(News Bulletin 247) – The group based in La Rochelle plunges on the Paris Stock Exchange, after announcing this Tuesday the end of the licensing and supply contract with Nestlé Health Science relating to its food supplement Totum-63.

This is a huge blow for Valbiotis. The biopharmaceutical company based in La Rochelle announced this Tuesday morning that it had terminated a licensing and supply contract with Nestlé Health Science relating to Totum-63, its food supplement aimed at preventing diabetes.

There is no water in the gas between the two partners which justifies this “unexpected separation” to use the title of the TP ICAP Midcap note published this Tuesday morning. This decision is linked to strategic changes within Nestlé Health Science. Valbiotis explains that the specialized branch of the Swiss giant has redefined its priorities in the health nutrition market. And this is what Invest Securities explains in its note published this Tuesday morning.

“This break with a major player in nutrition is not linked to Totum-63 or to relations with Valbiotis, but to a strategic turnaround at Nestlé Health Science with a redefinition of the group’s priorities after having experienced difficulties in 2023. Symbol Due to these difficulties, Nestlé had appointed a new director of the Health Science franchise in September 2023″, underlines the financial intermediary.

End of an agreement entered into in 2020

The two partners are therefore drawing a line under a partnership established in February 2020. Nestlé Health Science was seduced by the innovative concept developed by Valbiotis, which was then only five years old.

Under the terms of the agreement between the two parties, the world leader in therapeutic nutrition had obtained exclusive and worldwide commercial rights for Totum-63, its patented combination of five plant extracts, designed to reduce the risk of developing diabetes. type 2 in people with prediabetes.

Concretely, this food supplement aims to prevent type 2 diabetes in patients with prediabetes, that is to say a state at risk likely to develop type 2 diabetes, and patients at an early stage of the same. diabetes.

In return for these rights for this treatment, the Swiss group had agreed to an initial payment of 5 million Swiss francs, to which were added milestone payments linked to development and sales of up to 66 million Swiss francs, as well as progressive royalties on net sales. Valbiotis also invoiced the supply of the product to its partner, an additional source of income.

The Swiss group ultimately paid 20% of the amounts stipulated in the agreement, or 12.75 million Swiss francs, an amount which includes the initial payment of 5 million Swiss francs and 7.75 million Swiss francs in payments of steps. These payments financed the entire clinical course and mode of action study on Totum-63. “These clinical results have positioned Totum-63 as the first non-drug active substance with robust results for the management of prediabetes and early stages of type 2 diabetes,” recalls Invest Securites. Valbiotis specifies in its communication today that it will not have to reimburse these sums.

Faced with this enormous blow, Valbiotis must bounce back since this separation “on the other hand inevitably delays [la] international marketing” of Totum-63, reports TP ICAP Midcap.

The company therefore also indicated this Tuesday morning that it had taken over all of the intellectual property rights attached to the license. They include all patents relating to Totum-63 in France and in 62 countries internationally, as well as ownership of the clinical data from the Reverse-it study and the mode of action study.

Heavy decline in shares on the Paris Stock Exchange

Time is running out for Valbiotis. The French group recalls that it is aiming to put Totum-63 on the market in the first half of 2025. And internationally, the company will now have to begin new negotiations with a view to one or more agreements, “while the product was to be launched by Nestlé Health Science, according to TP ICAP Midcap, “between the end of 2024 and the beginning of 2025 with the United States as its first market”.

In terms of financial visibility, the group says it has cash of 25 million euros at the end of 2023 to carry out its development in the years to come. According to the financial intermediary, this “solid cash position” offers Valbiotis “solid room for maneuver to finance its growth within a narrowed scope”.

“Although the recovery of the rights to Totum-63 could make Valbiotis’ product portfolio more attractive to potential partners, the impact of this separation on the ongoing negotiations concerning Totum-070 (its dietary supplement against hypercholesterolemia, c “that is to say an increased presence of “bad cholesterol” Editor’s note), where the objective was to conclude at least one agreement in 2024, is still uncertain”, suggests Corentin Marty analyst at TP ICAP Midcap.

“Although the quality of clinical development and product positioning are not called into question by this divorce, the market should sanction the uncertainties regarding marketing outside France which now requires the support of a partner,” notes its Invest Securities side.

On the Paris Stock Exchange, this news has the effect of a bomb and logically falters Valbiotis since the latter loses “one of its first and biggest catalysts”, argues Corentin Marty. Its title is currently sinking 45% to 2.135 euros around 11:30 a.m. after being reserved for a decline in the first exchanges.

This unexpected break in relations with Nestlé is a big blow in the stock market history of Valbiotis. At the beginning of April, the Rochelle-based group indicated that it was in the starting blocks to market Valbiotis Cholesterol in France from May, a combination of plant extracts to treat hypercholesterolemia. With today’s news, Valbiotis has seen a fall of 60% since the start of the year, and even 80% compared to the 10.50 euros used for its IPO at the start of June 2017.