(Refiles to remove extraneous Reuters Instrument Code)

ZURICH, Sept 16 (Reuters) - Nestle is working with Lipid Therapeutics to develop and commercialise a new therapeutic treatment for mild-to-moderate ulcerative colitis, which can causes ulcers, bleeding and pain due to inflammation of the colon, the company said on Wednesday.

Nestle Health Science intends to develop an add-on therapy to an existing one that is commonly used but with which 40 percent of patients continue to experience flare-ups, the company said.

The LT-02 compound under development by Nestle can help to heal ulcers and restore lining of the colon wall, reducing chances of the condition returing. The agreement is part of Nestle Health Science's strategy to develop its product portfolio for gastrointestinal diseases, it said.

(Reporting by Brenna Hughes Neghaiwi)