SWISS food and drinks giant Nestle SA says it plans to invest hundreds of millions of dollars to expand its medicinal nutrition business over the next decade.

Nestle says it is creating a specialized institute in Switzerland and a subsidiary called Nestle Health Science SA "to pioneer a new industry between food and pharma."

The Vevey-based company hopes to develop new foods to treat conditions such as diabetes, obesity, cardiovascular disease and Alzheimer's.

Nestle said the new subsidiary will start operating in January 2011 and be run "at arm's length" from its main food and beverages business.