Bolt-on Acquisition Accelerates Elanco’s
Expansion in Pet Health
Elanco to host conference call for investment
community at 8:00 am Eastern Time
- Elanco will acquire all outstanding stock of Kindred
Biosciences at a price of $9.25 per share, or approximately $440
million, a premium of 52% based on the 30-day average.
- Transaction brings three potential blockbusters in the
development phase, complements existing pipeline, and augments
monoclonal antibody R&D capabilities.
- Increasing Investor Day revenue from innovation expectation by
$100 million, to $600 million to $700 million by 2025, with
significant opportunity beyond the period.
- Differentiated, disruptive portfolio in atopic dermatitis and
other chronic unmet needs expected to unlock upside to Elanco’s
long-term growth algorithm, with the potential to add a full
percentage point of consistent annual revenue growth, starting in
2024, and expand the company’s margin over time.
- Transaction and operating costs slightly dilutive to Elanco's
reported and adjusted earnings per share in 2021 and 2022; net
leverage goal below 3x extended three months to the end of the
first quarter of 2024.
Elanco Animal Health Incorporated (NYSE: ELAN) and Kindred
Biosciences, Inc. (KindredBio, NASDAQ: KIN) today announced the
parties have entered into a definitive agreement for Elanco to
acquire KindredBio, a biopharmaceutical company focused on
developing novel pet therapeutics based on validated human targets.
The acquisition further accelerates Elanco’s expansion in the
attractive pet health market, particularly advancing Elanco’s
presence in the fast-growing billion-dollar dermatology
category.
KindredBio brings three potential dermatology blockbusters
expected to launch through 2025, as well as a number of additional
R&D programs for other chronic disorders and unmet needs,
including canine parvovirus. KindredBio’s innovative pipeline –
added to Elanco’s own organic efforts – meaningfully augments
Elanco’s ability to launch products, gain share, and grow in the
dermatology market through fully accretive revenue dollars. Elanco
anticipates the combination will add approximately $100 million to
its previously stated innovation revenue expectation of $500
million to $600 million by 2025, with significant opportunity
beyond the period.
“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 CEO 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.”
The acquisition agreement builds on Elanco’s existing
relationship with KindredBio, which began with licensing the global
commercial rights of KindredBio’s late-stage treatment for canine
parvovirus, and continues Elanco’s proven approach as an innovation
partner of choice.
“From the beginning, we have been focused at KindredBio on
bringing the best medicines to our animal family members. 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,” said
Richard Chin, CEO and co-founder of KindredBio.
“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,” added 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.”
The deal will expand Elanco’s omnichannel leadership
complementing the company’s e-commerce and retail position by
increasing its veterinary clinic presence in a leading therapeutic
category and keeping the veterinarian at the center. This continues
Elanco’s work to be a conduit for pet owners to the veterinarian.
Dermatologic symptoms such as scratching and allergies are the
number one reason pet owners visit the veterinarian today.
Transaction Details
Under the terms of the agreement, Elanco will acquire all
outstanding stock of Kindred Biosciences at a price of $9.25 per
share, or approximately $440 million, a premium of 52% based on the
30-day average. Elanco intends to fund the acquisition with
pre-payable debt. Elanco expects to extend its leverage objective
of under three times net leverage to Adjusted EBITDA by three
months, from the end of 2023 to the end of the first quarter of
2024.
Elanco expects to unlock upside to its long-term growth
algorithm, with the potential to add a full percentage point of
consistent annual revenue growth, starting in 2024, and further
expand the company’s margin potential over time. Transaction and
operating costs will be slightly dilutive to Elanco's reported and
adjusted earnings per share in 2021, with the impact expected to be
concentrated in the fourth quarter, and also slightly dilutive to
the full year 2022.
“Kindred Biosciences’ monoclonal antibody pipeline and
capabilities are additive and complementary to what we’ve built
within Elanco,” said Aaron Schacht, executive vice president
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.”
Elanco expects the transaction to close in the third quarter of
2021, subject to customary closing conditions, including approval
by KindredBio’s shareholders and clearance under the
Hart-Scott-Rodino Antitrust Improvements Act. KindredBio’s Board
has approved the proposed acquisition.
Elanco also reaffirmed second quarter 2021 revenue guidance of
$1,225 million to $1,255 million, and full year 2021 revenue
guidance of $4,670 million to $4,710 million.
Goldman Sachs is acting as financial advisors to Elanco and
Covington & Burling LLP is acting as legal counsel. Barclays is
acting as financial advisor to KindredBio and Morrison &
Foerster LLP is acting as legal counsel.
Conference Call and Webcast
Elanco will host a conference call for the investment community
today at 8:00 am Eastern Time to discuss the announcement.
Investors, media and general public can access a live webcast of
the conference call through the link posted on Elanco’s website at
https://investor.elanco.com/events-and-presentations/default.aspx.
A replay will also be available on the website shortly following
the call.
About Elanco
Elanco Animal Health Incorporated (NYSE: ELAN) is a global
leader in animal health dedicated to innovating and delivering
products and services to prevent and treat disease in farm animals
and pets, creating value for farmers, pet owners, veterinarians,
stakeholders, and society as a whole. With nearly 70 years of
animal health heritage, we are committed to helping our customers
improve the health of animals in their care, while also making a
meaningful impact on our local and global communities. At Elanco,
we are driven by our vision of Food and Companionship Enriching
Life and our Elanco Healthy Purpose™ Sustainability Pledges –all to
advance the health of animals, people, and the planet. Learn more
at elanco.com.
About Kindred Biosciences
Kindred Biosciences is a biopharmaceutical company developing
innovative biologics focused on saving and improving the lives of
pets. Its mission is to bring to pets the same kinds of safe and
effective medicines that human family members enjoy. The Company's
strategy is to identify targets that have already demonstrated
safety and efficacy in humans and to develop therapeutics based on
these validated targets for dogs and cats. KindredBio has a deep
pipeline of novel biologics in development across many therapeutic
classes, alongside state-of-the-art biologics manufacturing
capabilities and a broad intellectual property portfolio.
For more information, visit: www.kindredbio.com
Important Information for Investors and Stockholders
This communication does not constitute a solicitation of any
vote or approval in connection with the proposed acquisition of
Kindred Biosciences, Inc. (“KindredBio”) by Elanco Animal Health
Incorporated (“Elanco” and such proposed acquisition, the
“Merger”). KindredBio intends to file with the SEC and mail to its
stockholders a definitive proxy statement in connection with the
proposed Merger. BEFORE MAKING ANY VOTING DECISION, KINDREDBIO’S
STOCKHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE
PROXY STATEMENT (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO)
AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED WITH THE SEC WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT KINDREDBIO AND THE PROPOSED MERGER. The proposals
for the Merger will be made solely through the proxy statement.
Investors and stockholders may obtain copies of the proxy statement
and other documents filed with the SEC by KindredBio (when they
became available) free of charge from the SEC’s website at
www.sec.gov or by accessing
KindredBio’s website at www.kindredbio.com. In addition, a copy of the
proxy statement (when it becomes available) may be obtained free of
charge from Investor Relations at Kindred Biosciences, Inc., 1555
Bayshore Highway, Suite 200, Burlingame, CA 94010. Copies of the
documents filed with the SEC by Elanco (when they become available)
may be obtained free of charge from the SEC’s website at
www.sec.gov or by accessing Elanco’s
website at www.elanco.com.
Participants in the Merger Solicitation
Elanco, KindredBio, and certain of their directors, executive
officers and employees may be considered participants in the
solicitation of proxies from KindredBio’s stockholders with respect
to the proposed transactions. Information regarding the persons who
may, under the SEC rules, be deemed participants in the
solicitation of KindredBio’s stockholders in connection with the
proposed Merger and a description of their direct and indirect
interests therein, by security holdings or otherwise, will be set
forth in the definitive proxy statement that KindredBio intends to
file with the SEC when it becomes available. Information about
Elanco’s directors and executive officers is set forth in Elanco’s
definitive proxy statement for its 2021 Annual Meeting of
Shareholders, which was filed with the SEC on March 25, 2021.
Information about KindredBio’s directors and executive officers is
set forth in KindredBio’s definitive proxy statement for its 2021
Annual Meeting of Stockholders, which was filed with the SEC on
April 29, 2021. These documents may be obtained as indicated
above.
Cautionary Statement Regarding Forward-Looking
Statements
Statements included in this press release that are not a
description of historical facts are forward-looking statements.
Words or phrases such as “believe,” “may,” “could,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,”
“expect,” “should,” “would” or similar expressions are intended to
identify forward-looking statements, and are based on our current
beliefs and expectations. These forward-looking statements include,
without limitation, statements regarding the proposed acquisition
of KindredBio, the expected timetable for completing the
transaction, future financial and operating results, benefits and
synergies of the transaction, future opportunities for the combined
businesses and any other statements regarding events or
developments that Elanco believes or anticipates will or may occur
in the future. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. There are a number of important factors that could cause
actual events to differ materially from those suggested or
indicated by such forward-looking statements. These factors include
risks and uncertainties related to, among other things:
uncertainties as to the timing of the Merger; the possibility that
competing acquisition proposals will be made; the inability to
complete the Merger due to the failure to obtain KindredBio’s
stockholder adoption of the Merger Agreement or the failure to
satisfy other conditions to completion of the Merger, including
required regulatory approvals; the failure of the transaction to
close for any other reason; the effects of disruption caused by the
transaction making it more difficult to maintain relationships with
employees, collaborators, customers, vendors and other business
partners; the risk that stockholder litigation in connection with
the Merger may result in significant costs of defense,
indemnification and liability; diversion of management’s attention
from ongoing business concerns and other risks and uncertainties
that may affect future results of the combined company, including
the risks described in the section entitled “Risk Factors” in
Elanco’s and KindredBio’s Annual Reports on Form 10-K for the year
ended December 31, 2020 and Quarterly Reports on Form 10-Q for the
quarter ended March 31, 2021. All forward-looking statements are
qualified in their entirety by this cautionary statement and
neither Elanco nor KindredBio undertake any obligation to revise or
update this press release to reflect events or circumstances after
the date hereof, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210616005286/en/
Investor Contact: Tiffany Kanaga, 302-897-0668,
tiffany.kanaga@elancoah.com Media Contact: Colleen Parr Dekker,
317-989-7011, colleen.dekker@elancoah.com For KindredBio: Katja
Buhrer, 917-969-3438, katja.buhrer@kindredbio.com
Kindred Biosciences (NASDAQ:KIN)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Kindred Biosciences (NASDAQ:KIN)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024