Full Press Release Details
Investor Contact: Tiffany Kanaga (765) 740-0314 tiffany.kanaga@elancoah.com
Media Contact: Colleen Parr Dekker (317) 989-7011 colleen.dekker@elancoah.com
Elanco Investor Day Defines New Era as Sustainable
| Announces restructuring as part of Elanco Ascend to support margin expansion, optimize footprint and further increase innovation capacity. Creates an expected restructuring charge of approximately $175 million, of which approximately $130 million is expected to be cash-based costs. Expects savings of approximately $25 million in 2026 and approximately $60 million in 2027. | ||
| Reaffirms Q4 and full year 2025 revenue and adjusted earnings guidance. |
INDIANAPOLIS, Ind. (Dec. 9, 2025) - Elanco Animal
Health Incorporated (NYSE: ELAN) hosts its first Investor Day in five years this morning, marking a pivotal moment as the company further
defines its new era of sustainable growth and long-term value creation. Elanco will detail how its consistent Innovation, Portfolio,
and Productivity (IPP) strategy is designed to guide the company's transformation to a sustainable growth company, delivering consistent
mid-single digit organic constant currency revenue growth and adjusted EBITDA margin expansion, while further strengthening its balance
sheet and accelerating cash flow.
"Today is a pivotal day for Elanco. We stand as a stronger Elanco
ready for our next chapter as a sustainable growth company," said Jeff Simmons, President and CEO at Elanco. "As we outline
our financial outlook for the next three years, we are poised for significant growth. Our IPP strategy is delivering, our innovation
engine is stronger than ever, and our team has built deep, lasting customer relationships that reinforce our confidence in our ability
to win in the animal health market. Elanco is well-positioned to continue transforming, building a future where we expand our leadership
and achieve consistent, reliable delivery against our priorities of growth, innovation and cash. We will bring high-impact innovation
to customers - ultimately driving sustainable shareholder value while making life better for animals and the people who care for
Financial Outlook for Consistent Growth
Elanco will outline a new three-year financial outlook with the expected
annual results beginning in 2026, underscoring the company's confidence in delivering strong, consistent performance:
American Investment Driven by Tax, Tariff and Regulatory Clarity
Elanco today announces continued investment in its U.S. operations,
work force and communities over the next five years. This investment deepens Elanco's commitment to product innovation, advanced
manufacturing and its customers - farmers, veterinarians and pet owners. The company will expand its R&D presence in its
new Indianapolis global headquarters and surrounding OneHealth Innovation District, while continuing to invest in its U.S.-based
manufacturing footprint. Elanco will further invest in its Kansas monoclonal antibody (mAb) manufacturing facility to support innovation,
particularly a major next generation immuno-therapeutic pet innovation. The U.S. Department of Agriculture (USDA) has granted an accelerated
pathway for conditional approval of a novel immuno-therapeutic that has the potential to be a first-in-class major pet health blockbuster,
expected in the next 2-3 years.
Additionally, as part of the positive engagement with the USDA, Elanco
announces significant progress in the final steps of the approval of Befrena , its newest potential blockbuster product.
Review of all technical sections and label alignment is now complete, with the final administrative review underway at the USDA. Befrena
has demonstrated differentiated efficacy in treating dogs with allergic dermatitis and canine atopic dermatitis. In both laboratory and
field studies, Befrena has shown to be safe and well-tolerated, offering a dependable treatment option for veterinary professionals and
pet owners alike. Befrena will offer important efficacy, convenience and value differentiators. Elanco continues to expect a first
In connection with these investments, Elanco expects the 2026 net
tariff impact to be immaterial to adjusted EBITDA growth, given additional tariff clarity and a positive offset from an incremental price
The combination of a favorable tax environment from the One Big Beautiful
Bill Act, regulatory reform resulting in improved timelines for USDA regulatory reviews and greater certainty on tariffs has created
favorable conditions for the continuation of U.S. investments in R&D and manufacturing, while bringing key innovation capabilities
from Europe to the U.S.
Innovation: Delivering a Consistent Flow of High-Impact Innovation
Since defining its basket of innovation in December of 2020, Elanco
has repeatedly raised the bar on its innovation target. Elanco now expects this innovation to generate approximately $1.1 billion
in revenue in 2026, an increase of over $200 million from $840 to $880 million expected in 2025.
Looking ahead at Elanco's next wave of innovation, the company
has increased its target innovation areas to eight and added two new major internal development platforms with monoclonal antibodies
(mAbs) and immunotherapy. Elanco has 10+ major innovation projects with blockbuster potential in development, expecting
approvals for 5-6 major differentiated assets from this pipeline between 2026 and 2031. These differentiated pipeline
assets represent an unprobabilized potential peak sales value of more than $2 billion - effectively doubling the value of the last
"Over the past several years, Elanco has created a one-of-a-kind
innovation powerhouse that has maximized capacity and throughput, delivering a continuous flow of differentiated products," said
Dr. Ellen de Brabander, Executive Vice President of Innovation and Regulatory Affairs at Elanco. "There are more projects and more
value in the pipeline than ever, and we've added cutting edge in house monoclonal and immunotherapy technology development platforms.
We will continue to invest in the capacity and capabilities to bring new solutions to market that help pets live heathier, more active,
longer lives and help farmers improve animal health, welfare and sustainability."
Diverse Market-Leading Portfolio: Positioned for Sustained Growth
Elanco is innovating in large, growing markets, supported by a strong,
diverse portfolio. This includes leading growth in U.S. Pet Health and #1 positions in global pet retail and poultry, U.S. beef and swine.
Elanco expects to double revenue from its Big 6' potential blockbuster products from 2025 to 2028 as it globalizes
this basket of innovation (AdTabTM, Befrena, Bovaer , Credelio QuattroTM, Experior , ZenreliaTM).
Productivity: Driving Margin Expansion and Free Cash Flow
Elanco's commitment to operational excellence and financial discipline
is a cornerstone of its strategy, with a clear path to expanding margins, improving free cash flow and becoming a simpler, more efficient
company. The company anticipates meaningful adjusted EBITDA improvement with high single-digit percentage growth, and free cash flow
generation increasing through the period.
Elanco is also announcing organizational changes designed to generate
approximately $25 million and $60 million in savings in 2026 and 2027, respectively, as part of its Elanco Ascend productivity initiative.
These strategic adjustments include:
Approximately 600 roles will be impacted across Elanco with 300 eliminated
positions and 300 shifted to other areas or locations. The company expects a charge of approximately $175 million, of which about $130
million is expected to be cash based.
In total, the company expects its Elanco Ascend program to deliver
$200 to $250 million in adjusted EBITDA savings by 2030, with about 30% achieved in 2026.
"Our goal is clear: consistent, reliable delivery," said
Bob VanHimbergen, Executive Vice President and CFO at Elanco. "We are taking the steps needed to become a more efficient, productive
company, ensuring our resources are in the right places to fuel our no-regrets launches and invest in our pipeline while deleveraging
and delivering on adjusted EBITDA margin growth. As we move into the second half of the decade, Elanco expects to deliver durable, profitable
growth and sustained cash generation while creating lasting value for shareholders.
In conjunction with today's event, Elanco is reaffirming its
fourth quarter and fiscal 2025 outlook, provided on November 5, 2025, other than reported net loss and net loss per share, which will
be impacted by the aforementioned restructuring charges.
Elanco will host a webcast
from approximately 9 a.m. to 12 p.m. Eastern Time today, featuring presentations from Elanco's senior leadership team on the company's
strategic priorities, financial outlook, and innovation pipeline - defining Elanco's new era as a sustainable growth company. Access
for the live webcast and related materials is available on Elanco's Investor Events and Presentations website. A replay will be available
on the website following the event.
Elanco Animal Health Incorporated (NYSE: ELAN) is a global leader
in animal health dedicated to innovating and delivering products and services to prevent and treat disease in farm animals and pets,
creating value for farmers, pet owners, veterinarians, stakeholders and society as a whole. With 70 years of animal health heritage,
we are committed to breaking boundaries and going beyond to help our customers improve the health of animals in their care, while also
making a meaningful impact on our local and global communities. At Elanco, we are driven by our vision of Food and Companionship Enriching
Life and our purpose - all to Go Beyond for Animals, Customers, Society and Our People. Learn more at www.elanco.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the
meaning of the federal securities laws, including, without limitation, statements concerning product launches and revenue from such products,
our 2025 full year and fourth quarter guidance and long-term expectations, our expectations regarding debt levels, and expectations regarding
our industry and our operations, performance and financial condition, and including, in particular, statements relating to our business,
growth strategies, distribution strategies, product development efforts and future expenses.
Forward-looking statements are based on our current expectations and