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Blow to Avesthagen as Nestle suspends diabetes food deal

Blow to Avesthagen as Nestle suspends diabetes food deal
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First Published: Mon, Nov 17 2008. 12 00 AM IST

Updated: Mon, Nov 24 2008. 07 01 PM IST
Mumbai: Nestle Nutrition, the health food and nutrition arm of Nestle SA, the world’s largest food and beverages company by sales, has returned seven of eight nutritional bioactive molecules developed in a collaborative agreement with Avestha Gengraine Technologies Ltd.
The move, a blow to Bangalore-based Avesthagen, effectively suspends a plan to use these active ingredients for a much talked about diabetes health food that the Swiss company is proposing to launch in the global market.
The financial value of the partnership had never been disclosed.
Avesthagen is a biotechnology company that conducts food and drug research integrating modern technology and knowledge of India’s traditional medicinal systems.
The firm was jointly promoted by ICICI Venture, Tata Industries Ltd, Godrej Industries Ltd and Cipla Ltd, along with founder Villoo Morawala Patell. Other investors in the company now include BioMerieux SA, Fidelity International Ltd, Danone group’s Daninvest.com SA, French seed firm Groupe Limagrain, Bennett, Coleman and Co. Ltd, and New York Life Investment Management India Llc.
Nestle has also put on hold the developmental work on the remaining compound after the company found a similar product in the research portfolio of Novartis Medical Nutrition, which Nestle acquired after the Avesthagen deal in 2005, said a person familiar with the development. He didn’t want to be named because of the sensitive nature of the development.
“Nestle terminated the agreement with Avesthagen earlier this year. For reasons of confidentiality I am not able to comment on specific bioactive molecules, or the status of Nestle research relating to such molecules,” said Hilary Green, head of R&D communications, Nestle SA, in an email response to Mint.
She declined to say why the molecules were returned and Mint couldn’t independently ascertain the reason.
Avesthagen’s Patell said, “We are yet to hear from Nestle about its plan to go ahead with the diabetes health food project using the compound developed out of our partnership, though we continue talking on various other collaborative research possibilities.”
However, Patell confirmed that “Nestle has returned some of the compounds to us, and we are free to further develop them on our own or with other partners.”
Avesthagen and Nestle had in May 2005 entered into a research and development programme aimed at developing nutritional bioactives in foods through research and new technologies, and to develop a delivery mechanism for the body of knowledge that exists within traditional Indian medicinal systems. The expected outcome was a new line of food products that would be exclusively developed to promote health.
Nestle acquired Novartis Medical Nutrition, the nutrition business of Swiss drug company Novartis AG in 2007; the integration of these two large health and nutrition companies, which have a combined presence in at least 40 countries, is not yet complete. The companies focus on disease-specific nutrition and related medical products in selected therapeutic areas, including diabetes, oncology, geriatrics, digestive health, wound care and critical illness.
Under the partnership, the Bangalore firm would have manufactured and supplied the active ingredient for the product had Nestle taken it to the market.
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First Published: Mon, Nov 17 2008. 12 00 AM IST