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 transaction is expected to reduce interest expenses by approximately $10 million, offset by the sale of about $10 million in royalties based on Elanco's initial 2025 guidance [1] Company Overview - Elanco Animal Health is a global leader in animal health, dedicated to innovating and delivering products and services to prevent and treat diseases 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 its core business sales growth in 2025 [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] - Elanco retains rights to all royalty payments on net sales outside the U.S. and any future human applications of lotilaner beyond ophthalmic solutions [4] Strategic Partnerships - The collaboration with Blackstone Life Sciences and Blackstone Credit & Insurance is recognized as a significant investment to support Elanco's goals and the potential impact of XDEMVY on patients [3][9]