By Michael Teich
Wall Street seems to have an appetite for Elanco.
Stock in the animal healthcare start-up that sells antibiotics for pets and livestock surged 50 percent in its market debut Thursday. Shares closed at $36 after pricing at $24 in the IPO ー a price that was already above the expected range of $20 to $23 a share.
Although the company may be relatively unknown to traders, Elanco is a household name among players in the animal healthcare industry, CEO Jeff Simmons told Cheddar.
“We may be new here on Wall Street, but we’re not new in the market for veterinarians and for farmers. We’ve been out there for more than six decades," he said.
Elanco, which spun out of pharmaceutical giant Eli Lilly in July, generates two-thirds of its $2.9 billion in revenue from drugs given to livestock ー cattle and chicken, for example.
The use of antibiotics in livestock has been a polarizing issue among consumers.
In its S-1 IPO filing, the company mentioned one risk to its outlook was the preference for dairy products produced without antibiotics.
Simmons, however, said the trend is actually an opportunity for the company and argued the medication creates safer food products.
“It all starts with a healthy animal. A healthy animal creates safe high quality meat milk and eggs,” he said. “We gotta come on and make sure that animal stays healthy.”
Food animal medicines and vaccines raked in $21.2 billion in revenue in 2017, according to research and consulting firm Vetnosis, and the industry is not expected to slow down any time soon.
According to data firm Research and Markets, the global market for animal healthcare is forecast to be worth $53.42 billion by 2025.
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