Elanco Animal Health (ELAN) Bank of America Global Healthcare Conference summary

Strategic overview and growth priorities

• Celebrated eight years as an independent company, emphasizing intentional growth, innovation, and cash focus, especially post-Bayer acquisition.

• Achieved 10% reported growth in the recent quarter, evenly split between Farm Animal and Pet, U.S. and International, and price and volume.

• Deleveraging from 6x-7x to approximately 3x by year-end, targeting 2x next year, unlocking broader investor interest.

• Committed to mid-single-digit revenue, high single-digit EBITDA, low double-digit EPS, $1B cash generation by 2028, and annual margin expansion.

• Pipeline includes six blockbuster launches and 15 clinical projects, with five to six expected to reach market by 2031.

Market dynamics and pricing strategy

• Animal health industry projected to grow from $40B to $60B, with both market and share growth opportunities.

• Recent price acceleration attributed to medical differentiation and strong pet owner willingness to spend on health.

• No price war observed; differentiated innovation enables price increases and share gains, especially in pet health.

• Corporate clinics represent an under-indexed opportunity, but growth is not dependent on this segment.

• OTC pet health market is expanding, with strong presence in major retail channels and ability to serve price-sensitive segments.

Product innovation and international expansion

• Quattro, a differentiated oral parasite treatment, has captured over 50% of U.S. clinics and is set for international rollout in 2027.

• Zenrelia, a fast-growing dermatology product, now used as first-line treatment in over 40% of clinics, with rapid international uptake.

• Befrena, a monoclonal antibody for dermatology, is in high demand and expected to be a major U.S. growth driver next year.

• Manufacturing capacity is scaling to meet demand for both Zenrelia and Befrena, with ongoing global regulatory submissions.

• International strategy leverages Bayer's infrastructure, focusing on marketing and promotion in major and emerging markets.