Wait! What just happened?

News out about Nestle Skin Health’s out-license of some exciting but non-dermatology assets to Palette Life Sciences. While it's good news, it does seem to be causing a bit of confusion around the earlier announcement of Nestle’s decision to "explore strategic alternatives" for its Nestle Skin Health business.  You may be wondering, “wait, what’s happening”.  So, here’s the skinny on this one.

Nestle Skin Health has been every effective in value maximization initiatives. Great.  But you may be wondering, exactly what are so called "value maximization initiatives"? Well it’s just corporate speak for out-licensing or selling non-core products and technologies to realize a better return on investment from your R&D programs.  The deal with Palette Life Sciences is but the latest example of this smart way of maximizing ROI and shareholder value.  Let’s take a deeper dive.

There are three products that are subject to this transaction, none of them involved in any way in dermatology. Palette has licensed exclusive rights to fully develop and commercialize three products: 

·      Deflux – the only FDA-approved injectable treatment of vesicoureteral reflux (VUR), a malformation of the urinary bladder that affects 1% of children worldwide. VUR can cause severe infections of the urinary tract and lead to irreversible kidney damage.  It’s an extremely traumatic condition for children and their families and Deflux, developed and manufactured by Nest Skin Health, provides a much-needed solution which is readily applied and solves this problem. Immediately.

·      Solesta – the only FDA-approved injectable treatment for fecal incontinence, which is also cleared for commercialization in Europe. Fecal incontinence is a debilitating health problem afflicting about 2% of people worldwide with four times more prevalence in women than men. Not only is this difficult to deal with physiologically, but it’s devastating psychologically.  Imagine living with the kind of fear in which you are out in public and suddenly, uncontrollably, having an ‘event’.  People who suffer from this condition lock themselves away and refuse to go out. They are prisoners to this disease. Solesta uniquely is able to address this unmet need. Talk about life changing!

·      Barrigel – a biodegradable injectable treatment for protection of the rectal wall when treating prostate cancer with radiation. The product is approved in Europe and will be further developed for future market introduction in the US.  External beam irradiation is a very effective treatment modality for prostate cancer and other solid tumor types (such as breast cancer).  Unfortunately, even the most skilled practitioner is unable to prevent damage to the surrounding tissue.  While there several approaches to overcoming this therapy limiting issue (people can fall off treatment due to this side effect) Barrigel is a far more sophisticated approach and already used very effectively in Europe by the most advanced physicians.  Look for this indication to transition to the US after appropriate clinical studies have been completed and for other follow-on indications to come.

These are going to be important products and positively impact the lives of millions of people and their families around the world.  They are all based on Nestle Skin Health’s underlying developing and manufacturing patents, trade secrets, technology and know-how in the field of polysaccharide chemistry and bioengineering.  In specific they are all comprised of NASHA which is non-animal based, stabilized hyaluronic acid, the same technology that is used to produce Nestle Skin Health’s world leading Restylane dermal filler franchise.

So, what just happened is an example of smart business.  The full potential of this NASHA technology has only just begun to be realized and can potentially be a source of a number of additional, non-dermatology products. 

I know some of the people involved with Palette Life Sciences; they are smart and insightful, driven, and passionate about making a difference.  They are well-advised and well-funded.  Putting these life-changing products in Palette’s capable hands ensures that they will be fully developed and be able to reach the broadest patient population possible where they do the most good. And oh yeah, and it helps Nestle Skin Health, and its potential successor, to realize the maximum ROI on its investment in R&D.

Smart business.