BioGaia, Nestlé extend collaboration for infant nutrition products
BioGaia, a Swedish biotechnology firm that develops probiotic products, and Nestlé have signed agreements to extend the collaboration in the field of infant nutrition products.
Under the extended agreements, Nestlé will enter into a perpetual license to use BioGaia's patented Lactobacillus reuteri in infant nutrition products for EUR50.8m, which will be paid over a period of five years.
In addition, Nestlé has also signed an option agreement with BioGaia to extend the use of L Reuteri to other product areas.
Both the companies are working on other initiatives such as development of new products in the infant nutrition and other nutrition areas, the distribution of BioGaia-branded products in new markets and other initiatives for the mutual benefit of BioGaia and Nestlé.
BioGaia president Peter Rothschild said the acquisition of the licensed rights constitutes a very attractive deal for BioGaia now that through the new agreement it has secured income that otherwise would not have been guaranteed under the original contract.
The Swedish company estimates that due to upfront payments for the acquisition of the license, the revenues from Nestlé during 2012, excluding the up-front payment, will be some 50% of the value of sales during 2011.
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