Elanco Signs Agreement with Dechra to Divest Osurnia to Dechra Pharmaceuticals PLC for $135M in Cash

Elanco Animal Health Incorporated (NYSE: ELAN) announced today it has signed an agreement to divest Osurnia®, a treatment for otitis externa in dogs, to Dechra Pharmaceuticals PLC (OTC: DPHAY) for $135 million in an all-cash deal.

Benzinga · 01/06/2020 10:05

Elanco Animal Health Incorporated (NYSE: ELAN) announced today it has signed an agreement to divest Osurnia®, a treatment for otitis externa in dogs, to Dechra Pharmaceuticals PLC (OTC: DPHAY) for $135 million in an all-cash deal.

Elanco has made the independent decision to divest global rights to Osurnia, which had 2018 annual revenue of $31.2 million, with intent to advance the previously announced acquisition of Bayer AG's (ETR: BAYN) global animal health business. The closing of the transaction with Dechra is contingent on Elanco entering into a consent decree with the Federal Trade Commission (FTC), the European Commission (EU Commission) and other agencies in connection with its Bayer transaction, as well as other customary closing conditions.

"We're very pleased with the pace of the process and productivity from our discussions with the FTC and EU Commission. This is an important step forward for our acquisition of Bayer Animal Health and we look forward to continuing to work constructively with regulators," said Jeff Simmons, president and CEO of Elanco. "Dechra is the right company with the right capabilities to take Osurnia forward, keeping this important product available for both veterinarians and pet owners."

Elanco continues to make solid progress in its discussions with regulatory authorities in relation to the acquisition of Bayer AG's animal health business. The company currently anticipates divesting a small portfolio of products across both organizations with total 2018 revenue of approximately $120 million to $140 million to achieve any required clearances globally. Elanco is in advanced discussions with both the FTC and EU Commission in regards to the remaining assets in those jurisdictions.

Discussions with other regulatory authorities are progressing as expected. Any proposed remedies and final clearance for the Elanco/Bayer transaction remain subject to review and approval from regulatory authorities.