(ELAN) Possible Profits from Animal Health Spinoff
Eli Lilly's (LLY) IPO and eventual spin-off of its animal health care division, Elanco (ELAN), could be an interesting deal for special situation investors. Industry & Company: Zoetis (ZTS) management believes the animal health industry will continue its robust growth from the last five years as it grew from $26 Billion to $32 Billion at the end of last year, and will add another $9 Billion over the next 5 years. This equates to a GDP beating 5% annual growth rate. Even as threats of economic struggles approach the general economy – this industry, which splits revenues between meat production and pet health, should see its sales fairly resilient since families will likely continue eating meat, and buying medicine for their pets. Elanco is a wholly-owned subsidiary of LLY. LLY is projecting ELAN to produce approximately $3B in revenue for 2018. This projection is in-line with previous years’ sales. ELAN has shown decent revenue growth, mostly through acquisition, as