IBJNews

Lilly called likely suitor for Novartis veterinary unit

Back to TopCommentsE-mailPrintBookmark and Share

Novartis AG’s animal-health business is drawing interest from drugmakers including Indianapolis-based Eli Lilly and Co. and Merck & Co. as the Swiss pharmaceutical giant prepares to sell the unit, people with knowledge of the matter said.

Bayer AG is also preparing for a potential auction of the unit, which makes Sentinel flea control tablets for dogs and the Vira Shield antiviral medicine for cattle.

Novartis hasn’t yet invited bids for the business and none of the potential bidders has made an offer, the people said. The company is working with Goldman Sachs Group Inc. on a review of its portfolio that may lead to a sale of the veterinary business, people said last month.

Drugmakers are weighing options for their veterinary units as they seek to boost the valuation that investors award those operations. Bayer is interested in expanding in animal health, CEO Marijn Dekkers said Tuesday. Merck said in October that its veterinary business may be divested or partnered outside the company, while Pfizer Inc. in June completed the spinoff of its Zoetis Inc. animal-health unit.

Citigroup Inc. analysts valued the Novartis veterinary unit at about $4 billion including net debt in October. Novartis does not publicly report separate financial results for the business.

Spokesmen for Eli Lilly and Merck declined to comment. Speaking at a conference in London Tuesday, Bayer CEO Dekkers and Novartis Chairman Joerg Reinhardt declined to comment on the animal-health business sale.

Eli Lilly has said it’s been more likely to do deals in animal health than in its human drugs business, and about a third of the unit’s growth in the last five years has been from acquisitions, chief financial officer Derica Rice said on an Oct. 23 call with investors.

“We’ve been probably more acquisitive in the animal-health space than we have been on the human-pharma side, and we continue to see business development as an opportunity to further leverage our organic growth,” Rice said on the call. The animal unit, called Elanco, had $2.04 billion in sales in 2012.

Reuters reported earlier that Bayer is a potential bidder for the unit.

Novartis is weighing the sale of several units, including the over-the-counter medicines unit and vaccines operation. The Basel-based drugmaker wants its businesses to be among industry leaders or it will consider divesting them, CEO Joe Jimenez said last month.

The company hasn’t made any final decision on whether to divest any units, Reinhardt said Tuesday.

Bayer acquired Teva Pharmaceutical Industries Ltd.’s U.S. veterinary business this year. The Leverkusen, Germany-based company last year considered bidding for Zoetis, which has a market value of $15.6 billion, before the spin off. In 2009 Bayer offered 6 billion euros to 7 billion euros for Schering- Plough Corp.’s Intervet unit. The sale of Intervet was later scrapped.

The German company’s veterinary sales dropped 0.9 percent, to $1.4 billion, in the first nine months of the year.

Merck’s animal health business is the second-biggest in the industry, the company says, with $3.40 billion in sales last year. Ken Frazier, Merck’s CEO, has talked about possibly selling or spinning off the unit in a move that could mimic Pfizer’s decision last year to do divest units and focus the company on developing new human drugs.

On a Oct. 28 call with investors, Frazier praised the business’s performance though also said he’s trying to “determine whether these businesses are more advantageous inside or outside the company.”

Steve Cragle, a spokesman for Merck today said the company is still evaluating the unit and sees it as an important part of the Whitehouse Station, NJ-based company.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I think the poster was being sarcastic and only posting or making fun of what is usually posted on here about anything being built in BR or d'town for that matter.

  2. Great news IRL fans: TURBO the IMS sanctioned movie about slugs running the Indy 500 has caught the Securities and Exchange Commission because Dreamworks had to take a $132MILLION write down...because the movie was such a flop. See, the Indy/IMS magic soiled another pair of drawers. Bwahahahahahaha! How's CARTOWN doing? HAHAHAHA...Indy is for losers.

  3. So disappointed in WIBC. This is the last straw to lose a good local morning program. I used to be able to rely on WIBC to give me good local information, news, weather and traffic on my 45 minute commute.Two incidents when I needed local, accurate information regarding severe weather were the first signs I could not now rely on WIBC. I work weekend 12 hour nights for a downtown hospital. This past winter when we had the worst snowfall in my 50 years of life, I came home on a Sunday morning, went to sleep (because I was to go back in Sunday night for another 12 hour shift), and woke up around 1 p.m. to a house with no electricity. I keep an old battery powered radio around and turned on WIBC to see what was going on with the winter storm and the roads and the power outage. Sigh. Only policital stuff. Not even a break in to update on the winter storm warning. The second weather incident occurred when I was driving home during a severe thunderstorm a few months ago. I had already gotten a call from my husband that a tornado warning was just southwest of where I had been. I turned to WIBC to find out what direction the storm was headed so I could figure out a route home, only to find Rush on the air, and again, no breaking away from this stupidity to give me information. Thank God for my phone, which gave me the warning that I was driving in an area where a tornado was seen. Thanks for nothing WIBC. Good luck to you, Steve! We need more of you and not the politics of hatred that WIBC wants to shove at us. Good thing I have Satellite radio.

  4. I read the retail roundup article and tried Burritos and Beers tonight. I'm glad I did, for the food was great. Fresh authentic Mexican food. Great seasoning on the carne asada. A must try!!! Thanks for sharing.

  5. John, unfortunately CTRWD wants to put the tank(s) right next to a nature preserve and at the southern entrance to Carmel off of Keystone. Not exactly the kind of message you want to send to residents and visitors (come see our tanks as you enter our city and we build stuff in nature preserves...

ADVERTISEMENT