Eli Lilly and Company (LLY) CEO Says Company Keeping Animal Health Business
2/12/2013 7:27:06 AM
Eli Lilly and Co's chief executive said his company had no intention of following Pfizer's lead by spinning off or selling the company's lucrative Elanco animal health unit. "We're comfortable with that business and we're going to keep it," Lilly CEO John Lechleiter said definitively on Monday during a question and answer session at the BIO CEO & Investor conference in New York. Pfizer earlier this month spun off its animal health business through an initial public offering that raised $2.2 billion, though Pfizer will control roughly 80 percent of the new company, leading to speculation that other drugmakers would follow suit. But Lechleiter said his company was very happy with a business that was posting industry leading growth rates. He said livestock and pet care products now accounted for about 10 percent of total company sales, up from 5 percent to 6 percent a few years ago, and that the percentage could become even bigger. While overall sales at Lilly declined about 7 percent in 2012, primarily due to generic competition for its once top-selling Zyprexa schizophrenia drug, the animal health unit saw sales jump 21 percent to $2 billion, with a 30 percent rise in the United States. Lechleiter also said the company had no plans to make a push into so-called orphan drugs - medicines for serious conditions that affect few people but command astronomical prices. Many drugmakers have found this to be an attractive option as they try to find ways to make up for former big sellers facing generic competition.