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Taking advantage of the success of their partnership in the fight against pain, Elanco Animal Health on Friday announced its intention to swallow its collaborator Aratana Therapeutics in connection with a transaction worth up to $ 245 million.
Elanco Animal Health $ ELAN, a subsidiary of Lilly's parent company LLY $ last year, is interested in the Kansas-based pet-care company, Aratana $ PETX, since its inception, when She was investing as a sponsor in Cultivian, a venture capital fund involved in Aratana's early fundraising rounds. In 2016, Elanco and Aratana joined forces to develop, manufacture and market Galliprant, a pain medication for osteoarthritis in dogs, which generated a turnover of $ 44 million in 2018 and is gaining more and more market share due to the need to develop safer alternatives to pain for NSAIDs. dose and launch option in Europe.
Aratana also brought two other products marketed to the arsenal of Elanco: Entyce, the only FDA-approved appetite-boosting treatment in dogs, and Nocita, a long-acting local anesthetic that provides up to 72 hours of postoperative pain relief following certain surgeries. in dogs and cats.
Elanco's revenues are focused on three targeted areas: pet disease prevention, pet therapy and protein and animal feed health, which currently account for 61% of sales. , wrote in a note last month analysts Cowen. 66% from here 2024.
The transaction will strengthen Elanco's position on the pet market, which accounts for 36% of sales, said Credit Suisse's Erin Wright in a note on Friday.
Aratana is an attractive prospect, with its portfolio of five product candidates under development for diseases such as atopic dermatitis, which could potentially accelerate Elanco's entry into the fast-growing market in order to compete with Apoquel and Cytopoint, the product Zetis flagship $ ZTS, said Wright.
Aratana's existing products could also benefit from Elanco's broader presence in the United States and the ability to seek international approvals, Elanco said.
According to Credit Suisse analysts, the Animal Health Area (AH) is ready to be consolidated.
"Sector consolidation (I) is based on the need for AH companies to expand their business opportunities in geographic areas and in tangential businesses to reduce their exposure to a region, a product line or any species. It is clear that this view is shared by the animal health industry actors, who have been active in the field of transactions … We continue to consider AH as an attractive alternative health game, with benefits inherent to human health care with more efficient R & D operations, more sustainable product portfolios, limited generic threats, and essentially no direct exposure to the payor's repayment cuts. "
The Elanco / Aratana transaction – which is expected to close in mid-2019 – is structured as a stock purchase transaction, with a potential cash value (CVR) right of $ 0.25 to be granted to shareholders of Aratana at the Closing Date if Entyce achieves certain levels of sales by the end of 2021. The Share's share of the Transaction is estimated at approximately $ 234 million, but with the addition of the CVR, it could to reach $ 245 million.
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