Elanco divests more meds as it moves toward Bayer acquisition

Elanco has announced several new transactions that officials expect will bring the company closer to its planned acquisition of Bayer’s animal health business.

The company has agreed to divest worldwide rights for its Vecoxan medication to Merck Animal Health for $55 million. Vecoxan is a coccidiosis preventive for cattle and lambs.

According to the company, this brings its divestitures to date into the $120-$140 million revenue range. This is the range Elanco previously said it expected for the Bayer acquisition. In total, these divestitures have generated approximately $425 million in pre-tax proceeds, which the company will use to pay down debts associated with the transaction.

The Vecoxan sale is contingent on Elanco closing its deal with Bayer, according to the announcement.

“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,” said Jeff Simmons, Elanco’s president and CEO. “We continue to work toward a mid-2020 close.”

Elanco also agreed to divest European rights for two Bayer dog and cat de-wormers, Drontal and Profender. Pharmaceutical company Vetoquinol will purchase the rights, in the European Economic Area and the United Kingdom, for $140 million in an all-cash deal subject to customary post-closing adjustments, according to the announcement.

With the transaction, Elanco expects to move closer to getting European Commission approval of the Bayer deal. The agreement with Vetoquinol is subject to Elanco closing with Bayer, as well as other customary closing conditions.