GREENFIELD, IND. and SAN FRANCISCO — Elanco Animal Health Incorporated has agreed to acquire Kindred Biosciences, Inc. (KindredBio) for approximately $440 million, or $9.25 per share. Both companies specialize in animal and pet health solutions, and hope to leverage each other’s areas of expertise, research and development, and innovation capabilities to grow.
Elanco is most interested in accelerating its expansion into the animal dermatology category, a “fast-growing billion-dollar” market, according to the company. KindredBio expects to launch three animal dermatology “blockbusters” between now and 2025, which will advance Elanco’s own efforts to research, develop and bring to market leading products in this category.
“This highly complementary combination is focused in one of the most exciting spaces in pet health, and one where we see a strategic imperative to build a differentiated competitive offering,” said Jeff Simmons, president and chief executive officer of Elanco. “It further accelerates our mix shift into pet health and advances our IPP strategy. Ultimately, we believe the combination positions Elanco to bring innovative solutions to veterinarians and pet owners in areas of unmet or under-served medical needs, fueling continued growth in the exciting pet therapeutic category and creating sustainable long-term value for shareholders.”
Elanco stated its acquisition of KindredBio is expected to add roughly $100 million to its existing innovation revenue expectation, totaling $600 million by 2025.
“Kindred Biosciences’ monoclonal antibody pipeline and capabilities are additive and complementary to what we’ve built within Elanco,” said Aaron Schacht, executive vice president of 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.”
KindredBio and Elanco previously partnered on a global commercial licensing project for KindredBio’s canine parvovirus treatment, to which Elanco contributed.
“From the beginning, we have been focused at KindredBio on bringing the best medicines to our animal family members,” added Richard Chin, chief executive officer and co-founder of KindredBio. “With this transaction with Elanco, a widely respected leader in veterinary medicine with global reach, we will maximize the impact our innovative pipeline will have on improving the lives of pets.”
Elanco will also improve its omnichannel retail presence through the acquisition. Both companies’ reach in the veterinary clinic channel will further Elanco’s mission to “keep the veterinarian at the center” of its therapeutic pet and animal products. According to Elanco, “dermatologic symptoms such as scratching and allergies are the number one reason pet owners visit the veterinarian today.”
“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,” commented Denise Bevers, board director and co-founder of KindredBio. “KindredBio looks forward to continuing our mission to transform veterinary medicine as part of the Elanco family.”
Regarding the acquisition, Elanco reaffirmed its fiscal 2021 financial guidance, expecting between $1.23 billion and $1.26 billion in sales in the second quarter and between $4.67 billion and $4.71 billion for the full year.
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