Elanco also saw a modest increase in stock shares of over 3 percent after the company announced the KindredBio acquisition plan.
Under the terms of the $440 million acquisition, Elanco will buy all Kindred Biosciences outstanding stock at $9.25 per share, which is equal to a 52 percent premium based on the 30-day average closing price.
The purchase of KindredBio will help Elanco accelerate its expansion into the pet health market, mainly in pet dermatology. KindredBio is currently in the research and development phase for three dermatology products expected to launch through 2025.
Dermatologic symptoms like scratching and allergies are the number one reason pet owners visit the veterinarian. Elanco’s purchase of KindredBio will also help the company increase its presence in veterinary clinics with dermatology products.
“Kindred Biosciences’ monoclonal antibody pipeline and capabilities are additive and complementary to what we’ve built within Elanco,” said Aaron Schacht, the executive vice president Innovation, Regulatory and Business Development at Elanco. “This combination will bolster our opportunity for leadership in atopic dermatitis and allow us to deliver innovation of novel biologic therapeutics to treat other unmet disease challenges in pets.”
Elanco officials expect the KindredBio products to add about $100 million to their revenue expectations of $600 million by 2025. Elanco already has an existing relationship with KindredBio on licensing global commercial rights for KindredBio’s late-stage canine parvovirus treatment.
The transaction is expected to close in the third quarter of 2021.
What is Kindred Biosciences?
Founded in 2012, Kindred Biosciences, or KindredBio, is a biopharmaceutical company focused on developing medicine for pets. Co-founder and CEO Richard Chin was the CEO at the Gates Foundation-funded non-profit OneWorld Health when he realized that pets could be treated with drugs used for humans. His particular focus was to use monoclonal antibodies, which are used in human medicine, for veterinary medicine.
The company has two approved drugs on the market and several others in research and development.
“This announcement is validation of KindredBio’s achievements as one of the world’s first veterinary biopharmaceutical companies, recognizing our track record in drug development and remarkably talented team,” said Denise Bevers, the board director and co-founder of KindredBio, in a company press release. “KindredBio looks forward to continuing our mission to transform veterinary medicine as part of the Elanco family.”
What is Elanco?
Elanco is a global leader in animal health products and services to prevent and treat disease in farm animals and pets. The company markets 200 brands in 90 countries around the world.
Elanco went public in 2018. Last year, the company purchased Bayer Animal Health, which makes the popular pet products Advantage and Seresto.
Elanco reported $1,242 million in revenue for the first quarter of 2021. The addition of Bayer Animal Health contributed $559 million to that revenue, the company said in a statement.