The decision is in.
Nine months after saying it was contemplating the future of Elanco Animal Health, Eli Lilly and Co. announced July 24 that it would spin off the subsidiary.
Indianapolis-based Eli Lilly stated that it expects to sell 20 percent of Elanco by year’s end through an initial public offering and divest the rest “through a tax-efficient transaction.” The sale would allow Lilly to focus on its human pharmaceutical business.
The parent company had said its options for Elanco were an initial public offering, a merger, a sale or doing nothing.
“Based on our strategic review, we concluded that after-tax value for Lilly shareholders would be maximized by pursuing an initial public offering of Elanco,” said David A. Ricks, Lilly’s chairman and CEO. “We believe this will allow Elanco to efficiently deploy its resources to those growth opportunities that best serve its customers.”
Elanco, which makes drugs and vaccines for companion animals and livestock, had 2017 revenue of $3.09 billion, about 13 percent of Eli Lilly’s $22.9 billion.
Started in 1960 as Elanco Products Co., the subsidiary acquired poultry vaccine maker Lohmann Animal Health and Novartis Animal Health in 2014. Boehringer Ingelheim Vetmedica’s U.S. feline, canine and rabies vaccines were purchased in 2016.
“With more than six decades of expertise in animal health, we are prepared to take this step to become an independent company,” said Jeffrey Simmons, president of Elanco Animal Health.