Elanco Animal Health to acquire Aratana Therapeutics
Two veterinary companies with a successful working history are set to become one.
Since its founding in 2010, Kansas-based Aratana Therapeutics has become a major player in the animal health industry. Elanco Animal Health, a subsidiary of Eli Lilly and Co., has been a player for more than 60 years. Today, the companies announced that Aratana will be acquired by Elanco for $245 million.
The two companies have a history together. In 2016, Elanco agreed to pay Aratana $45 million to develop, manufacture and commercialize the canine osteoarthritis drug Galliprant (grapiprant).
According to company press releases, the deal is structured as a stock-for-stock transaction, with Aratana shareholders receiving 0.1481 share of Elanco stock and one contingent value right for each share of Aratana stock if the inappetence drug Entyce (capromorelin) achieves certain sales levels before the end of 2021. That results in a premium of about 40% on Aratana's current share price. The deal is contingent on Aratana shareholder approval and antitrust considerations.
Aratana has won regulatory approval for four drugs for use in companion animals, with the most recent, Nocita (bupivacaine liposome injectable solution), being approved in 2018. The company currently has several additional pipeline products in development for conditions ranging from atopic dermatitis and pain/inflammation to oncology.
“Aratana has been one of the most innovative startups in animal health, bringing breakthrough solutions to the market,” said Jeff Simmons, Elanco's president and CEO, in a company press release. “We look forward to putting greater energy behind these brands with our increased share of voice in the field while leveraging Aratana's strong presence in the specialty market. ... We believe the deal would bring greater value to veterinarians and pet owners, as well as both Elanco and Aratana shareholders.”
Earlier this year, Aratana founder Steven St. Peter resigned as CEO of the company. He is succeeded by Craig Tooman as president and CEO.
“This proposed transaction acknowledges Aratana's contribution of pet therapeutics to the animal health industry, specifically recognizing our strong track record as a drug developer and our field team's unmatched expertise delivering innovation to veterinary specialists,” Tooman said in the Aratana release.
The deal is expected to be finalized midyear. Aratana's board has already approved it unanimously.