iiiii Credelio Quattro-CA1 now joins Credelio (lotilaner) and Credelio CAT (lotilaner) on the list of companion animal treatment options for New World screwworm, with these other products recently receiving FDA Emergency Use Authorization for the treatment of New World screwworm infestations in dogs and cats, respectively. According to USDA, there have been 14 cases of New World screwworm within 400 miles of the U.S.-Mexico border, all of them related to cattle movement. With detection reaching as close as ...

Elanco Investor Day Summary Company Overview - **Company**: Elanco Animal Health - **Event**: 2025 Investor Day - **Focus**: Sustainable growth, innovation, and financial outlook Key Industry Insights - **Animal Health Market**: - Current size: $42 billion, projected to grow to $60 billion in the next decade [13] - Pet market projected to reach $24 billion by 2030, driven by parasiticides [43] - Farm animal market expected to grow to $27 billion, with poultry as a major driver [44] Core Company Strategies - **Sustainable Growth**: - Commitment to mid-single-digit constant currency revenue growth [8] - Focus on innovation with a commitment of $1.1 billion for the next year, aiming to double by 2028 [9][30] - **Innovation Pipeline**: - Introduction of five to six potential blockbusters between 2026 and 2031 [10] - Emphasis on a diverse portfolio with a strong pipeline of new products [30] - **Financial Goals**: - Targeting high single-digit adjusted EBITDA constant currency revenue growth starting in 2026 [11] - Projecting $1 billion in cash flow creation over the next three years [12] Market Trends and Drivers - **Pet Market Trends**: - Increased willingness of pet owners to spend on pet care [17] - Growing decision-making power of pet owners, necessitating CRM data and accessibility [18] - Shift towards omnichannel approaches to reach consumers [19] - **Farm Animal Market Trends**: - Focus on ruminants and poultry due to their durability and growth potential [21] - Emphasis on disease prevention and food safety as key growth areas [22] Financial Performance and Projections - **Recent Performance**: - Nine consecutive quarters of growth, with a stable base business now flat [46] - **Future Projections**: - Anticipated growth from the "Big Six" products, with significant contributions expected by 2026 [47] - Continued expansion in both pet and farm animal segments, leveraging existing strengths [50] Leadership and Organizational Structure - **Executive Team**: - Experienced leadership with a focus on innovation and market growth [36] - Commitment to employee engagement and performance management linked to financial outcomes [40] Additional Insights - **Restructuring Initiatives**: - Recent restructuring aimed at increasing efficiency and capacity [32] - Strategic partnerships and collaborations to enhance product offerings and market reach [55] - **Regulatory Engagement**: - Ongoing constructive dialogue with USDA for product approvals and market entry [34] Conclusion - Elanco is positioned for sustainable growth through a robust innovation pipeline, strategic market engagement, and a commitment to financial discipline. The company aims to leverage its strengths in both the pet and farm animal markets to capture significant growth opportunities in the coming years.

Core Insights - The pet care industry is experiencing rapid growth, prompting pharmaceutical companies to focus on innovative treatments for companion animals [1] Company Performance - Elanco Animal Health Incorporated (NYSE:ELAN) is showing strong momentum with recent product launches, Zenrelia and Credelio Quattro, contributing to significant revenue growth [2] - KeyBanc Capital Markets initiated coverage on Elanco with an Overweight rating and a price forecast of $27, indicating that the shares are currently undervalued [4] - Elanco's trailing leverage ratio has improved from approximately 5.5x in 2023 to around 4x currently, with expectations for further improvement due to increased profitability and cash generation [3] Financial Results - For the third quarter of 2025, Elanco reported adjusted earnings per share of 19 cents, reflecting a 46% year-over-year increase, exceeding both company guidance and consensus estimates [5] - Revenue for the same period reached $1.14 billion, surpassing the consensus estimate of $1.09 billion and management's guidance of $1.08 billion to $1.11 billion [5] Market Performance - Elanco shares increased by 3.84% to $22.05, nearing its 52-week high of $23.09 [6]

So joining me now in a first on CNBC interview is Ela Co. Animal Health CEO Jeff Simmons. Jeff, we've spoken numerous times before.At this point, you know, I have multiple dogs in my household. Like many millions of Americans, we care about their health. What's been driving Ela Co's results, specifically when it comes to the pets versus the farm side of things.>> Yeah, Dom, thanks for the time. Yeah, we delivered a great quarter. 9% organic constant currency growth.That really marks uh nine consecutive quar ...

Core Insights - Ela Co. Animal Health reported a 9% organic constant currency growth, marking nine consecutive quarters of growth, driven by both pet and livestock segments [1][2] - The company experienced its highest quality quarter of growth in three to four years, attributed to innovation in pet health products and strong demand in the livestock sector [3][4] Pet Segment - Pet owners are increasingly willing to spend on innovative health products, particularly in areas like dermatology and pain management for pets [3] - The company has a significant product, Credelo Quattro, which has rapidly gained traction, becoming the fastest product to reach $100 million in sales [7][8] Livestock Segment - The livestock market is benefiting from high protein demand, with the US beef market experiencing a shortage of cattle at a 50-year low, leading to strong beef economics [4] - The company is focusing on ruminant markets, including dairy, beef, and poultry, as key growth areas [9] Innovation and Product Pipeline - Ela Co. emphasizes innovation as the primary driver of growth, with a diverse portfolio across multiple species and therapeutic classes [6][7] - The company plans to discuss its strategies for the ruminant, poultry, and pet markets during an upcoming investor day [9]

Financial Data and Key Metrics Changes - Elanco reported revenue of $1.137 billion for Q3 2025, representing a 10% increase on a reported basis and 9% organic constant currency growth, primarily driven by volume increases [23][24] - Adjusted EBITDA was $198 million, an increase of $35 million year-over-year, while adjusted EPS rose to $0.19, up $0.06 from the previous year [25] - The net leverage ratio improved to 3.7x, better than expectations, with a target to end the year between 3.7x and 3.8x [6][25] Business Line Data and Key Metrics Changes - U.S. Pet Health revenue grew by 9%, driven by key innovation products like Credelio Quattro and Zenrelia, while international pet health achieved 8% growth [7][23] - U.S. Farm Animal business saw a significant 20% growth, supported by strong performance in cattle and poultry vaccines, while international farm animal grew by 5% [8][23] - Innovation revenue reached $655 million year-to-date, with an increase in guidance for innovation revenue to $840 million-$880 million for the full year [5][9] Market Data and Key Metrics Changes - The U.S. broad spectrum endecto market is currently valued at $1.4 billion, growing at nearly 40%, with Credelio Quattro capturing significant market share [10][40] - The global dermatology market for Zenrelia is estimated at $2 billion, with Elanco capturing approximately 5% market share in launched countries [13][16] - The farm animal market is experiencing strong demand for protein, with a resurgence in the U.S. dairy industry and favorable producer economics driving growth [72] Company Strategy and Development Direction - Elanco's strategy focuses on innovation, portfolio management, and productivity, with a commitment to driving shareholder value through consistent growth and operational execution [6][22] - The company is expanding its product offerings and geographic reach, particularly with the international rollout of Credelio Quattro and Zenrelia [10][13] - Elanco aims to improve its net leverage ratio to under 3x by 2027, supported by a disciplined capital allocation strategy focused on debt paydown [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic challenges, with expectations for continued growth in both pet and farm animal segments [7][32] - The company anticipates a stable operating environment, with a focus on leveraging innovation to mitigate potential declines in vet visit volumes [56][57] - Elanco's management highlighted the importance of maintaining a competitive edge through differentiated products and strategic investments in marketing and distribution [66][72] Other Important Information - Elanco successfully refinanced its $2.1 billion term loan B facility, extending maturities and reducing the cost of debt [26][27] - The company is on track for significant operational efficiencies through the Elanco Ascend initiative, which aims to enhance productivity across various functions [22][66] Q&A Session Summary Question: Clarification on Quattro's sales and peak potential - Management clarified that Credelio Quattro reached $100 million in sales year-to-date as of September, indicating strong market potential and differentiation [37][38] Question: U.S. label aspirations for Zenrelia - Management discussed ongoing efforts to improve Zenrelia's label in the U.S. and the positive momentum in international markets, highlighting strong market share gains [43][45] Question: 2025 EBITDA guidance and OpEx investments - Management confirmed the increase in EBITDA guidance and emphasized a data-driven approach to ongoing investments in innovation and marketing [49][50] Question: Consumer macro pressure and vet visit trends - Management noted that while vet visits are stabilizing, Elanco's diversified portfolio and strong market presence position the company well against macro pressures [53][56] Question: Competitive landscape in derm and parasiticides - Management indicated that competition is accounted for in guidance, with no significant impact observed from new entrants in the parasiticide market [76][77]

Financial Data and Key Metrics Changes - Elanco reported revenue of $1.137 billion for Q3 2025, representing a 10% increase on a reported basis and 9% organic constant currency growth, primarily driven by volume increases [23][24] - Adjusted EBITDA was $198 million, an increase of $35 million year-over-year, while adjusted EPS rose to $0.19, up $0.06 from the previous year [25][29] - The net leverage ratio improved to 3.7x, better than expectations, with a target to end the year between 3.7x and 3.8x [6][25] Business Line Data and Key Metrics Changes - U.S. Pet Health revenue grew by 9%, driven by key products like Credelio Quattro and Zenrelia, while international pet health achieved 8% growth [7][23] - U.S. Farm Animal business saw a significant 20% growth, bolstered by strong performance in cattle and poultry vaccines, while international farm animal grew by 5% [8][24] - Innovation revenue reached $655 million year-to-date, with an increase in guidance for innovation revenue to $840 million-$880 million [5][9] Market Data and Key Metrics Changes - The U.S. broad spectrum endecto market is valued at $1.4 billion and is growing at nearly 40%, with Credelio Quattro capturing significant market share [10][40] - The global dermatology market is estimated at $2 billion, with Zenrelia gaining approximately 5% market share in launched countries [13][16] - The farm animal market is experiencing strong demand for protein, with a resurgence in the U.S. dairy industry and a historically small cattle herd size driving producer economics [72][73] Company Strategy and Development Direction - Elanco's strategy focuses on growth, innovation, and cash management, with a commitment to raising guidance based on strong underlying momentum [5][7] - The company is leveraging its diverse portfolio of innovative products to stabilize its base business and drive overall industry-leading growth [21][22] - The Elanco Ascend initiative aims to enhance productivity and efficiency across the organization, contributing to margin expansion starting in 2026 [22][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic challenges, citing strong execution and proactive mitigation strategies for tariff risks [6][32] - The outlook for 2026 includes expectations for continued revenue growth driven by innovation and a stabilizing base, despite competitive pressures [30][31] - Management highlighted the importance of maintaining a balanced approach to guidance, considering competition and macroeconomic factors [57][59] Other Important Information - The company successfully refinanced its $2.1 billion term loan B facility, extending maturities and reducing the cost of debt [26][27] - Elanco plans to provide more insights into its strategy and financial outlook during the upcoming investor day on December 9 [34][78] Q&A Session Summary Question: Clarification on Credelio Quattro's sales - Credelio Quattro reached $100 million in sales year-to-date as of September, indicating strong market potential and differentiation [37][38] Question: U.S. label aspirations for Zenrelia - Management is optimistic about achieving a cleaner label for Zenrelia, supported by positive data and increasing market share in international markets [44][46] Question: 2025 EBITDA guidance and OpEx investments - The updated EBITDA guidance reflects strong performance and continued investments in innovation, with a focus on data-driven decision-making [48][50] Question: Consumer macro pressure and vet visit trends - Management believes that the company is insulated from declines in vet visits due to strong market fundamentals and a diversified portfolio [56][59] Question: Sustainability of livestock growth - The demand for protein is expected to remain strong, with Elanco's strategy focusing on innovation and competitive advantages in the livestock market [72][74]

Financial Data and Key Metrics Changes - Elanco reported revenue of $1.137 billion for Q3 2025, representing a 10% increase on a reported basis and 9% organic constant currency growth, primarily driven by volume increases [20][21] - Adjusted EBITDA was $198 million, an increase of $35 million year-over-year, while adjusted EPS rose to $0.19, up $0.06 from the previous year [22] - The net leverage ratio improved to 3.7 times, better than expectations, with a goal to end the year between 3.7-3.8 times [5][22] Business Line Data and Key Metrics Changes - U.S. Pet Health revenue grew by 9%, driven by key products like Credelio Quattro and Zenrelia, while international pet health saw an 8% increase [20][21] - U.S. Farm Animal business achieved a remarkable 20% growth, supported by strong performance in cattle and poultry vaccines [20][21] - International Farm Animal revenue increased by 5%, with growth attributed to poultry and ruminants [7][20] Market Data and Key Metrics Changes - The overall pet health market in the U.S. is experiencing strong growth, with the broad spectrum endecto market reaching $1.4 billion and growing at nearly 40% [9][34] - The global dermatology market is also expanding, with Zenrelia capturing approximately 5% market share in countries where it has launched [12][14] - The farm animal sector is benefiting from a historically small U.S. cattle herd, driving demand for products like Experior, which grew 70% in Q3 [15][51] Company Strategy and Development Direction - Elanco is focused on innovation, portfolio management, and productivity, with a strong emphasis on cash generation and operational execution [4][19] - The company is raising its full-year expectations for innovation revenue to $840 million-$880 million, reflecting broad-based momentum across its product portfolio [4][6] - The strategy includes geographic expansion and leveraging differentiated products to capture market share in both pet and farm animal segments [7][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic challenges, including tariff impacts, while maintaining strong growth momentum [5][25] - The outlook for 2026 includes expectations for continued revenue growth driven by innovation and a stabilizing base business, despite competitive pressures [27][28] - Management highlighted the importance of maintaining a balanced approach to guidance, considering both competitive dynamics and macroeconomic factors [41][42] Other Important Information - The company successfully refinanced its $2.1 billion term loan B facility, extending maturities and reducing the cost of debt [5][23] - Elanco's innovation pipeline is robust, with several products expected to launch in 2026, including IL31, which is currently under USDA review [17][19] - The company is committed to enhancing productivity through initiatives like Elanco Ascend, aimed at driving efficiencies across the organization [19][49] Q&A Session Summary Question: Clarification on Credelio Quattro's sales - Management clarified that Credelio Quattro reached $100 million in net sales since its launch, not just in Q3, and expressed optimism about its potential peak sales [31][34] Question: Insights on Zenrelia's label update and market share - Management discussed the positive momentum for Zenrelia, highlighting its growing market share and the recent removal of vaccine-induced disease language from its label [35][36] Question: 2025 EBITDA guidance and OpEx investments - Management confirmed the increase in EBITDA guidance and discussed the ongoing investments in operational expenses to support product launches and growth [38][39] Question: Competitive landscape and market dynamics - Management acknowledged the competitive pressures in the derm and parasiticides markets but emphasized that their differentiated portfolio has allowed them to maintain market share [53]

Financial Performance - Q3 2025 revenue reached $1.137 billion, a 10% increase compared to $1.030 billion in Q3 2024[32] - Organic constant currency (CC) revenue growth was 9%, driven by a 20% increase in U S Farm Animal and a 9% increase in U S Pet Health[9, 12] - Adjusted EBITDA for Q3 2025 was $198 million, up 21% from $163 million in Q3 2024[34] - Adjusted earnings per share (EPS) increased by 46% to $0 19, compared to $0 13 in Q3 2024[34] Innovation and Portfolio - Year-to-date (YTD) innovation revenue contribution was $655 million, with the 2025 target raised to $840-$880 million[9, 15] - Innovation sales target raised to deliver an incremental $840-$880 million, compared to $275 million in 2024[14, 15] Financial Guidance and Outlook - The company is increasing expected organic CC revenue growth to 6%-6 5%, with adjusted EBITDA of $880-$900 million and adjusted EPS of $0 91-$0 94 for 2025[10] - Full year revenue guidance is $4 645 - $4 670 billion, expecting 6%-6 5% organic CC growth[54] - The company expects an end-of-year net leverage ratio of 3 7x-3 8x[9, 41] Debt and Capital Allocation - Net debt decreased by $153 million in Q3 2025[41] - Refinanced $2 1 billion Term Loan B, extending maturity and lowering the cost of debt[9, 51]

Core Insights - Elanco Animal Health Incorporated reported strong financial results for Q3 2025, exceeding expectations with a focus on growth, innovation, and cash management [2][3] - The company raised its full-year revenue guidance to a range of $4,645 million to $4,670 million, reflecting an expected organic constant currency revenue growth of 6% to 6.5% [7][20] - Elanco's net leverage ratio target for year-end 2025 has been improved to 3.7x to 3.8x, demonstrating effective debt management and cash generation [3][19] Financial Performance - Total revenue for Q3 2025 was $1,137 million, a 10% increase year-over-year, with 9% organic constant currency growth [9][11] - Pet Health revenue reached $533 million, up 10% year-over-year, while Farm Animal revenue was $593 million, reflecting a 12% increase [10][11] - Adjusted EBITDA for Q3 2025 was $198 million, a 21% increase compared to Q3 2024, with an adjusted EBITDA margin of 17.5% [18] Product Innovation and Market Performance - Credelio Quattro achieved $100 million in net sales within eight months, marking it as Elanco's fastest pet health blockbuster [8] - Zenrelia's global sales nearly doubled compared to Q2 2025, with a market share of approximately 5% in launched countries [8] - Experior sales increased by approximately 70% year-over-year, and AdTab continued its growth trajectory with over 25% year-over-year sales increase [8] Cost Management and Operational Efficiency - Total operating expenses for Q3 2025 were $440 million, a 7% increase year-over-year, driven by strategic investments in new product launches [13] - Gross profit was $607 million, with a gross margin percentage of 53.4%, reflecting a 120 basis point increase compared to Q3 2024 [12] - The company successfully refinanced its $2.1 billion Term Loan B debt facility, improving its debt maturity profile and reducing interest costs [8] Guidance and Future Outlook - For the full year 2025, Elanco expects reported net loss to be between $56 million and $41 million, with adjusted EPS guidance raised to a range of $0.91 to $0.94 [7][21] - The company anticipates a revenue tailwind of approximately $30 million from favorable foreign exchange rates compared to previous guidance [21] - Elanco plans to host an investment community event on December 9, 2025, to discuss its growth strategies and long-term shareholder value creation [3][20]