Nestle Sees a Sweet Medtech Deal

The healthcare arm of food giant Nestle will pace its acquisition of Phagenesis by the milestones the British medtech company reaches.

Nancy Crotti

Nestle Health Science plans to buy a British company that has developed an electrical treatment for a swallowing disorder.

Under terms of the agreement, Nestle will make an upfront payment to Phagenesis followed by milestone-based funding to the Manchester, England-based company while it completes the clinical evaluation for its Phagenyx device. The device is designed to treat dysphagia by restoring the neurological control of swallowing.

Patients who have suffered a stroke or are using artificial ventilation typically have trouble swallowing, with food and drink entering the lungs and causing infection. The Phagenyx device consists of a base station and a standard nasogastric feeding tube with built-in electrodes that provide electrical stimulation to the patient. The base station's software controls the intensity of the stimulation as set by an operator, according to company website.

Phagenesis expects a clinical study of the treatment that is underway at nine European sites will wrap up in January. The acquisition will be based upon successful completion of European and U.S. development programs, anticipated by 2019, according to a statement from the companies. Financial terms were not disclosed.

"Nestle Health Science is the leading global player in dysphagia, with capabilities and reach to enable Phagenesis to accelerate the development and deployment of Phagenyx to patients around the world," Phagenesis CEO Reinhard Kricki said in the statement. Nestle sells thickening powder for food and drink, and a nutritional pudding for people with dysphagia.

Dysphagia occurs in about 29% to 55% of the estimated 15 million patients who suffer stroke each year, according to a 2005 study in the journal Stroke. In addition to causing aspiration pneumonia, it can lead to malnutrition and dehydration. Standard treatment for neurologically induced dysphagia includes exercises and different swallowing techniques. Patients are also counseled to eat softer foods in smaller bites and to avoid dry foods. Such treatment addresses the symptoms, but Phagenyx was designed to treat the cause of dysphagia, according to the statement. The device has received the CE Mark in Europe, but has not been approved by FDA.

Nancy Crotti is a contributor to Qmed.

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[Image courtesy of Phagenisis]