Sale or merger could be in Elanco’s future
Eli Lilly will conduct a strategic review of its veterinary division.
Parent company Eli Lilly reported Oct. 24 that it is weighing the future of Elanco Animal Health, a veterinary drug and vaccines division that has grown since 2014 through three acquisitions.
The announcement came on the same day that Lilly’s quarterly earnings report showed continued pressure on the veterinary business from competition and lower prices.
Financial analysts have suggested for a while that Lilly consider offloading Elanco. The Wall Street Journal reported that a sale could reap $14 billion to $16 billion for the Indianapolis-based pharmaceutical manufacturer.
The strategic review of Elanco could result in a sale, merger, spinoff or no change, Lilly CEO David A. Ricks said.
“Through acquisitions and organic growth, we’ve grown Elanco to a size and scale that now allows us to consider a variety of options to maximize future value,” Ricks said.
Started in 1960 as Elanco Products Co., the division 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.
The earnings report showed third-quarter revenue at Elanco of $740.6 million, compared with $706.2 million a year earlier, and year-to-date revenue of $2.29 billion, down from $2.32 billion.
A decision about Elanco is expected by mid-2018.