Lilly Buys Vetmedica Pet Vaccines for $885M

The deal will diversify Lilly's Elanco animal medicine business, adding vaccines for rabies and other feline and canine illnesses.
Matthew HellerOctober 5, 2016
Lilly Buys Vetmedica Pet Vaccines for $885M

Eli Lilly & Co. has agreed to acquire the U.S. vaccines portfolio of Boehringer Ingelheim Vetmedica in an $885 million deal to expand its Elanco animal medicine business.

The acquisition includes Vetmedica’s vaccines for bordetella, Lyme disease, rabies and parvovirus, among others, and its manufacturing facility in Fort Dodge, Iowa. Elanco, the world’s second-largest animal health company behind Zoetis, currently makes parasiticides and pain and dermatology medicines for the U.S. market.

“We understand the unique bond that owners share with pets and are committed to helping those pets live longer, healthier lives,” Elanco President Jeff Simmons said in a news release. “With a growing portfolio addressing both prevention and treatment of disease, Elanco can partner with veterinarians and pet caregivers to do just that.”

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Elanco has been growing its portfolio through acquisitions, buying Novartis AG’s animal-health business for $ 5.4 billion in early 2015. Its revenue increased 2% to $859.8 million in the second quarter, accounting for 16% of total Eli Lilly revenue.

Boehringer Ingelheim was required to sell Vetmedica’s U.S. assets as part of its acquisition of Sanofi’s animal health business Meria.

Eli Lilly CEO John C. Lechleiter said the deal reaffirms the company’s confidence in Elanco’s growth potential.

“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,” he said. “Coupled with our robust food animal portfolio, this addition further strengthens Elanco’s position in the global animal health business.”

Eli Lilly shares were up 0.24% at $81.30 in trading Wednesday after earlier rising as high as $82.06. The company has consistently denied speculation that it is planning to spin off the Elanco unit, which also makes products for food animals.