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Nestlé in society Creating Shared Value and meeting our commitments 2015

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<strong>Nestlé</strong> <strong>in</strong> <strong>society</strong>:<br />

Creat<strong>in</strong>g <strong>Shared</strong> <strong>Value</strong><br />

Nutrition, health<br />

<strong>and</strong> wellness<br />

Rural development<br />

Water<br />

Environmental<br />

susta<strong>in</strong>ability<br />

Human rights<br />

<strong>and</strong> compliance<br />

Our<br />

people<br />

Novel Therapeutic Nutrition<br />

We <strong>in</strong>vested <strong>in</strong> Seres Therapeutics, a leader <strong>in</strong> develop<strong>in</strong>g a<br />

new class of biological drugs designed to treat diseases by<br />

restor<strong>in</strong>g gut function. One development that <strong>our</strong> <strong>in</strong>vestment<br />

supports is phase III trials of SER-109, for the prevention of<br />

recurrent Clostridium difficile <strong>in</strong>fection (CDI) <strong>in</strong> adults – a<br />

condition that affects 85 000 to 110 000 patients <strong>in</strong> the United<br />

States alone <strong>and</strong> is caused by antibiotic disruption of the gut<br />

microbiome. The FDA designated SER-109 an orphan drug <strong>and</strong><br />

a breakthrough therapy <strong>in</strong> <strong>2015</strong>.<br />

In January 2016, <strong>Nestlé</strong> Health Science signed an exclusive<br />

agreement outside the United States <strong>and</strong> Canada for Seres<br />

Therapeutics’ novel class of microbiome therapeutics<br />

(Ecobiotics®) <strong>in</strong> the fields of Clostridium difficile <strong>in</strong>fections (CDI,<br />

such as SER-109 <strong>and</strong> SER-262) <strong>and</strong> <strong>in</strong>flammatory bowel disease<br />

(IBD; such as SER-287 <strong>and</strong> SER-301). The agreement follows<br />

<strong>Nestlé</strong> Health Science’s <strong>in</strong>itial equity <strong>in</strong>vestments <strong>in</strong> US-based<br />

Seres Therapeutics announced <strong>in</strong> January <strong>and</strong> July <strong>2015</strong>.<br />

• Nutrition Science Partners, a jo<strong>in</strong>t venture explor<strong>in</strong>g the<br />

potential of botanical-based nutrients for gastro<strong>in</strong>test<strong>in</strong>al<br />

disorders;<br />

• Accera, which supports nutritional therapy trials for<br />

Alzheimer’s sufferers (<strong>in</strong> which <strong>Nestlé</strong> has a m<strong>in</strong>ority stake);<br />

• Seres Therapeutics, develop<strong>in</strong>g microbiome therapeutics<br />

focused on IBD <strong>and</strong> C. diff (a GI <strong>in</strong>fectious disease) – are all<br />

<strong>in</strong>teract<strong>in</strong>g with the gut microbiota;<br />

• Lipid Therapeutics, develop<strong>in</strong>g a novel barrier function<br />

therapy for patients with mild-to-moderate ulcerative colitis;<br />

<strong>and</strong><br />

• Pronutria Biosciences (announced on 23 February 2016),<br />

develop<strong>in</strong>g am<strong>in</strong>o acid biologics, Pronutre<strong>in</strong>s TM , target<strong>in</strong>g<br />

irregularities <strong>in</strong> am<strong>in</strong>o acids, <strong>in</strong>creas<strong>in</strong>gly known to have<br />

underly<strong>in</strong>g associations with a range of conditions.<br />

<strong>Nestlé</strong> Sk<strong>in</strong> Health<br />

Support<strong>in</strong>g new therapies<br />

More than 1 million people worldwide are estimated to suffer<br />

from ulcerative colitis, a chronic <strong>and</strong> debilitat<strong>in</strong>g <strong>in</strong>flammatory<br />

condition of the large <strong>in</strong>test<strong>in</strong>e. It is estimated that 40% of<br />

patients that receive the most common treatment, Mesalaz<strong>in</strong>e,<br />

still suffer ongo<strong>in</strong>g symptoms of the disease.<br />

NHSc has entered <strong>in</strong>to a licence agreement with Lipid<br />

Therapeutics for exclusive rights worldwide (except for Europe<br />

<strong>and</strong> Australia) to LT-02, a novel barrier function therapy for<br />

patients with mild-to-moderate ulcerative colitis. LT-02 can not<br />

only help heal ulcers but also restore the l<strong>in</strong><strong>in</strong>g of the colon wall,<br />

prevent<strong>in</strong>g further occurrences. NHSc plans to start phase III<br />

cl<strong>in</strong>ical trials <strong>in</strong> the United States <strong>in</strong> 2016. We hope to advance<br />

patient outcomes for those who suffer from ulcerative colitis.<br />

Through <strong>in</strong>vestment, <strong>in</strong>novation <strong>and</strong> geographic expansion,<br />

we are accelerat<strong>in</strong>g the growth <strong>and</strong> development of <strong>our</strong><br />

established Consumer Care <strong>and</strong> Medical Nutrition bus<strong>in</strong>ess<br />

areas. Both are operat<strong>in</strong>g <strong>in</strong> grow<strong>in</strong>g markets driven by mega<br />

trends – age<strong>in</strong>g population, cost pressure, self-care, scientific<br />

<strong>and</strong> cl<strong>in</strong>ical advances <strong>and</strong> geographic development. We are<br />

gear<strong>in</strong>g to br<strong>in</strong>g forward breakthrough <strong>in</strong>novations <strong>in</strong> Novel<br />

Therapeutic Nutrition – build<strong>in</strong>g a portfolio of cl<strong>in</strong>ically proven<br />

nutritionally based <strong>in</strong>novations with a more direct therapeutic<br />

impact <strong>and</strong> known mode of action. We aim to address unmet<br />

needs. S<strong>in</strong>ce its creation, NHSc has made acquisitions <strong>and</strong><br />

forged a number of partnerships s<strong>in</strong>ce 2011. These <strong>in</strong>clude:<br />

• Vitaflo, specialists <strong>in</strong> treat<strong>in</strong>g genetically <strong>in</strong>herited<br />

metabolic disorders;<br />

• Prometheus Laboratories, a provider of diagnostics<br />

<strong>and</strong> pharmaceuticals <strong>in</strong> gastroenterology <strong>and</strong> oncology;<br />

• Pamlab, a producer of medical foods for bra<strong>in</strong> <strong>and</strong><br />

metabolic disorders;<br />

Through <strong>Nestlé</strong> Sk<strong>in</strong> Health, we enhance the quality of life by<br />

deliver<strong>in</strong>g science-based solutions for the health of sk<strong>in</strong>, hair <strong>and</strong><br />

nails over the c<strong>our</strong>se of people’s lives.<br />

An estimated 3000 sk<strong>in</strong> diseases are known to exist, more than<br />

for any other organ of the body, <strong>and</strong> approximately 70% of people<br />

are affected by these conditions at some po<strong>in</strong>t <strong>in</strong> (if not for all of)<br />

their lives. Our <strong>in</strong>novative products <strong>and</strong> solutions are designed to<br />

protect, n<strong>our</strong>ish <strong>and</strong> enhance, as well as treat, correct <strong>and</strong> restore.<br />

<strong>Nestlé</strong> Sk<strong>in</strong> Health was founded <strong>in</strong> June 2014, grow<strong>in</strong>g out of<br />

Galderma, a lead<strong>in</strong>g dermatology company dat<strong>in</strong>g back to 1961. It<br />

employs approximately 6000 people worldwide. <strong>Nestlé</strong> Sk<strong>in</strong><br />

Health provides both the healthcare community <strong>and</strong> the<br />

consumer with an ongo<strong>in</strong>g progression of <strong>in</strong>novative technologies<br />

<strong>and</strong> products to protect, serve <strong>and</strong> enhance sk<strong>in</strong> health. It<br />

achieves this through Galderma, its medical solutions bus<strong>in</strong>ess,<br />

<strong>and</strong> Consumer Sk<strong>in</strong> Health, through which it aims to br<strong>in</strong>g<br />

science-based <strong>in</strong>novation to the broader market.<br />

Much of <strong>Nestlé</strong> Sk<strong>in</strong> Health’s work depends on product<br />

research <strong>and</strong> development, <strong>and</strong> <strong>our</strong> dedicated Sk<strong>in</strong> Health<br />

R&D division employs more than 700 people for the purpose.<br />

S<strong>in</strong>ce the company’s <strong>in</strong>ception, more than 2000 scientific<br />

publications have been issued <strong>and</strong> more than 6000 patent<br />

applications have been filed. In <strong>2015</strong>, we filed 57 new<br />

applications <strong>and</strong> conducted more than 200 cl<strong>in</strong>ical studies<br />

<strong>in</strong>volv<strong>in</strong>g subjects from around the world.<br />

Exp<strong>and</strong><strong>in</strong>g borders: sk<strong>in</strong> health <strong>and</strong> age<strong>in</strong>g<br />

Advances <strong>in</strong> healthcare <strong>and</strong> technology are result<strong>in</strong>g <strong>in</strong> longer<br />

lives. As people live longer, their needs <strong>and</strong> expectations change.<br />

We want to help people keep healthy sk<strong>in</strong> as they age. <strong>Nestlé</strong> Sk<strong>in</strong><br />

Health works closely with academia <strong>and</strong> <strong>in</strong>stitutions to f<strong>in</strong>d<br />

improved methods for preserv<strong>in</strong>g, restor<strong>in</strong>g <strong>and</strong> ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g<br />

healthy sk<strong>in</strong>. By partner<strong>in</strong>g with healthcare professionals <strong>and</strong><br />

<strong>in</strong>stitutions around the world, we strive to build <strong>and</strong> susta<strong>in</strong> a<br />

strong <strong>and</strong> long-last<strong>in</strong>g dermatology community.<br />

<strong>Nestlé</strong> <strong>in</strong> <strong>society</strong> – Creat<strong>in</strong>g <strong>Shared</strong> <strong>Value</strong> <strong>and</strong> meet<strong>in</strong>g <strong>our</strong> <strong>commitments</strong> <strong>2015</strong> 58

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