HMO “growth engine”: DSM acquires Glycom for US$826m to boost Early Life nutrition segment

21 Feb 2020 --- Royal DSM has agreed to acquire Glycom A/S (Glycom), a major supplier of Human Milk Oligosaccharides (HMOs) for an enterprise value of €765 million (US$826 million). “The acquisition of Glycom, adds HMOs to our portfolio, a novel high-growth ingredient for next generation Early Life Nutrition solutions. It also enables us to accelerate growth and provide customers with innovative solutions for our Human Nutrition Business,” a DSM spokesperson tells NutritionInsight. The transaction is expected to close in the second quarter of 2020.

“DSM is acquiring Glycom as a growth engine. Competencies are complementary and will help to accelerate the growth of Glycom. The market for HMOs is currently around €100 million (US$108 million) and is expected to quadruple in the coming five years driven by large Early Life nutrition producers adopting HMOs, increased inclusion rates, increased segment penetration, new HMOs introduced, approvals in other regions and the launch of HMO solution in non-infant nutrition markets such as dietary supplements, medical nutrition and pet care,” the spokesperson adds.

“Joining DSM enables us to accelerate our growth and integrate our HMO products in DSM’s full solutions offering for Infant Nutrition customers. Furthermore, it also creates leverage with DSM’s strong R&D platform and clinical competencies to support development of Glycom’s next generation HMOs. DSM is a great home for Glycom to reach its full potential,” Odd Erik Hansen, CEO of Glycom comments.

HMOs are a collection of carbohydrate structures found in human breast milk. They act as prebiotics in infants, which help to develop beneficial microbial flora by serving as feed for the good bacteria in the intestine. They are essential for both immune and cognitive development, the company says.

DSM is a global solutions supplier to the Early Life Nutrition industry with its portfolio of, for example, nutritional lipids, vitamins and nutrient premixes. With the acquisition of Glycom, DSM adds a novel high-growth ingredient to its portfolio that will boost its reach and client base.

Joining DSM enables Glycom to accelerate growth and integrate its HMO products in DSM’s full solutions offering for Infant Nutrition customers.Danish Glycom, founded in 2005, instigated the development and commercialization of HMOs for Early Life Nutrition applications. The company operates a manufacturing plant in Esbjerg and is the only fully-integrated HMO provider in the world with its own product development, preclinical and clinical development, regulatory and large-scale production with an innovation roadmap for next-generation HMOs.

In 2019, Glycom achieved €74 million (US$79 million) of sales, most of which were predominantly generated with Nestlé. Going forward, Nestlé will continue to be an important customer in the future.

DSM can accelerate the HMO product development of Glycom by leveraging its strong R&D platform and clinical competencies to support Glycom’s development of next generation HMOs.

Accordingly, DSM can furthermore introduce HMOs in other segments outside the Early Life Nutrition market, for instance for toddlers, children and adults, as well as in the medical nutrition and the pet food segments, creating additional growth potential.

“We are looking forward to welcoming Glycom to DSM. Our companies have a great fit together, with a shared passion for purpose-led and science-based solutions in Nutrition and Health. This acquisition is an attractive and logical next step for DSM enabling us to provide our customers with innovative Early Life Nutrition solutions in our Human Nutrition business,” reads a joint statement by Geraldine Matchett and Dimitri de Vreeze Co-CEOs of DSM.

Most recently, the EU Commission (EC) granted Novel Food status to Danish biotechnology company Glycom for its 2’-Fucosyllactose/Difucosyllactose mixture (2’-FL/DFL). With this greenlight, Glycom is able to use this HMO in a variety of uses on the EU market, including as a dietary supplement and in infant formula.

By Kristiana Lalou

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