Tuesday, 28 September 2010

Nestle Uses Food In Battle Against Obesity

Neptune Technologies & Bioresources
(NTB - TSX V) (NEPT - NASDAQ)
Basic Shares: 40.2 million
Fully diluted: 43.1 million




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Eat specialized foods to fight obesity, Alzheimer's, cardiovascular disease and diabetes?
Seems odd.
But the biggest food and beverage company in the world - Nestle - just announced a new corporate division that will use its considerable talents and hundreds of millions to launch a pioneering venture in a "a new industry between food and pharma."
And one of the relatively little Canadian companies that has been quietly working with the Swiss-based giant in this area is Quebec-based Neptune Technologies.
Neptune's Krill Oil caught the eye of the Swiss behemoth several years ago for a number of reasons, none of which have been made public. But the public knows that Neptune's Krill Oil has the remarkable ability to reduce bad cholesterol and increase good cholesterol levels.
As a result, Neptune announced in July, 2007 that it struck a collaboration agreement with the Nestle Research Centre to jointly study, "the effects of Neptune Krill Oil (NKO™) on exceptionally prevalent conditions affecting the worldwide adult population."
"Exceptionally prevalent conditions," is a tall glass of water.
Just what specific ailments Nestle and Neptune were working on was never revealed.
But the street expectation is that a significant business event will emerge from the Neptune/Nestle alliance in mid 2011.
Nestle has sales of $100 billion per year through its vast array of food products, to name just two - Haagen-Dazs ice cream (the writer's favourite) and Nespresso coffee.
Peter Brabeck-Letmathe, Nestle's chairman and former chief executive, said in the recent news release that there is unrivaled demand for foods with healthy additives because the existing health care system can't cope with the flood of people afflicted with diabetes, obesity, cardiovascular disease and Alzheimer's.
"Personalized health science nutrition is about finding efficient and cost-effective ways to prevent and treat acute and chronic diseases in the 21st century," Brabeck-Letmathe said.
To accomplish the latter, Nestle will create a medical nutrition institute in Switzerland and a subsidiary called Nestle Health Science SA.
Nestle Health Science will begin operations in Jan., 2011 and run "at arms length" from the food and beverage company.