Elanco Animal Health Inc. ELAN, -0.41% said Monday it has agreed to sell its aqua business to Merck Animal Health MRK, +0.02% for $1.3 billion in cash. Greenfield, Ind.-based Elanco said the sum is equal to about 7.4 times the estimated 2023 revenue of the Elanco aqua business, which includes products across warm-water and cold-water species such as salmon vaccines. The deal “allows us to prioritize our investments in larger markets with greater earnings potential over the medium and long term, while creat ...

RAHWAY, N.J.--(BUSINESS WIRE)--Merck Animal Health, known as MSD Animal Health outside of the United States and Canada, a division of Merck & Co., Inc., Rahway, N.J., USA (NYSE:MRK), today announced that it has signed a definitive agreement to acquire the aqua business of Elanco Animal Health Incorporated (NYSE: ELAN) for $1.3 billion in cash, consisting of an innovative portfolio of medicines and vaccines, nutritionals and supplements for aquatic species; two related aqua manufacturing facilities in Canada ...

Transaction reinforces Elanco's commitment to most significant value creation opportunities in pet health and livestock sustainability Enables company to accelerate debt paydown by $1.05B to $1.1B GREENFIELD, Ind., Feb. 5, 2024 /PRNewswire/ -- Elanco Animal Health Incorporated (NYSE: ELAN) today announced it has entered into an agreement to sell its aqua business to Merck Animal Health (NYSE: MRK) for approximately $1.3 billion in cash, which represents approximately 7.4x the estimated 2023 revenue of the E ...

Calling all Veterinarians and Pet Lovers - Take the "Defend Puppies. Defeat Parvo." Pledge Today to Save Puppies from Deadly Canine Parvovirus GREENFIELD, Ind., Jan. 17, 2024 /PRNewswire/ -- Elanco Animal Health Incorporated (NYSE: ELAN) today launched the first-of-its-kind, multi-year campaign to save 1 million puppies from unnecessary death from the highly contagious canine parvovirus (parvo). The Defend Puppies. Defeat Parvo. mission seeks to conquer a virus that, without timely and aggressive care, has ...

ORLANDO, Fla.--(BUSINESS WIRE)--The Feather in Her Cap Association, Inc. and 300 industry leaders honored 11 women for their outstanding career achievements in Animal Health at the seventh annual Feather in Her Cap awards ceremony. Andrea J. Gonzales Ph.D., vice president of Global Companion Animal Therapeutics at Zoetis, Inc., (NYSE: ZTS) was awarded the 2024 Feather in Her Cap award and Katharina Bohnenblust Ph.D., senior director, head of Formulation Development at Elanco Animal Health (NYSE: ELAN) was t ...

Elanco Animal Health Incorporated (ELAN) shares rallied 6.2% in the last trading session to close at $15.45. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 13.9% gain over the past four weeks.Elanco Animal Health Incorporated recorded a strong price increase after it announced Lawrence E. Kurzius as its next Chairman of the Board, effective at the conclusion of the company's 2024 Annual Meeting of Shareholde ...

Lawrence Kurzius to become next Chairman of the Board GREENFIELD, Ind., Jan. 2, 2024 /PRNewswire/ -- Elanco Animal Health Incorporated (NYSE: ELAN) announced today that the Board of Directors has named Lawrence E. Kurzius as its next Chairman of the Board, effective at the conclusion of the Company's 2024 Annual Meeting of Shareholders.  Mr. Kurzius, a member of the Elanco Board since 2018, will succeed current Chairman, R. David Hoover, who will remain on the Board as an independent director. "It has been ...

Business: Elanco is an animal health company that delivers products and services to prevent and treat disease in farm animals and pets. Its portfolio serves animals across its core species and offers products in two categories: Pet Health, which is focused on parasiticides, vaccines and therapeutics; and Farm Animal, which consists of products designed to prevent, control and treat health challenges primarily focused on cattle.Activist Commentary: Ancora is not an activist investor. It is primarily a family ...

Financial Data and Key Metrics Changes - The company reported a revenue of $1.068 billion, representing a 4% reported growth or 5% in constant currency, with foreign exchange rates presenting a headwind of $5 million compared to the third quarter of 2022 [77][34] - Adjusted EBITDA was $214 million, an increase of 5% compared to the third quarter of 2022, while adjusted EPS was $0.18, reflecting a 6% increase [51][34] - The company raised the midpoint of its constant currency revenue growth guidance, now expecting flat to 1% growth for the year, along with increased guidance for adjusted EBITDA and adjusted EPS despite increasing FX headwinds [24][86] Business Line Data and Key Metrics Changes - Total Pet Health revenue grew 6% in the third quarter, driven by price growth of 4%, while U.S. Pet Health revenue was flat due to competitive pressures [47][64] - International Pet Health experienced a 16% constant currency revenue growth, attributed to a better economic environment in Europe and expanded commercial capabilities [36][78] - Farm Animal revenue grew 4% in constant currency, with U.S. Farm Animal revenue increasing by 2%, primarily driven by innovation [79][66] Market Data and Key Metrics Changes - The company noted that only about 18% of its total global business is sold to U.S. vet clinics, indicating limited sensitivity to vet visit trends [35] - The international Farm Animal segment saw a 5% constant currency revenue growth, driven by strong underlying markets in cattle and poultry [26][79] - The OTC market for retail channels grew by 10% year-to-date, highlighting resilience in the market [25][34] Company Strategy and Development Direction - The company is focusing on a differentiated global omnichannel approach, leveraging its diverse portfolio and enhancing capabilities to drive topline growth [23][89] - There is a strong emphasis on innovation, with three late-stage potential blockbuster products expected to contribute to growth in 2024 [39][114] - The company is expanding its U.S. Pet Health sales team by 25% to deepen relationships with veterinary clinics and enhance market penetration [70][96] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage competitive pressures and macroeconomic headwinds, emphasizing a resilient market for pet health products [8][11] - The company anticipates continued price growth and stabilization of core volumes, supported by its omnichannel strategy [89][88] - Management highlighted the importance of innovation and customer focus as key drivers for sustainable growth moving forward [13][14] Other Important Information - The company has nearly completed the cash outlay necessary for project costs related to systems integration, expecting improved operating cash flow next year [27][84] - Interest expense was reported at $72 million, an increase of $14 million year-over-year due to higher interest rates, but the company has 76% of its debt fixed [51][10] - The company recorded a non-cash pretax goodwill impairment charge impacting reported EPS by $2.10, which was excluded from non-GAAP measures [54][86] Q&A Session Summary Question: What is the most important uncertainty or risk factor for 2024? - Management identified competition, regulatory challenges, and macroeconomic headwinds as key uncertainties for 2024 [8][17] Question: Can you elaborate on the trends in the retail business? - Management noted that the OTC business is growing, with a focus on expanding physical availability in various retail channels [105][104] Question: How is the company preparing for multiple product launches? - The company is ramping up its sales force and establishing relationships with clinics to ensure readiness for upcoming product launches [142][128] Question: What are the expectations for revenue growth in 2024? - Management committed to constant currency revenue growth for 2024, excluding contributions from potential blockbuster products [127][122]

Revenue Performance - Revenue for Q3 2023 was $1,068 million, a 4% increase from $1,026 million in Q3 2022[114] - Pet Health revenue increased by 6% to $495 million in Q3 2023, while Farm Animal revenue rose by 3% to $561 million[117] - Total revenue for the nine months ended September 30, 2023, was $3,382 million, a decrease of $44 million or 1% compared to the same period in 2022[118] - Pet Health revenue for the three months ended September 30, 2023, increased by $26 million or 6%, driven by increased pricing and improved market conditions in Europe[120] - Farm Animal revenue for the three months ended September 30, 2023, increased by $16 million or 3%, supported by higher volumes and pricing, despite foreign exchange impacts[121] Financial Losses and Impairments - The company incurred a $1,042 million pre-tax goodwill impairment charge due to rising long-term treasury rates in Q3 2023[111] - The company experienced a net loss of $1,096 million in Q3 2023, compared to a net loss of $65 million in Q3 2022[114] - Goodwill impairment for the nine months ended September 30, 2023, resulted in a pre-tax charge of $1,042 million due to increased discount rate assumptions[130] - A goodwill impairment charge of $1,042 million was recognized as of September 30, 2023, due to increased long-term treasury rates impacting the fair value of the reporting unit[148] Costs and Expenses - Integration costs related to the acquisition of Bayer Animal Health totaled $86 million during the nine months ended September 30, 2023[104] - Research and development expenses increased by 10% to $86 million in Q3 2023, representing 8% of revenue[114] - Research and development expenses for the nine months ended September 30, 2023, increased by $7 million or 3%, primarily due to higher employee-related expenses[124] - Marketing, selling, and administrative expenses for the nine months ended September 30, 2023, increased by $30 million or 3%, driven by higher marketing and promotional spend[125] - Amortization of intangible assets for the nine months ended September 30, 2023, increased by $12 million or 3%, due to acquisitions and foreign exchange impacts[126] - Asset impairment, restructuring, and other special charges for the nine months ended September 30, 2023, decreased by $61 million or 40%, primarily due to a prior year charge that did not recur[128] - Interest expense for the nine months ended September 30, 2023, increased by $31 million or 17%, primarily due to higher interest rates on outstanding debt[131] Taxation - The company recognized an income tax benefit of $1 million for Q3 2023, compared to an expense of $21 million in Q3 2022, resulting in an effective tax rate of 0.2% versus (47.7)% in the prior year[133] - For the nine months ended September 30, 2023, income tax expense decreased by $19 million, with an effective tax rate of (2.0)%, down from 234% in the same period last year[134] Cash Flow and Liquidity - Cash provided by operating activities decreased by $325 million to $114 million for the nine months ended September 30, 2023, compared to $439 million in the prior year[139] - Cash used for investing activities increased to $134 million for the nine months ended September 30, 2023, primarily due to $19 million paid for acquisitions of NutriQuest assets[140] - Cash provided by financing activities was $56 million for the nine months ended September 30, 2023, a turnaround from cash used of $465 million in the same period last year[141] - The company had cash and cash equivalents of $369 million and unused borrowing capacity of approximately $453 million as of September 30, 2023[136] Foreign Currency and Global Operations - Approximately 51% of revenue for the nine months ended September 30, 2023, was denominated in foreign currencies, impacting revenue by a decrease of 1% for Q3 2023[115] - Revenue from Russian and Ukrainian customers represented approximately 1% of consolidated revenue during the nine months ended September 30, 2023[106] - The application of hyperinflationary accounting for subsidiaries in Argentina and Turkey resulted in approximately $13 million of foreign currency-related expense during the nine months ended September 30, 2023[151] - The company intends to indefinitely reinvest foreign earnings for continued use in foreign operations, with potential changes based on tax-efficient reinvestment alternatives[135] Product Innovation - The company launched a canine parvovirus monoclonal antibody in July 2023, marking a significant product innovation[108]