In a statement to markets yesterday, Blis chief executive Dr Barry Richardson said Blis and Nestle had agreed to quit the infant nutrition products research, which started in March 2007.
Clinical validation of the product concept, using Blis K12 probiotic, had "proven to be difficult to establish under the conditions studied".
However, since the first study began, a more "robust" Blis K12 probiotic has become commercially available and a new multi-year research and development agreement has begun.
This includes a Nestle option for rights over a "specific application" of the Blis K12 probiotic, Dr Richardson said.
"The exact nature of the current research and option agreement between Blis Technologies and Nestle Nutrition is commercially sensitive and confidential," he said.
Blis was formed in June 2000 to commercialise the use of probiotics, which produce natural antibacterial peptides or proteins able to kill or control the growth of other closely related bacteria, and combat illnesses such as sore throats and colds.
In May last year Blis booked its sixth consecutive full-year loss, posting a before tax loss of $482,000 compared to $488,00 the previous year.
But it remained on a sound footing, having raised about $3 million at the time.
Analysts at the time estimated the $3 million boost could see the company through two to three years of work.
