Chocolate is not the only thing Nestlé has on its radar. The Swiss company will buy Phagenesis, a Britain-based medical device maker, for an undisclosed amount. The acquisition represents Nestlé's aim to shift more focus away from the food industry to the medical sphere, reports Reuters.
Here are four things to know.
- Through the deal, Nestlé Health Science will give Phagenesis an upfront payment of an undisclosed amount, followed by additional milestone payments for the completion of clinical development programs in Europe and the U.S., which Phagenesis hopes to achieve by 2019.
- Phagenesis is developing a device to treat dysphagia, or difficulty swallowing. The device uses electrical stimulation to help patients regain control of swallowing functions. While the device is mainly intended for stroke patients, elderly individuals and those on ventilators can also benefit from the device, according to The Wall Street Journal.
- Nestlé's health unit mainly offers medical food tailored for people with dysphagia, although it also sells a handful of medical devices to help patients who must eat through a tube, WSJ reported.
- Last year, Nestlé's health business proved more profitable than its food and beverage unit, producing $4.1 billion in sales out of Nestlé's total $90 billion. The health sector's sales grew 7.6 percent in 2015, compared to a 4.2 percent growth for the overall company.
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