September 27/London/London Stock Exchange Aggregated Regulatory News Service -- Nestlé announced the creation of Nestlé Health Science S.A. and the Nestlé Institute of Health Sciences to "pioneer a new industry between food and pharma." These two separate organizations will allow Nestlé to develop in the area of personalzed health science nutrition to prevent and treat health conditions such as diabetes, obesity, cardiovascular disease and Alzheimer's disease, which are placing an unsustainable burden on the world's healthcare systems.

Nestlé Health Science S.A., a wholly owned subsidiary of Nestlé S.A., will become operational on January 1, 2011. The new company will be run at arm's length from Nestlé's main food, beverages and nutrition activities, and incorporate the existing global Nestlé HealthCare Nutrition business, which had a turnover of CHF 1.6 billion in 2009. Nestlé Health Science S.A. will also have access to external scientific and technological know-how through Nestlé's innovation network, as well as a number of venture capital funds in which the group has interests. Luis Cantarell, the company's designated president and CEO, will report to Paul Bulcke in his capacity as Administrateur délégué of the board of directors of Nestlé Health Science S.A., which is chaired by Peter Brabeck-Letmathe.

The Nestlé Institute of Health Sciences will be part of Nestlé's global R&D network. The Institute will be run by Emmanuel E. Baetge, former chief scientific officer of ViaCyte, a biotech company based in San Diego, who will report to Nestlé chief technology officer Werner Bauer and a steering committee composed of both Nestlé and external members. Nestlé will "invest hundreds of millions of Swiss francs over the next decade to build a world-class Institute of Health Sciences, which will conduct research in relevant areas of biomedical science to translate this knowledge into nutritional strategies to improve health and longevity." The Institute will be based in the multi-disciplinaryscientific environment of the Swiss Federal Institute of Technology (EPFL) in Lausanne, where Nestlé is already involved in two life science initiatives.

Brabeck-Letmathe said that Nestlé will be a pioneer in helping to shape the space between the food and pharma industry. "The combination of health economics, changing demographics and advances in health science show that our existing healthcare systems, which focus on treating sick people, are not sustainable and need redesigning. Nestlé has the expertise, the science, the resources and the organisation to play a major role in seeking alternative solutions. Personalized health science nutrition is about findingefficient and cost effective ways to prevent and treat acute and chronic diseases in the 21st century," he said.

Bulcke commented, "The creation of Nestlé Health Science S.A. and the Nestlé Institute of Health Sciences is the best way to focus our attention and organize our unique capabilities and competencies to seize this promising business opportunity. The new set-up will give us a pioneering and leading role in this entirely new industry, while at the same time allowing us to keep the necessary focus on Nestlé's extremely important food, beverages and nutrition business, as embodied by our binding promise of Good Food, Good Life."

Cantarell noted, "Thisis an exciting new business opportunity, the execution of which will have a positive long-term impact on peoples' lives. Personalized health sciencenutrition will create shared value, both for Nestlé and for society, by successfully preventing, improving and treating acute and chronic medical conditions. I am looking forward to getting this ground-breaking work underway."

Baetge explained, "The Institute will create and deliver world-class excellence in biomedical research to better understand human diseases and aging as influenced by genetics, metabolism and environment. Translating this knowledge will allow us to advance the concept of daily personalized health science nutrition as the most important first step in disease prevention and treatment."

From the October 4, 2010, Prepared Foods E-dition