Animal Health segment
In 1Q18, Eli Lilly (LLY) reported revenues close to $761 million for its Elanco Animal Health business—a YoY (year-over-year) decline of ~1%. Excluding the impact of foreign currency fluctuations, the segment reported a 4% YoY decline in its revenues in 1Q18.
While the US Companion Animal business and ex-US Animal Food business contributed 3.5 percentage points and 1.6 percentage points to Elanco’s YoY revenue growth in 1Q18, it was offset by a decline in the revenues of the ex-US Companion Animal business and US Animal Food business. There were strategic exits from certain products of ~0.3 percentage points, 3.9 percentage points, and 4.8 percentage points, respectively. Eli Lilly’s Elanco decided to exit from areas like contract manufacturing. The areas were added to Eli Lilly’s portfolio through the acquisition of Boehringer Ingelheim Vetmedica’s US portfolio of canine, rabies, and feline vaccines, two terminated legacy distribution agreements in the US, and the dairy supplement Posilac.
Elanco expects to report positive revenue growth trends in 2H18.
The above diagram demonstrates how new product launches have contributed to Elanco’s revenue growth trajectory since 1Q15. Recently launched products have played a pivotal role in boosting the company’s Companion Animal Health business revenues 10% YoY in 1Q18. Eli Lilly is competing aggressively with other animal health players like Zoetis (ZTS), Novartis (NVS), and Merck (MRK).
Segmental performance in 1Q18
In 1Q18, Elanco witnessed sales worth $195.4 million for its US Companion Animal business—12% growth YoY. The company’s US Food and Other business reported revenues close to $180.3 million in 1Q18—a YoY decline of ~24%.
Elanco reported revenues close to $91.6 million for its OUS (out-of-US) Companion Animal business in 1Q18—a rise of 6% YoY on a reported basis. However, excluding the impact of FX fluctuations, the segment’s revenues declined 3% YoY in 1Q18. The company’s OUS Food and Other business reported revenues close to $293.9 million in 1Q18—a rise of 9% YoY on a reported basis and 4% on constant exchange rate basis.