Nestlé says its Prometheus Laboratory acquisition will help it develop products for patients with metabolic conditions and to promote brain health

When it comes to the brave new world of genetics in pathology and clinical laboratory testing, such terms as pharmacogenomics, companion diagnostics, and personalized medicine have been coined to describe the intersection of genetic testing and molecular diagnostics with emerging medical practice. Now the world’s largest food company is putting forth a vision of how genetic testing can inform decisions about the patient’s nutrition.

It was last May when the health-science unit of Nestlé SA, (VTX:NESN) the giant foods company in Vevey, Switzerland, announced its purchase of Prometheus Laboratories Inc., of San Diego, California. The price was $567 million.

Prometheus is expected to have revenues of about $250 million this year. Pathologists and clinical laboratory managers should take note that this purchase price represents a multiple of about two times annual revenues. This demonstrates that investors continue to have strong interest in companies with a good position in genetic testing and molecular diagnostics.

Financial analysts were surprised at the deal. That’s because Nestlé is best-known as the maker of bottled water, and such well-known foods as Dreyer’s™ ice cream, KitKat™ candy, Gerber™ baby food, Nescafé™ coffee, Coffee-Mate™ non-diary creamer, and Pro Plan™ dog food, among other products, Nestlé is the world’s largest foods company.

By contrast, Prometheus is a company that specializes in diagnostics and specialty pharmaceutical products in gastroenterology and oncology. It focuses on such conditions as inflammatory bowel diseases, including Crohn’s and ulcerative colitis.

(Luis Cantarell is CEO, Nestlé Health Science. Image courtesy of Nestlé.)

(Luis Cantarell is CEO, Nestlé Health Science. Image courtesy of Nestlé.)

Nestlé stated it will focus on developing products for patients with metabolic conditions and to promote brain health, both of which are of interest to Nestlé Health Science. Nestlé’s purchase of Prometheus will allow it to develop “personalized healthcare solutions based on diagnostics, pharma and nutrition,” Nestlé Health Science CEO Luis Cantarell, said in the statement.

“This shows Nestlé is serious about this initiative,” said James Amoroso, a food industry consultant during an interview with Bloomberg news. “Because the group is so big, you probably won’t see the impact for another 10 years. Ultimately there’s quite a lot of money to be made. Pharmaceutical margins are higher than food margins.”

Pathologists and medical laboratory directors may know Prometheus’ diagnostic products. They include IBD Serology 7 (a diagnostic test for inflammatory bowel disease that can differentiate the subtypes of Crohn’s disease and ulcerative colitis), and Crohn’s Prognostic, which combines six serologic markers and three genetic mutation markers to provide physicians with a personalized serogenetic profile. Prometheus also offers serology and genetic tests to help physicians diagnose celiac disease.

Another reason why pathologists may also recognize the Prometheus name is due to its involvement in a patent lawsuit, Prometheus Laboratories v. Mayo Collaborative Services. Last month, the U.S. Supreme Court decided it would review this case. Experts say that the hearing will take place in the Fall and the ruling is likely to be issued next summer.

Meanwhile, the acquisition of Prometheus Laboratories by Nestlé shows how rapid advances in genetic knowledge and molecular testing technologies can open up new channels of healthcare. It would open up an entire new market in clinical laboratory testing were Nestlé to develop nutritional products that physicians can include in therapeutic options for a patient, informed by the results of appropriate medical laboratory tests.

–Joe Burns

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