THE HEALTH unit of Nestle yesterday launched a tie-up with a company that specialises in traditional Chinese medicine in a bid to develop novel medicines derived from plants.
Nestle Health Science is expected to plough at least £100m into the joint venture with London-listed Chi-Med, which creates a new company called Nutrition Science Partners (NSP).
Chi-Med, which has years of experience in alternative medicine, will contribute its knowledge and facilities, while Nestle is throwing its weight behind the joint venture with a cash investment.
This is estimated at $150-200m (£94-£125m), although sources close to the deal suggested the figure could be higher than this. The companies believe the marriage of Nestle’s backing with Chi-Med’s herbal treatments will result in new remedies.
The parties will each have a 50 per cent stake in the venture. NSP will focus on gastro-intestinal treatments – such as those for irritable bowel syndrome – and may expand into the metabolic disease and brain health areas, the new company said.
Shares in Chi-Med – which is majority owned by Chinese conglomerate Hutchison Whampoa – rose almost five per cent in London yesterday.
Christian Hogg, the firm’s chief executive, said that Chi-Med “has invested for many years in developing novel medicines for the global market derived from proven botanical sources” and that it was “a leading company in the world in this field”.