This Peanut Allergy Pill Is A Tough Nut to Crack

Nestlé spent $2.6 billion on Palforzia, but sales of the drug have been a disappointment, and the investment may be written down

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When Nestlé SA’s peanut allergy medicine first hit the market in 2020, Robert Wood, the director of pediatric allergy at Johns Hopkins Hospital in Baltimore, started preparing to offer it to the children he treats. But Covid-19 soon derailed in-person treatment, so over the next year and a half, Wood and his colleagues told some 1,000 patients about the new drug instead, suggesting they consider it when the pandemic abated.

Their responses came as a shock. Only six people were interested in a medicine that had been billed as a game changer for life-threatening allergies—the first of its kind to be cleared by US authorities. Three years later, Wood has yet to prescribe the drug, Palforzia, and he isn’t alone. Doctors and patients from California to Germany appear to be shunning the medicine in favor of the tried and true prescription for sufferers: simply avoiding peanuts and carrying an adrenaline injection for emergencies.

Nestlé’s chief executive officer, Mark Schneider, admitted as much in November, conceding that the drug’s uptake had been slow. Schneider in 2020 bought out Palforzia’s developer for $2.6 billion, paying a staggering 174% premium as he sought to take “the science business to the next level,” snapping up vitamin makers such as Puritan’s Pride and Solgar as well. The Swiss food giant is now looking for a buyer, and it says it will have to recognize a significant impairment to the deal’s original value—likely presaging a big writedown at a time when its core grocery business faces pressure from inflation.