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Elanco deal in line with strategy


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GREENFIELD — If a purchase agreement is approved later this year, Elanco will enter the global poultry vaccine market with the acquisition of German-based Lohmann SE.

The agreement to purchase all assets of Lohmann and its subsidiary, Lohmann Animal Health, was announced Monday; however, terms of the deal were not disclosed.

The move is in line with a strategy statement announced in January 2013 that Greenfield-based Elanco’s parent, Eli Lilly and Co., would not sell off its animal health division, but expand it with acquisitions to bolster losses the company might face in its core pharmaceutical business due to the expiration of the company’s patents on Zyprexa and Cymbalta.

Lohmann, with roots that go back to 1967, has headquarters in Cuxhaven, Germany. It is a leader in the global supply of poultry vaccines and markets animal feed additives, according to a company news release.

“Effectively competing in the animal vaccine segment is a cornerstone of Elanco’s long-term strategy and is one more way we will expand the value we create for customers,” said Jeff Simmons, Elanco Animal Health president and a Lilly senior vice president.

“Elanco has continued to invest significantly in animal health in the past few years, growing business and expanding our pipeline…. We will continue to seek opportunities that support those efforts,” Simmons’ statement read.

Elanco will acquire Lohmann’s catalogue of vaccines and feed additives, its commercial capabilities and the company’s manufacturing sites in Germany and Winslow, Maine.

Though the acquisition will not directly affect Elanco’s operations at its Greenfield campus, the company continues to expand and grow here, Elanco spokeswoman Colleen Parr Dekker said in an email.

“As we increase our footprint globally, that will continue to have a positive benefit in the local community,” she wrote.

Elanco indicated the deal is expected to close sometime in the second quarter of 2014, assuming customary closing conditions are met and subject to regulatory approvals.

Lilly stock opened Monday at $58.10 and closed at $58.03 after establishing a 52-week high of $58.90 in early-morning trading.

The company has reduced its earnings outlook for 2014 by 5 cents per share to a range between $2.72 to $2.80 as a result of the transaction.

The Lohmann acquisition, if approved, will be the latest in a string of mergers and acquisitions by Elanco.

In 2008, the company purchased the rights, U.S. sales force and the Augusta, Ga., manufacturing plant for Posilac, a supplement that increases milk production in dairy cows. The company negotiated the purchase with Monsanto for $300 million.

The company purchased Janssen Pharmaceuticals, a Johnson & Johnson company, to complement its companion-animal business in 2011. In 2012, Elanco acquired Terre Haute-based ChemGen, a company that developed feed additives to help animals digest food more efficiently.

 

The Associated Press contributed to this report.

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