Eli Lilly's ($LLY) animal health business, Elanco, provides a bit of a bright spot in an otherwise weak earnings report for its second quarter, with sales globally up more than 10%, while revenues across the entire company were up just 1%. And in a bit of news, the Indianapolis-based drugmaker said it was selling the feed additive business of Lohmann, the German animal health company it acquired in April.
The Lohmann acquisition helped push Elanco's worldwide animal health sales to $601.2 million, an increase of 11% compared with the second quarter of 2013, the company reported July 24. It closed the Lohmann deal April 30, but the company sales from that operation added 4% to animal health sales for the quarter. Elanco sales in the U.S. were $331.8 million, up 3% as volume declines in companion animal products held back larger volume sales of food animal products. Outside the U.S., Elanco saw sales of $269.4 million, a 21% jump, driven primarily by higher volume for food animal products.
Lilly also said that it had determined that the Lohmann feed additive business was "nonstrategic to Lilly's Elanco animal health unit." It has an agreement to sell it to a group led by Lohmann managers for an undisclosed amount.
The company said it is now focusing on completing the acquisition of Novartis' ($NVS) animal health unit. "The company is also working to complete the acquisition of Novartis Animal Health by the end of the first quarter of 2015, which will help position Elanco to become the world's second largest animal health company," the earnings report said. In April, Lilly announced an agreement with Novartis to buy its animal health unit for $5.4 billion, nearly 5 times Novartis' Animal Health's 2013 revenue of $1.17 billion.
- here's the earnings report
Special Report: Top 10 animal health companies of 2013 - Elanco