October 5, 2016
By Alex Keown, BioSpace.com Breaking News Staff
ST. JOSEPH, Mo. – Eli Lilly & Company ’s animal health unit Elanco U.S., Inc. struck an $885 million deal with Boehringer Ingelheim Vetmedica Inc. to acquire a portfolio of canine, feline and rabies vaccines, as well as a fully-integrated research and development site.
Elanco said the deal will diversify the company’s companion animal portfolio in the United States by “complementing its offerings for dogs and cats.”
“As a result of the acquisition, Elanco will bring greater value to customers by providing a suite of options for preventing common diseases in companion animals,” said Lechleiter. “Coupled with our robust food animal portfolio, this addition further strengthens Elanco’s position in the global animal health business,” John Lechleiter, president and chief executive officer of Eli Lilly, said in a statement.
The deal expands Elanco’s pipeline to include vaccines for bordetella, Lyme disease, rabies and parvovirus. For the past three years, the vaccine portfolio saw consistent revenue growth, Boehringer Ingelheim said in a statement. This year the company launched two new animal vaccines ULTRA Hybrid FVRCP and ULTRA Duramune Lyme, which were both included in the deal. Other vaccines included in the deal are the Fel-O-Vax and Fel-O-Guard lines for cats.
Included in the deal is a manufacturing facility based in Fort Dodge, Iowa. The site is used to manufacture the products Elanco acquired from Boehringer Ingelheim Vetmedica, Inc. The site also has R&D and testing capabilities, including an on-site veterinary research center and lab space, Elanco said in a statement.
Elanco, part of Lilly’s core business, generated $919 million in revenue last year, Bloomberg reported. The addition of the Boehringer Ingelheim Vetmedica Inc. assets are expected to bring in an additional $200 million. The additional revenue will still keep Elanco short of matching Zoetis Inc. , Pfizer ’s spin-out animal-healthcare unit, which generated $1.76 billion in sales last year, Bloomberg said.
The acquisition is expected to close in early 2017, Elanco said in a statement. Part of the deal’s closer is conditioned on an asset swap agreement between Boehringer Ingelheim and Sanofi that was signed in June 2016. Albrecht Kissel, president and CEO of Boehringer Ingelheim Vetmedica Inc., said the deal with Elanco was an important step toward the “successful acquisition of Merial,” which is Sanofi’s animal-health unit.
“This was a highly complex decision from a business and from an emotional perspective. It was certainly not taken lightly particularly in view of the history and significant positive developments of this business over the past years,” Kissel said in a statement. “We are confident that, under Elanco’s leadership, customers will continue to have access to these innovative vaccines and the portfolio will have strong support.”
In December, Sanofi and Boehringer Ingelheim agreed to an asset swap, trading Merial for BI’s consumer healthcare unit. That deal is expected to close in the fourth quarter of 2016. Merial’s most well-known products include Frontline, Heartgard and GastroGard. Boehringer’s existing animal healthcare products include Circoflex and Metacam.
