Business

Good afternoon, readers.

Last week, the Food and Drug Administration (FDA) approved the first-ever treatment for peanut allergies in young patients, Aimmune Therapeutics’s Palforzia. And the victory is already paying dividends for the biotech firm.

On Wednesday, food giant Nestlé’s Health Science arm announced an additional $200 million investment in Aimmune (on top of a $273 million existing stake, bring the total to $473 million).

It’s a convertible stock deal by Nestlé, which clearly has an interest in a company that’s on the bleeding edge of drug development for one of the most prevalent food allergies in the world—one that’s innately important for a global firm that manufactures foods which may contain peanuts. Nestlé’ food companies include ice cream brands, food service providers, candy makers, and much more.

“We are impressed with the progress Aimmune has made as it prepares to launch Palforzia, the first drug approved by the FDA for any form of food allergy,” said Nestlé Health Science CEO Greg Behar in a statement.

Palforzia was approved last Friday but, when it comes to its sales potential, the drug has faced some controversy among the investor class.

For instance, the treatment—which uses a formulation of peanut protein in order to get children who have deadly allergies used to the substance—requires significant oversight and eventual “up-dosing.” That’s a complicated process for a potentially deadly condition, and the treatment comes with a regulatory warning about its potential to cause anaphylaxis.

But the Nestlé investment underscores the bull theory. After all, about 1.2 million children have peanut allergies. That’s about 2% of the entire non-adult population of the United States. Evaluate Pharma projects that Palforzia could be a blockbuster drug that brings in more than $1 billion in annual sales by 2024.

The bet here is that, despite the challenges of administering the drug, enough parents and doctors will want to give the product a try and sales will soar.

Read on for the day’s news.

Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy

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