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Elanco Sells Royalty and Milestone Rights for Lotilaner in Human Health to Blackstone; Accelerates Debt Paydown
Elanco Sells Royalty and Milestone Rights for Lotilaner in Human Health to Blackstone; Accelerates Debt Paydown

Yahoo

time05-05-2025

  • Business
  • Yahoo

Elanco Sells Royalty and Milestone Rights for Lotilaner in Human Health to Blackstone; Accelerates Debt Paydown

GREENFIELD, Ind., May 5, 2025 /PRNewswire/ -- Elanco Animal Health Incorporated (NYSE: ELAN) today announced the sale of certain future tiered royalties and commercial milestones associated with XDEMVY® (lotilaner ophthalmic solution) 0.25%, for the human health application of lotilaner, to funds affiliated with Blackstone Life Sciences and Blackstone Credit & Insurance for $295 million in cash. Monetization of this non-core asset will be used to accelerate debt reduction, positioning Elanco to achieve an expected net leverage ratio of 3.9x to 4.3x adjusted EBITDA by the end of 2025. Elanco will repay portions of its outstanding term loans on a pro-rata basis, which is expected to reduce interest expense by approximately $10 million, offset by the sale of approximately $10 million of royalties based on Elanco's initial 2025 guidance. In 2019, Elanco exclusively licensed lotilaner to Tarsus Pharmaceuticals, Inc. (NASDAQ: TARS) for exploration as a solution to several unmet human health needs. In 2023, XDEMVY became the first lotilaner-based product approved for human use and the only FDA-approved medicine for treatment of Demodex blepharitis (DB), a common eyelid disease in humans caused by Demodex mites. "Elanco's team of scientific experts is focused on identifying and developing molecules to generate high-impact innovation, not just in our own portfolio, but in adjacent industries to create broader value," said Jeff Simmons, Elanco President and CEO. "As we continue to focus on launching our recent innovation and accelerating our core business sales growth in 2025, this transaction delivers incremental cash that advances our deleveraging goals making high 3x net leverage a real possibility by the end of 2025. We appreciate Blackstone's collaborative investment to further Elanco's goals and their recognition of the positive potential impact of XDEMVY on millions of DB patients in the U.S." "Elanco's innovation served as the basis for XDEMVY's strong efficacy and safety profile, and Tarsus' executional strength has led to its rapid adoption and commercial success. We are pleased to partner with both leading pharmaceutical companies and back this first-in-class treatment that addresses a pervasive and damaging eyelid disease," said Craig Shepherd and Kiran Reddy, MD, Senior Managing Directors, Blackstone Life Sciences. The agreement applies to certain tiered royalties associated with the U.S. net sales of XDEMVY from April 2025 through August 2033 and certain commercial milestones. Elanco retains the rights to all royalty payments on net sales outside the U.S. as well as any future human applications of lotilaner beyond ophthalmic solutions. Morgan Stanley & Co. LLC acted as the sole structuring agent. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements concerning the expected financial impacts of the royalty sale on our financial results, plans for using the cash we receive in the sale, and expected financial results for 2025. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important risk factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, including our ability to recognize the expected financial and cash generation benefits of the transaction and additional factors that could cause actual results to differ materially from forward-looking statements described in the company's latest Form 10-K and Form 10-Qs filed with the Securities and Exchange Commission. We caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this press release. Any forward-looking statement made by us in this press release speaks only as of the date thereof. We undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. ABOUT ELANCOElanco Animal Health Incorporated (NYSE: ELAN) is a global leader in animal health dedicated to innovating and delivering products and services to prevent and treat disease in farm animals and pets, creating value for farmers, pet owners, veterinarians, stakeholders and society as a whole. With 70 years of animal health heritage, we are committed to breaking boundaries and going beyond to help our customers improve the health of animals in their care, while also making a meaningful impact on our local and global communities. At Elanco, we are driven by our vision of Food and Companionship Enriching Life and our Elanco Healthy Purpose™ sustainability pillars – all to advance the health of animals, people, the planet and our enterprise. Learn more at About Blackstone Life SciencesBlackstone Life Sciences (BXLS) is an industry-leading private investment platform with capabilities to invest across the life cycle of companies and products within the key life science sectors. By combining scale investments and hands-on operational leadership, BXLS helps bring to market promising new medicines and medical technologies that improve patients' lives and currently has $12 billion in assets under management. About Blackstone Credit & Insurance Blackstone Credit & Insurance ("BXCI") is one of the world's leading credit investors. Our investments span the credit markets, including private investment grade, asset-based lending, public investment grade and high yield, sustainable resources, infrastructure debt, collateralized loan obligations, direct lending and opportunistic credit. We seek to generate attractive risk-adjusted returns for institutional and individual investors by offering companies capital needed to strengthen and grow their businesses. BXCI is also a leading provider of investment management services for insurers, helping those companies better deliver for policyholders through our world-class capabilities in investment grade private credit. Investor Contact: Tiffany Kanaga (765) 740-0314 Contact: Colleen Dekker (317) 989-7011 View original content to download multimedia: SOURCE Elanco Animal Health Sign in to access your portfolio

Why Big Pharma wants you to eat more meat
Why Big Pharma wants you to eat more meat

Vox

time01-03-2025

  • Business
  • Vox

Why Big Pharma wants you to eat more meat

This is the final story in a series of articles on how factory farming has shaped the US. Find the rest of the series and future installments here, and visit Vox's Future Perfect section for more coverage of Big Ag. The stories in this series are supported by Animal Charity Evaluators, which received a grant from Builders Initiative. For years, Jeff Simmons — the president and CEO of the large US pharmaceutical company Elanco — ridiculed a seemingly unlikely target on social media: the plant-based meat industry. As startups like Beyond Meat and Impossible Foods rose to prominence, Simmons attacked veggie burgers and meat-free chicken as highly processed foods that 'won't do' in the effort to feed a growing population. (Even though experts widely acknowledge that plant-based meat would, in fact, better help feed a growing population, as it requires less land and water and generates far less greenhouse gas emissions than animal meat.) But take a closer look at Elanco, and Simmons's opposition isn't all that surprising. The company he runs, which spun off from pharmaceutical giant Eli Lilly in 2019, is a world leader in developing and marketing pharmaceuticals — including antibiotics and vaccines — for both pets and livestock. In the US, nearly all meat, milk, and eggs come from factory farms, which are prone to being overcrowded, stressful, disease-ridden environments where animals are especially susceptible to infections. Products from companies like Elanco are integral to preventing and treating those inevitable infections, serving an essential role in industrial animal agriculture. If plant-based meat were ever to displace some of the conventional meat supply, it would mean fewer factory-farmed animals, and thus less profit for Elanco. 'Alternatives to animal-derived protein,' among other things, the company wrote in a 2019 financial report, 'could negatively affect the market for our products.' In the press and on social media, Simmons has also exaggerated the potential of technology to slash livestock emissions. In 2021, he claimed — without citing evidence — that some cattle operations could reach net zero emissions within a decade, and that we shouldn't expend energy on changing people's diets to fight climate change. That flies in the face of consensus from climate scientists and agriculture experts, who, in a 2021 survey, overwhelmingly agreed that rich- and middle-income countries need to rapidly reduce greenhouse gas emissions from livestock, which currently account for about 15 to 20 percent of global emissions, and that slashing meat and dairy consumption is the most effective way to do it. On conference stages, Simmons has criticized Bill Gates's bullish support for meat alternatives and a Chipotle marketing campaign critical of factory farming, while another Elanco executive criticized raising animal welfare standards for chickens. Elanco declined an interview request for this story and didn't respond to a list of detailed questions. 'For 70 years, Elanco has pioneered ways to improve animal health and wellbeing and raise livestock more sustainably,' the company wrote in a statement to Vox. 'We work alongside farmers and veterinarians to bring forward leading innovations in nutrition and diet management, digestion optimization as well as on-farm sustainability solutions.' The company's work can be thought of as part of the 'animal-industrial complex' — a network of companies, governments, and public and private research centers that, according to sociologist Richard Twine at Edge Hill University in the UK, make up the factory farm system, promote its continued existence and expansion, and defend it from criticism. 'There's a lot of effort being put into protecting business as usual,' Twine said. That animal-industrial complex encompasses meat, milk, and egg companies and their trade associations, pharmaceutical companies like Elanco, genetics companies that breed farm animals to grow bigger and faster, and the seed, fertilizer, and farm equipment companies involved in growing animal feed. It also includes public institutions, such as industry-friendly agencies like the US Department of Agriculture and the US Food and Drug Administration, and even land-grant universities that receive funding from and partner with the meat industry on its research priorities. The entities within this ecosystem work to boost meat production and sales, shape public policy, and amplify messaging that improves consumer perception of animal products. Both money and personnel flow between the different players. Elanco, for example, sponsors meat industry conferences and awards, funds livestock industry groups and serves on their boards, and has published research with industry-friendly academics claiming that US dairy farming can achieve 'climate neutrality.' Elanco isn't alone. Merck Animal Health — a division of Merck, one of the world's largest pharmaceutical companies — and Zoetis, which in 2013 spun off from the pharmaceutical giant Pfizer, engage in some of the same activities, like sponsoring meat industry conferences. Zoetis didn't respond to a request for comment and Merck Animal Health declined an interview request. The Animal Health Institute, a trade group that represents the animal pharmaceutical industry, didn't respond to a list of detailed questions about the industry and pointed me to progress reports from the intergovernmental World Organization for Animal Health and the trade group HealthforAnimals. Over the last century, these companies' innovations in developing infection-fighting antimicrobial drugs for livestock were critical to building the factory farm system as we know it today. That system helped make meat, milk, and eggs more affordable and abundant, and lower their per-pound carbon footprint. But it also has contributed to serious animal welfare, environmental, and public health concerns, including antimicrobial-resistant germs or 'superbugs,' which adapt and build resilience against the antibiotics laced in farmed animals' feed and water. When these germs escape the farm and infect humans, antibiotics are ineffective at treating them, which can make common ailments difficult or even impossible to heal. Heavy antibiotic use in livestock, along with overuse of antibiotics in humans, is a significant driver of the antimicrobial resistance crisis, which killed over one million people worldwide in 2019 and played a role in an additional 4.95 million deaths. Around 70 percent of antibiotics important in human medicine are fed to farmed animals, both in the US and globally. The World Health Organization has called for significant reductions and considers antimicrobial resistance 'one of the top global public health and development threats.' That crisis can be partly pinned on the pharmaceutical companies that helped to build factory farming, undermining their stated missions of improving human and animal health. After decades of increasing pressure from consumers, public health experts, and US policymakers, some of these pharma companies have in recent years pledged to move away from antibiotics, but little progress has been made. And through it all, animal pharma companies have remained set on further expanding factory farming in the US and around the globe. In the interwar period, the discovery of antibiotics like Prontosil and penicillin led to a pharmaceutical revolution, enabling doctors to quickly heal common bacterial infections in humans that until then had often been life-threatening. The drugs soon became mass-produced and affordable, and more antibiotic discoveries followed. It wasn't long until pharmaceutical leaders like Pfizer looked for markets beyond human medicine. They found it on the farm, according to Claas Kirchhelle, a medical historian at the French National Institute of Health and Medical Research who documents the rise of antibiotics in agriculture in his book Pyrrhic Progress: The History of Antibiotics in Anglo-American Food Production . By the late 1940s, researchers came to understand that when farmed animals are fed regular, low doses of certain antibiotics, they gain weight faster on less feed and better stave off disease, Kirchhelle explains in his book. This one-two punch of disease prevention and rapid weight gain suddenly made it more feasible to pack large numbers of animals in barns, while having fewer animals die from infectious diseases and shortening the amount of time it took for animals to reach their 'market weight.' These became two hallmarks of factory farming, enabling farmers to squeeze more meat out of each animal and increase profits. Antibiotic adoption in the meat industry was swift: By 1951, around 16 percent of antibiotics sold in the US went to livestock; by 1970, it reached 43 percent. America's precipitous increase in meat production after World War II, facilitated in part by antibiotics, was widely celebrated as a solution to Malthusian fears that humanity wouldn't be able to feed a rapidly growing global population. 'For patriotic US researchers, politicians, and journalists, promulgating agricultural plenty and efficiency-boosting technologies like antibiotics became a moral duty,' Kirchhelle writes. By the 1960s, scientists paid increasing attention to the antimicrobial resistance threat posed by animal agriculture. Strains of bacterial diseases like salmonella and E. coli can adapt and build resistance to those antibiotics and then leave the farm and infect humans in a number of ways: improperly cooked meat, livestock manure leaching into drinking water or rivers and streams, or on the clothes of a farm owner or worker. But the US Food and Drug Administration, which oversees animal pharmaceuticals, for decades failed to take the issue seriously and downplayed warnings. In the 1970s, the agency did make an earnest attempt to limit the use of two classes of human-critical antibiotics in livestock, but it was thwarted by a burgeoning coalition of livestock and pharmaceutical business interests. According to Kirchhelle, this coalition also funded a separate organization to conduct 'counter science' to muddy the scientific debate over the proposed ban, which included organizing experts to write a report that was then edited without the researchers' consent. It wasn't until the mid-2010s that the FDA took two basic but important actions to meaningfully address the problem: requiring farmers to get veterinarian prescriptions for medically important antibiotics, and asking — though not requiring — animal pharmaceutical companies to remove language on product labels about antibiotics' ability to make animals grow faster. Sales of antibiotics soon fell rapidly. It represented progress, but not enough, according to Gail Hansen, an antimicrobial expert and former state public health veterinarian in Kansas. Hansen told me the agency's actions represented a compromise that was favorable to industry compared to what some high-ranking members of Congress were pushing for at the time: significant antibiotic use restrictions and increased transparency from drug makers on how their antibiotics were used in livestock. Pharma companies wanted to change antibiotic use 'on their own terms and not the government telling them what to do,' according to Hansen. 'If they could show just a little bit of good faith,' by complying with the FDA, they could stave off stricter regulation. Over the last decade, livestock pharma companies have found themselves at a crossroads. Under growing scrutiny from public health experts and policymakers, the biggest players in the sector have committed to 'antimicrobial stewardship,' promising to wean farmers off medically important antibiotics by investing in vaccine development, nutritional supplements like enzymes and probiotics, and animal-only antibiotics, which aren't used in human medicine. But while the FDA's actions cut antibiotic use on farms from 2015 to 2017, corporate efforts since then have seemingly failed to move the needle: Sales of medically important antibiotics increased 10 percent from 2017 to 2023, and the US remains far behind Europe, where in 2020, antibiotic use per animal was about half that of the US. The continent slashed antibiotic use through tougher regulations, better farm hygiene, and relying more on vaccines, enzymes, probiotics, and other products to prevent disease, according to Leon Marchal, a Netherlands-based innovation director at IFF Health & Bioscience, which develops and sells animal health products. Despite the animal pharmaceutical industry's stated commitments to antimicrobial stewardship, some of their actions have suggested a reluctance to move away from the drugs. In 2023, the share of Elanco's revenue from medically important antibiotics, for both pets and livestock, stood at 10 percent, down just 2 percent from 2018. In 2018, the company ran an advertising campaign designed to assuage consumer concerns over antibiotics in meat production. And at a major pork industry conference the same year, Elanco handed out brochures encouraging farmers to feed pigs a pair of antibiotics to make the animals grow fatter. But a few years earlier, the FDA had told one of Elanco's subsidiaries that drug combination was unsafe and shouldn't be promoted to increase weight gain. Elanco committed to stop distributing the brochures after the New York Times inquired about it. 'For more than 15 years, we've been focused on increasing responsible antibiotic use, reducing the need for antibiotics and improving the health of animals through vaccines, nutrition and other efforts,' Elanco wrote in a statement to Vox. 'Most importantly, Elanco has focused on expanding access to animal-only antibiotics, which don't create a threat to human resistance, and creating antibiotic alternatives, including vaccines, enzymes, probiotic and prebiotics.' Around the same time, Zoetis was using similar messaging when selling human-relevant antibiotics to farmers in India, where, like in other middle-income countries, poultry factory farming is quickly expanding. The company told the press that it was following India's antibiotics regulations. As the reputational risk of selling medically important antibiotics in the US rises, some of the biggest animal pharmaceutical companies are moving on to what Elanco has called its 'next economic opportunity': mitigating climate change. In 2018, the company gained FDA approval for a drug that reduces ammonia emissions in cattle; Zoetis has also announced research efforts to develop a similar product. Last year, the FDA completed its review of Elanco's Bovaer product — a powder that when fed to dairy cows daily can reduce emissions from their methane-rich burps — and deemed it safe and effective. 'We're committed to bringing innovative solutions that allow farmers and ranchers to reduce and measure emissions,' the company wrote in a statement to Vox. These products have the potential to reduce some types of cattle-caused emissions, but by much less than we could by simply eating far fewer animal products and more of the plant-based foods that Elanco executives have attacked. But companies that depend on factory farming would prefer we keep engineering animals' diets for maximum productivity, and now, minimal environmental liability, rather than reach for a veggie burger or glass of soy milk. This new class of emission-reducing feed products may come with a sustainable sheen, but they're in keeping with how the industry views animals — not as living, feeling creatures, but as machines whose diets and environments must be endlessly fine-tuned with chemical inputs to compensate for unhygienic farms, poor animal welfare, and a sizable carbon footprint. Even as policy leaders in wealthy countries begin to wake up to the costs of this system, it continues to grow bigger and more entrenched. This 'model of food production,' Kirchhelle said, 'is becoming more and more the dominant mode of producing animals worldwide.' You've read 1 article in the last month Here at Vox, we're unwavering in our commitment to covering the issues that matter most to you — threats to democracy, immigration, reproductive rights, the environment, and the rising polarization across this country. Our mission is to provide clear, accessible journalism that empowers you to stay informed and engaged in shaping our world. By becoming a Vox Member, you directly strengthen our ability to deliver in-depth, independent reporting that drives meaningful change. We rely on readers like you — join us. Swati Sharma Vox Editor-in-Chief See More: Animal Welfare Future Perfect The Future of Meat

Elanco Enters Agreement with Medgene to Commercialize Highly Pathogenic Avian Influenza Vaccine in Dairy Cattle
Elanco Enters Agreement with Medgene to Commercialize Highly Pathogenic Avian Influenza Vaccine in Dairy Cattle

Yahoo

time25-02-2025

  • Business
  • Yahoo

Elanco Enters Agreement with Medgene to Commercialize Highly Pathogenic Avian Influenza Vaccine in Dairy Cattle

GREENFIELD, Ind., Feb. 25, 2025 /PRNewswire/ -- Elanco Animal Health Incorporated (NYSE: ELAN) today announced it has entered into an agreement with South Dakota-based Medgene to leverage the company's innovative vaccine platform technology. The agreement includes commercialization of a highly pathogenic avian influenza (HPAI) vaccine for use in dairy cattle. Medgene reports the vaccine has met all requirements of the U.S. Department of Agriculture's (USDA) platform technology guidelines and is in the final stages of review for conditional license approval. While the poultry industry has developed interventions and processes to reduce the spread or eradicate HPAI, those efforts have continued to be challenging as the current outbreak enters its fourth year. Dairy producers have worked quickly to protect their herds without the same tools and biosecurity options to tackle this devastating disease. The cross-species transmission of the disease into nearly 1,000 dairy herds across the U.S. since March 2024, along with zoonotic transmission to people, shows that more interventions are quickly needed. This virus is prevalent and predicted to persist over time, thus a cattle vaccine will be critical to slow virus spread between birds and cattle. "As egg prices soar and milk production wanes in infected dairies, the need for new solutions to curb disease spread is evident," says Jeff Simmons, President and CEO of Elanco Animal Health. "Elanco is pleased to partner with Medgene to bring customers options to fight this devastating disease and believes this product will become part of a routine vaccination protocol for the U.S. dairy industry. This partnership further strengthens our diverse dairy portfolio and advances our One Health platform of animal health solutions, not only benefitting our dairy customers, but helping curb disease spread for our poultry customers, and working to improve egg prices for consumers." "Medgene has an established reputation of supporting animal owners and their veterinarians with our USDA-licensed platform technology and bioinformatics software to design transformational vaccines. With our critically important H5N1 vaccine for dairy cattle in the final stages of approval, we're excited to partner with Elanco to quickly bring this much needed solution to U.S. dairies," said Mark Luecke, CEO of Medgene. The USDA previously approved Medgene's vaccine platform technology in cattle, allowing the company to accelerate H5N1 vaccine development. Medgene has existing vaccine manufacturing supply ready to deploy with the ability to support the U.S. dairy herd. ABOUT ELANCO Elanco Animal Health Incorporated (NYSE: ELAN) is a global leader in animal health dedicated to innovating and delivering products and services to prevent and treat disease in farm animals and pets, creating value for farmers, pet owners, veterinarians, stakeholders and society as a whole. With 70 years of animal health heritage, we are committed to breaking boundaries and going beyond to help our customers improve the health of animals in their care, while also making a meaningful impact on our local and global communities. At Elanco, we are driven by our vision of Food and Companionship Enriching Life and our Elanco Healthy Purpose™ sustainability pillars – all to advance the health of animals, people, the planet and our enterprise. Learn more at Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements concerning product approvals and launches and expectations for contractual relationships. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important risk factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, including whether and when the USDA completes its review, the USDA's determination about any conditional approval, market acceptance of the vaccine, our ability to market and sell the vaccine, competition with other solutions to address highly pathogenic avian influenza and additional factors that could cause actual results to differ materially from forward-looking statements described in the company's latest Form 10-K and Form 10-Qs filed with the Securities and Exchange Commission. We caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this press release. Any forward-looking statement made by us in this press release speaks only as of the date thereof. We undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. Investor Contact: Tiffany Kanaga (765) 740-0314 Media Contact: Colleen Dekker (317) 989-7011 View original content to download multimedia: SOURCE Elanco Animal Health

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