Nestlé catches BioGaia bacillus
Swiss Nestlé S.A. has extended its collaboration agreement with BioGaia AB. The world’s largest nutrition company is paying up to €50.8m for a perpetual licence to use BioGaia’s patented Lactobacillus reuteri in infant nutrition products. BioGaia is receiving an upfront payment of a40m in the first quarter of 2012, and an additional a10.8m on achieving certain milestones in the next five years. Nestlé also has the option to extend the use of L. reuteri to other product areas. “Through the new agreement we have secured income that otherwise would not have been guaranteed under the original contract,” said Peter Rothschild, President of BioGaia. The Stockholm-based company announced it will use the proceeds to “further invest in its own brand” and for “a generous dividend policy”. A recent double-blind study in Indonesia showed that L. reuteri significantly reduced episodes of diarrhea. In the trial, 494 children received low lactose milk with or without L. reuteri or L. casei 431. The incidence of diarrhea episodes fell by 32% in the group supplemented with L. reuteri compared to placebo.
In the last few years, Nestlé has moved significantly into the field of functional food. In September 2010 it announced it would invest about US$500m in a new venture called Nestlé Health Science.