Elanco Marks One Year Since IPO, Split from Lilly

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Elanco CEO Jeff Simmons lays out his vision for the company's future Elanco CEO Jeff Simmons lays out his vision for the company's future
GREENFIELD -

Greenfield-based Elanco Animal Health (NYSE: ELAN) is celebrating the first anniversary of its Initial Public Offering, following the split from Indianapolis-based Eli Lilly and Co. (NYSE: LLY).

One year ago today, shares of Elanco stock began trading for the first time on the New York Stock Exchange. Since then, the independent public company has acquired several companies to bolster its research and development of vaccines and antibiotics for both the animal agriculture and companion animal sectors.

Its biggest purchase, by far, was the animal health division of Germany-based Bayer AG in a cash and stock deal valued at $7.6 billion. “It was initiated by them,” explained Elanco President and Chief Executive Officer Jeff Simmons. “They made a decision to look at strategic alternatives to their animal health business.”

While both companies have agreed to the deal, Elanco still faces regulatory approval. “Regulatory is very important. We're working in a very collaborative way with all the key regulatory bodies across the world,” said Simmons this week as he reflected upon the past year. “We've got a lot of experience both on the selling side and the buying side with the antitrust process. We're working with our same teams and the expertise to do it.”

The companies hope to close the deal by mid-year 2020.  Assuming regulatory approval, the deal will vault Elanco from fourth largest animal health company to the second position behind Zoetis.

“This combination will join two complementary animal health-focused entities previously under the human pharma umbrella into a dedicated company focused on delivering for farmers, veterinarians and pet owners,” Simmons said in August following the announcement.

Simmons says the purchase strengthens and accelerates the company’s “Innovation, Portfolio and Productivity” (IPP) strategy. He says as a stand-alone company, Elanco can respond quicker. “I think it allowed us to take advantage of opportunities in the marketplace, to be a little bit faster relative to our decisions and, and responsiveness to our customers,” said Simmons. “Our ability to be able to serve our customers by responding to market speed, we don't have another level of governance. Our governance is really us now.”

Now into its second year, the company is taking a broader look at its business model. With the purchase of Bayer’s animal health division, Elanco’s business is now evenly split between food animal and companion animal segments. Prior to the deal, approximately 61 percent of Elanco’s sales, according to 2018 company data, was hardcore ag, manufacturing antibiotics, feed additives and vaccines for farmers and ranchers.

“The move combines our long-standing focus on the veterinarian while meeting pet owners’ changing expectation of pet care and access to products,” said Simmons.

The pricing of stock during Elanco’s IPO was $24.00 per share. The stock closed Thursday at $27.31 per share.

Simmons explained to Inside INdiana Business Content Manager Wes Mills about the benefits of Elanco as a stand-alone company.
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