Lohmann poultry vaccines and not additives the draw for Elanco

25-Feb-2014 - Last updated on 14-Mar-2017 at 21:10 GMT

“Our strategic focus is the poultry vaccine segment of Lohmann,” says Elanco following its announcement yesterday of a deal to acquire the German animal health company.

Elanco Animal Health, a division of pharmaceutical giant Eli Lilly, will take over all assets of Lohmann SE and its subsidiary, Lohmann Animal Health when the acquisition is finalised in the second quarter of 2014.

These assets, said Elanco, include a range of vaccines and feed additives, commercial capabilities, and manufacturing sites in Cuxhaven, Germany and Maine in the US.

Lohmann, with a focus on the development of vaccines and food components to help prevent disease in livestock, also has 18 subsidiaries in Europe, Asia and North America.

Elanco would not disclose any other terms of the deal.

“We have a significant poultry business but the critical element in which we were lacking was on the vaccine side. The upshot of this deal is that our customers can now source poultry vaccines directly from Elanco,” said Pat O’Leary, Elanco regional leader for Europe, Middle East and Africa (EMEA).

And he told FeedNavigator.com that the feed additives segment of Lohmann was not the real draw for Elanco.

“The additives side, though comprehensive, is heavily commoditized and not the driver for the takeover,” said O’Leary.

He refused to comment on whether the additives segment would be divested in the future.

He also denied that the move to buy Lohmann Animal Health was triggered by the loss of revenue for parent company Eli Lilly through the expiration of major US patents on several drugs.

Pfizer vaccine acquisition

“Strategically, we have been focused on animal vaccines for some years. This interest was apparent in our acquisition of Pfizer's equine and other animal vaccine operations back in 2010,” added O’Leary.

Jeff Simmons, senior vice president of Eli Lilly and president of Elanco Animal Health said that the Lohmann deal complements Elanco’s mission to help the global food chain deliver a safe, affordable, sufficient food supply: “We believe innovation in food production is one of the most important ingredients to feeding a growing global population."

William Weldon, vice president of Elanco R&D said: “As the middle class grows in size and affluence throughout the world, the demand for eggs and poultry is growing rapidly. However, egg layer productivity is now shrinking after decades of increases. Delivering innovation to this industry is critical."

The acquisition is contingent upon clearance from regulatory authorities and other customary closing conditions.

Elanco parent company Eli Lilly lowered its financial outlook for 2014 because of the Lohmann transaction, saying it needed to factor in accounting adjustments and other costs.