Elanco Sells Royalty and Milestone Rights for Lotilaner in Human Health to Blackstone; Accelerates Debt Paydown

Core Insights - Elanco Animal Health announced the sale of future tiered royalties and commercial milestones related to XDEMVY for $295 million in cash, aimed at accelerating debt reduction and achieving a net leverage ratio of 3.9x to 4.3x adjusted EBITDA by the end of 2025 [1][3] - The agreement includes royalties from U.S. net sales of XDEMVY from April 2025 through August 2033, while Elanco retains rights to royalties from sales outside the U.S. and future human applications of lotilaner beyond ophthalmic solutions [4] Company Overview - Elanco is a global leader in animal health, dedicated to innovating products and services for disease prevention and treatment in farm animals and pets, with a 70-year heritage in the industry [7] - The company is focused on high-impact innovation and aims to enhance core business sales growth in 2025, leveraging the cash from the royalty sale to support its deleveraging goals [3] Product Development - Lotilaner was exclusively licensed to Tarsus Pharmaceuticals in 2019 for human health applications, and in 2023, XDEMVY became the first lotilaner-based product approved for human use, specifically for treating Demodex blepharitis [2][4] - The collaboration between Elanco and Tarsus has led to the rapid adoption and commercial success of XDEMVY, addressing a significant health need for patients suffering from a common eyelid disease [3]