GREENFIELD, Ind.--(BUSINESS WIRE)--Elanco Animal Health Incorporated (NYSE: ELAN) announced today it signed an agreement with Merck Animal Health (also known as MSD Animal Health) to divest worldwide rights for Vecoxan® for $55 million in an all-cash deal. Vecoxan® is used for prevention and treatment of coccidiosis in calves and lambs.
Divesting the rights to Vecoxan brings divestitures to-date into the $120 million to $140 million revenue range Elanco previously stated it expected across both companies. In total, these divestitures have generated approximately $425 million in pre-tax proceeds, which will be used to pay down debt associated with the transaction. The closing of the transaction with Vecoxan® is contingent on Elanco closing its transaction with Bayer, as well as other customary closing conditions.
“As we look broadly at the Bayer animal health transaction, we are encouraged by the significant progress from a regulatory, financing and integration planning perspective, as well as Bayer's underlying market positioning and performance. We continue to work toward a mid-2020 close," said Jeff Simmons, president and CEO of Elanco.
Vecoxan joins Elanco’s previously announced Osurnia® and Capstar® divestitures, and divestiture of European Economic Area and U.K. rights for Drontal® and Profender® from the Bayer portfolio. Elanco is in advanced discussions with the required regulatory authorities, which are progressing as expected. Elanco already received antitrust clearance for the transaction in China, Turkey and Ukraine. Any proposed remedy and final clearance for the Elanco/Bayer transaction remains subject to review and approval from other regulatory authorities.
Stifel acted as financial advisor to Elanco. Slaughter and May, Covington & Burling LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal counsel to Elanco. Cleary Gottlieb Steen & Hamilton LLP acted as legal counsel to MSD Animal Health.
Elanco (NYSE: ELAN) is a global animal health company that develops products and knowledge services to prevent and treat disease in food animals and pets in more than 90 countries. With a 65-year heritage, we rigorously innovate to improve the health of animals and benefit our customers, while fostering an inclusive, cause-driven culture for more than 5,800 employees. At Elanco, we’re driven by our vision of food and companionship enriching life - all to advance the health of animals, people and the planet. Learn more at www.elanco.com.
Forward Looking Statement
This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) about our expectations concerning our antitrust filings with the U.S. Federal Trade Commission (FTC) and other regulators in connection with our acquisition of the animal health business of Bayer AG, and reflects Elanco’s current belief. Forward-looking statements are based on our current expectations and assumptions regarding our business 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. For further discussion of these and other risks and uncertainties, see Elanco’s most recent filings with the United States Securities and Exchange Commission. Except as required by law, Elanco undertakes no duty to update forward-looking statements to reflect events after the date of this release.