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Elanco, Eli Lilly & Co.’s Animal Health Segment


Feb. 28 2017, Updated 7:36 a.m. ET


In 4Q16, Eli Lilly & Co.’s (LLY) Animal Health segment, Elanco, reported a 3% increase in revenues to $837.6 million, compared to $811.7 million in 4Q15. This segment contributed ~14.5% to LLY’s total revenues, and it covers food and other products for companion animals.

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Revenues for Elanco’s Animal Health segment

In 4Q16, Elanco’s US Animal Health sales rose 2% to $389 million. In 4Q16, its Animal Health sales outside the US market rose 4% to $448.6 million. These revenues include sales from the Novartis (NVS) Animal Health business, which Eli Lilly purchased in January 2015.

The segment’s US revenues increased due to higher sales of new products added to the Companion Animal Products portfolio, partially offset by lower sales of swine and dairy products due to market access pressures.

International revenues for the Food Animal Products portfolio and the Companion Animal Products portfolio reported growth in revenues due to increased demand.

Companion Animal Products portfolio

In 4Q16, Elanco’s Companion Animal Products portfolio saw a growth in revenues to $240.8 million in 4Q16. This includes a 32% increase in the US sales and flat sales outside the US markets.

Food and Other Products portfolio

In 4Q16, the revenues for the Food and Other Products portfolio totaled $596.8 million. The portfolio’s revenues saw a 6% decline in its US sales, and it saw 6% growth in its international sales. These sales figures include a 6% operational decline and a 1% negative impact of foreign exchange.

Merck & Co. (MRK); Merial, a Sanofi (SNY) Company; and Zoetis (ZTS), the animal health arm of Pfizer (PFE), compete with Eli Lilly on certain product mixes.

For broad-based exposure to Eli Lilly, you can consider the Health Care Select Sector SPDR ETF (XLV), which holds ~2.7% of its total assets in LLY.


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