Enriching Life Food and Companionship Investor Overview | May 2025 Notices and Disclaimers Forward-Looking Statements. This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements concerning product launches and revenue from such products, our 2025 full year, long-term expectations, our expectations regarding debt levels, and expectations regarding our industry and our operations, performance and financial condition, and i ...

After years of struggling with market share losses and uneven execution, Elanco Animal Health Incorporated ELAN appears to be turning a corner. What Happened: Investor meetings hosted by William Blair this week gave analysts enough confidence to upgrade the stock, citing a stabilized core business and promising momentum in its innovation pipeline. With new product launches in both livestock and pet health, Elanco is better positioned for growth—though it still faces stiff competition from larger rivals like ...

GREENFIELD, Ind., June 26, 2025 /PRNewswire/ -- Today, Elanco Animal Health Incorporated (NYSE: ELAN) announced the release of its 2024 Impact Report, showcasing its efforts to enhance animal care, not just improving the lives of animals but also the people who care for them. Reflecting on its purpose and strategic alignment, the report introduces a new framework centered on four key communities of impact, celebrating Elanco's culture of 'Going Beyond' for animals, customers, society, and our people.In laun ...

Core Viewpoint - Elanco Animal Health has received a positive opinion from the European Medicines Agency for its product Zenrelia, which is expected to receive marketing authorization in the EU within 60 days [1][2]. Group 1: Product Details - Zenrelia (ilunocitinib) is effective in treating pruritus associated with allergic dermatitis and clinical manifestations of atopic dermatitis in dogs [2]. - The product has already been approved in markets outside the United States, including Brazil, Canada, Japan, and the United States, with additional approvals anticipated in Australia and the United Kingdom in 2025 [3]. Group 2: Regulatory Milestones - The positive opinion from the CVMP is based on the quality, safety, and efficacy data submitted by Elanco, demonstrating a favorable benefit-risk balance [2]. - Elanco has conducted a head-to-head non-inferiority study against the current market leader, yielding positive results [3]. Group 3: Market Launch Expectations - The company expects to launch Zenrelia shortly after receiving marketing authorization, with product supply anticipated in the market before the end of the third quarter of 2025 [3].

Core Insights - Nearly 90% of U.S. dogs are reported as "itchy dogs" by their owners, with over 80% of owners indicating that pollen levels in their cities exacerbate their dogs' itchiness [1][4] - Pet owners spend an average of $173 more and use two additional treatments during allergy season to manage their dogs' itch [1] - There is a significant emotional toll on dog owners, with 75% feeling hopeless when their veterinarian cannot provide relief for their itchy dogs [3] Treatment and Veterinary Insights - Itching is a leading reason for veterinary visits, with owners typically waiting an average of 6 weeks before seeking help [2] - 90% of veterinarians believe that dog owners wait too long to bring in their itchy dogs, leading to more severe skin issues [2] - A majority of dog owners prefer a single daily pill for treatment rather than multiple pills [2] - 75% of dog owners expressed a need for more affordable options to manage their dogs' itch [2] Emotional and Social Impact - 53% of itchy dog owners feel judged by their community, and 75% feel hopeless when treatment is ineffective [3] - Successful treatment of itchy dogs strengthens the bond between veterinarians and pet owners, with 84% of veterinarians noting increased visits for other issues and 70% of owners referring others to their practice [3] Geographic Insights - In the highest human allergy cities, 85% of dogs experience itch during allergy season, compared to 79% of all U.S. dogs [4] - Specific cities exhibit unique trends, such as Memphis, TN, where owners spend an average of $548 year-round on treatments, significantly higher than the national average of $302 [11]

Summary of Elanco Animal Health Conference Call Company Overview - **Company**: Elanco Animal Health - **CEO**: Jeff Simmons - **Event**: Stifel Jaws and Paws Conference 2025 Key Points Leadership Transition - Elanco announced a proactive leadership change with the departure of the CFO Todd, who has been with the company for over six years, to be succeeded by Bob Ben Hinbergen from Hillenbrand, emphasizing a cultural fit and value creation focus [2][4][6] Financial Performance - Elanco reported a solid first quarter with innovation revenue reaching **$198 million** and a **4% growth** in revenue, guiding for **4% to 6% growth** for the year [7][9][12] - The company has absorbed tariff impacts and earmarked **$25 million** of FX EBITDA tailwind for future potential pharma tariffs [7][12] - Cash debt paydown was raised from **$150 million** to between **$450 million and $500 million**, indicating strong cash flow management [12] Innovation and Growth - Elanco has seen **seven consecutive quarters of growth**, driven by innovation across its product portfolio, including products like Experior, Credelio, and AdTap [8][10][11] - The company is focusing on a basket of **six blockbusters** and additional products launched in the last three years to drive growth [11] - Credelio Quattro has captured **10% market share** shortly after launch, indicating strong market acceptance [29][30] Market Dynamics - The OTC business experienced a decline in January and February due to cold weather but rebounded in March and April, continuing into May [13][16] - Elanco's distribution strategy has expanded to include retailers like Tractor Supply and Target, enhancing accessibility for pet owners [16][17] Product Development - ZENRELIA is positioned for growth with a focus on changing language on labels to enhance vet adoption, with **11,000 vet clinics** currently using the product [41][42] - The company anticipates a significant market opportunity in the derm category, projected to exceed **$2 billion** [45] Margin Expansion Strategy - Elanco is implementing a company-wide margin expansion approach, focusing on gross-to-net pricing strategies and operational efficiencies [22][58][60] - The company expects to leverage new product launches for improved pricing realization in 2026 [62] Regulatory Environment - Elanco is advocating for streamlined regulatory processes and an exemption from pharma tariffs, emphasizing the unique nature of the animal health industry compared to pharmaceuticals [76][77][78] Future Outlook - The company is optimistic about the growth trajectory in both the pet and farm animal segments, with a focus on innovation and market expansion [70][72] - Elanco aims to solidify its position as a leader in the derm market and capitalize on the growing demand for animal protein [67][70] Additional Insights - The company is closely monitoring weather impacts on sales and is prepared to adjust strategies accordingly [16][17] - Elanco's approach to innovation is multi-faceted, focusing on both product differentiation and market penetration strategies [25][62] This summary encapsulates the key discussions and insights from the Elanco Animal Health conference call, highlighting the company's strategic direction, financial performance, and market opportunities.

Summary of Elanco Animal Health Conference Call Company Overview - **Company**: Elanco Animal Health - **Industry**: Animal Health Key Points and Arguments Financial Performance - Elanco reported a robust Q1 with a **4% constant currency revenue growth**, marking the **seventh consecutive quarter of growth** [4][5] - The company exceeded guidance on revenue, adjusted EBITDA, and adjusted EPS [5] - Revenue guidance was raised to **$660 million to $740 million** for the innovation basket initiated in 2021 [6] Innovation and Product Development - The innovation basket includes six key products contributing significantly to growth, particularly **Quattro**, **Experior**, and **ZENRELIA** [7][8] - **Experior** is identified as having a **$350 million potential market** in North America [8] - ZENRELIA is gaining traction with **11,000 clinics** adopting it, indicating strong market demand in the **$1.9 billion dermatology market** [25][26] - The derm market is expected to grow **double digits**, with ZENRELIA positioned as a leading product [25] Cash Flow and Debt Management - Elanco announced monetizing royalties on the Lotta Lanner asset, bringing in nearly **$300 million** for debt reduction [9] - The company anticipates **$450 million to $500 million** for debt paydown, improving leverage ratios [9] Tariff and Regulatory Environment - Elanco is actively managing tariff impacts, estimating a **$16 million to $20 million** effect primarily from U.S.-China trade relations [10][11] - The company is engaged in discussions with the administration regarding potential tariff exemptions for the animal health industry [16][19] - Regulatory reform discussions are ongoing, with a focus on streamlining processes with the FDA and USDA [17][34] Market Dynamics and Competitive Landscape - The farm animal segment is experiencing growth, with Elanco being a leader in beef, swine, and poultry [73] - The company is optimistic about the protein market, noting a **20% decline** in animal protein alternatives [74] - Elanco's competitive strategy includes leveraging its innovation pipeline and addressing market needs effectively [46][87] Future Outlook - Elanco is focused on expanding its product portfolio, with plans for **seven blockbuster products** in the pipeline [87] - The company is enhancing its distribution strategy, increasing physical availability across various retail channels [90][92] - The outlook for the farm animal segment remains positive, with specific growth anticipated in cattle and poultry, while the pig industry faces challenges [99] Additional Insights - Elanco emphasizes the importance of a stable core business supported by innovation, which is crucial for sustained growth [100] - The company is committed to maintaining a competitive edge through scientific rigor and addressing consumer demands for sustainability [80][81] Conclusion Elanco Animal Health is positioned for continued growth through innovation, effective management of market dynamics, and a strong focus on regulatory engagement. The company's diverse product portfolio and strategic initiatives in the animal health sector are expected to drive future performance.

Financial Data and Key Metrics Changes - Elanco reported revenue of $1,193 million, a decrease of 1% on a reported basis, but achieved organic constant currency growth of 4% compared to Q1 2024 [39][40] - Adjusted EBITDA was $276 million, a decrease of $18 million year-over-year, but increased by $8 million when excluding the impact of the Aqua divestiture and foreign exchange headwinds [44][45] - Adjusted EPS improved to $0.37, driven by a favorable discrete tax rate benefit and interest expense savings from debt reduction [45] Business Line Data and Key Metrics Changes - Total Pet Health revenue increased by 1% in constant currency, with U.S. Pet Health revenue declining by 3% due to a challenging retail environment and soft vaccine demand, while international Pet Health grew by 5% [40][41] - The U.S. Farm Animal business grew by 17%, driven by demand for Experior and the launch of Pradillac, while international Farm Animal business contributed 2% in organic constant currency [42][43] - Innovation revenue reached $198 million in Q1, leading to an increase in full-year expectations for innovation contributions to $660 million to $740 million [7][20] Market Data and Key Metrics Changes - U.S. Retail business declined by 21% in January and February due to adverse weather conditions, but rebounded to a positive 13% growth in March [14][16] - International Pet Health business saw 5% organic constant currency growth, driven by products like AdTab and Credelio [17][18] - The U.S. Farm Animal business experienced significant growth, particularly in cattle, with Experior leading the way [19][31] Company Strategy and Development Direction - Elanco's strategy focuses on innovation, cash management, and a global operating model to navigate external uncertainties [9][10] - The company is committed to maintaining a balanced profile of risks and implementing mitigating strategies to offset tariff impacts and macroeconomic challenges [11][12] - Continued investment in product launches and facility expansions is planned, with a focus on maintaining cost discipline [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on 2025 goals, citing strong Q1 performance and positive trends in March and April [49][53] - The company is closely monitoring consumer spending and macroeconomic conditions, emphasizing its resilience and execution capabilities [104][106] - Management highlighted the growth potential in the animal protein market, indicating a favorable outlook for the farm animal business [106][107] Other Important Information - Elanco raised its full-year revenue guidance due to favorable foreign exchange impacts, maintaining an organic constant currency growth outlook of 4% to 6% [8][47] - The company expects to achieve a net leverage ratio of 3.9 to 4.3 times adjusted EBITDA by year-end, reflecting strong cash generation and debt reduction efforts [37][50] Q&A Session Summary Question: Can you elaborate on the Q2 guidance and the impact of investments on EBITDA? - Management confirmed that Q2 investments are aimed at supporting product launches during the peak parasiticide season, which may dampen near-term EBITDA but are expected to drive revenue growth in the second half [59][60] Question: What is the expected impact of tariffs and the pharma exemption on EBITDA? - Management indicated a potential $25 million EBITDA tailwind from foreign exchange moves, which has not been reflected in guidance due to uncertainty surrounding the pharma exemption [62][64] Question: Can you provide insights on the innovation revenue contributions? - Management highlighted that the overall innovation portfolio, including products like ZENRELIA and Credelio Quattro, is driving growth, with a focus on expanding market share and clinic adoption [71][93] Question: How is the macro environment affecting consumer spending? - Management noted that while monitoring consumer spending is essential, the company is well-positioned to navigate fluctuations due to its diverse product offerings and strong execution capabilities [104][106]

Elanco Animal Health (ELAN) Q1 2025 Earnings Call May 07, 2025 08:00 AM ET Speaker0 Ladies and gentlemen, thank you for standing by. Welcome to Elanco Animal Health's First Quarter twenty twenty five Earnings Conference Call. At this time, all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I would now like to hand the call over to Tiffany Kanaga, Head of Investor Relations. You may begin your conference. Sp ...

Core Insights - Elanco Animal Health Incorporated reported financial results for Q1 2025, exceeding guidance for revenue, adjusted EBITDA, and adjusted EPS, with a 4% organic constant currency revenue growth and a revenue of $1,193 million, a decline of 1% year-over-year [2][4][7] - The company raised its 2025 revenue guidance to a range of $4,510 to $4,580 million, attributing the increase to favorable foreign exchange rates and strong performance in its diverse portfolio [2][19] - Elanco's adjusted net income for Q1 2025 was $184 million, or $0.37 per diluted share, reflecting a 9% increase compared to the same period in 2024 [15][19] Financial Performance - Q1 2025 revenue was $1,193 million, down 1% year-over-year, but showed a 4% organic constant currency growth [4][7] - Reported net income for Q1 2025 was $67 million, compared to $32 million in Q1 2024, with adjusted EBITDA at $276 million, a 6% decrease from the previous year [15][17] - The net leverage ratio as of March 31, 2025, was 4.4x adjusted EBITDA, with an improved year-end target of 3.9x to 4.3x [17][19] Business Segments - Pet Health revenue was $635 million, a decrease of 1% year-over-year, with a 1% increase when excluding foreign exchange impacts [8][9] - Farm Animal revenue was $546 million, down 2% year-over-year, but showed a 7% increase when excluding unfavorable impacts from the aqua divestiture and foreign exchange rates [9][10] - The company achieved approximately 10% dollar share of broad-spectrum sales in U.S. vet clinics for Credelio Quattro™ and over 35% penetration for Zenrelia™ in U.S. clinics [5][6] Guidance and Outlook - For the full year 2025, Elanco expects adjusted EBITDA of $830 to $870 million and adjusted EPS of $0.80 to $0.86, maintaining previous guidance despite macroeconomic uncertainties [19][21] - The company anticipates a revenue headwind of approximately $5 million in Q2 2025 due to unfavorable foreign exchange rates, but expects 4% to 6% organic constant currency revenue growth excluding these impacts [23][24] - Operating expenses are projected to increase by approximately 11% year-over-year in constant currency, driven by strategic investments in the innovation portfolio [23][24]