Merck to buy Elanco’s aqua health business for $1.3 bln, Health News, ET HealthWorld

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New Delhi: Merck said on Monday would buy Elanco Animal Health‘s aqua business for $1.3 billion in cash, strengthening its portfolio of aquatic pet and livestock health products.

Shares of Elanco rose more than 7 per cent to $15.8 premarket.

Merck’s animal health unit had acquired fish health product maker Scan aqua and fish conservation monitoring equipment makers Vaki and Antelliq Corp in 2019.

The deal, expected to be completed mid-year, will help Merck gain access to DNA-based vaccine Clynav, which protects Atlantic salmon against pancreas disease, and Imvixa, an anti-parasitic sea lice treatment.

The addition of Elanco’s products will establish Merck Animal Health as a leader in aqua, said Rick DeLuca, president of Merck Animal Health.

Merck will also gain access to Elanco’s manufacturing facilities in Canada and Vietnam, as well as a research facility in Chile.

Elanco said the transaction will trim its debt by $1.05 billion to $1.1 billion, or 20 per cent, and help boost investments in its pet healthcare products, a larger market.

Elanco sees greater return on per dollar investment from pet health and livestock sustainability pipeline, CEO Jeff Simmons said in an interview.

The company has six late-stage products in its pet health and livestock sustainability pipeline, which will be launched in the U.S. market by 2025, if approved.

Total sales from the aqua business were $42 million in the third quarter, representing about 4 per cent of Elanco’s total revenue.

The valuation of Elanco’s aqua business at $1.3 billion makes sense, considering aquaculture’s higher growth and strong margin relative to other animal proteins, said Piper Sandler analyst David Westenberg.

  • Published On Feb 7, 2024 at 11:26 PM IST

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