In a bid to advance early life nutrition, DSM has bought Glycom for an enterprise value of $831 million (€765 mn), the science company revealed.
In search of next-generation HMOs
Tipped as the globe’s only fully-integrated Human Milk Oligosaccharides (HMO) provider, DSM details how its product development, preclinical and clinical development, and regulatory and large-scale manufacturing will spur Glycom’s innovation capabilities to create “next-generation” HMOs.
Found in human breast milk, HMOs are a group of carbohydrate structures that perform as prebiotics in infants. Acting as the non-digestible food ingredient, HMOs help to promote the sought-after microbial flora by functioning as feed for the beneficial bacteria in the intestine.
Both Glycom and DSM center on creating and commercializing HMOs, in an effort to answer consumer demands for positive immune and cognitive development.
Suggesting a key reason for its focus on HMOs, DSM emphasizes that children who get the right nutrition in the first 1000 days are “10 times more likely to overcome life-threatening childhood diseases." The first 1000 days comprise the pre-pregnancy to birth, birth to six months and six months to two years stages of early life nutrition.
Expanding target markets
DSM’s current early life nutrition products include nutritional lipids, vitamins and nutrient premixes. Following the acquisition, the company will add HMOs to its early life nutrition offering as it makes strides towards optimizing infant nutrition.
In addition to focusing on infant nutrition, DSM will also target other key markets, such as toddlers, children and adults. It also plans to launch its HMO products in non-infant nutrition markets such as dietary supplements and medical nutrition.
Anticipating significant growth
Amid the acquisition, DSM’s decision appears to have been influenced by the expected growth of the HMO market in the near future. In the company's investor presentation, it reveals that while the HMO market currently sits at approximately $109 million (€100m), it is anticipated to ”quadruple in the coming five years."
Early life nutrition producers embracing HMOs, rising inclusion rates, increased segment penetration, new HMOs and the approval in other regions are expected to fuel this growth.
HMOs’ beneficial properties
In the infant nutrition space, DSM states that clinical evidence backs the benefits of adding HMOs to an infant’s nutritional intake. The company found that HMOs support the development of a healthy digestive system, produce well-balanced gut microbiota, protect the infant from infections, aid the development of strong immune function potential and help brain development and memory development.
“Glycom's HMOs have been clinically tested and have proven to be safe and beneficial,” DSM stated. Working together, Glycom and Nestle's clinical trials revealed that during the first 12 months of an infant’s life, there was a significant reduction in bronchitis and respiratory tract infections, along with a reduced use of antibiotics and fever-reducing medicine.
Extending beyond infant nutrition, DSM identifies “emerging evidence” that supports the wider potential of HMOs for adults. These core capabilities include: Functional gastrointestinal diseases, including Irritable Bowel Syndrome (IBS); metabolic diseases: obesity and comorbidities; a reduction in the consequences of antibiotic treatment; and allergies and intolerances.
Acquisition plans
With the transaction anticipated to close in Q2 2020, Geraldine Matchett and Dimitri de Vreeze Co-CEOs of Royal DSM, revealed that its acquisition of Glycom marked an “attractive and logical next step” for the company; one that would enable it to provide “innovative early life nutrition solutions."