Elanco Announces Acquisition of Prevtec Microbia Swine Vaccine Company

Elanco Animal Health Incorporated (NYSE: ELAN) today announced the acquisition of Montreal-based Prevtec Microbia Inc. (Prevtec), a biotechnology startup specializing in the development of vaccines that help prevent bacterial diseases in food animals.

Prevtec is the maker of the Coliprotec® line of vaccine products designed to protect pigs against post-weaning diarrhea (PWD) and associated clinical signs caused by E. coli. E. coli is a highly prevalent pathogen causing disease in swine production without effective non-antibiotic control options. It affects up to 50 percent of all weaned pigs, leading to diarrhea, suppressed appetite, weight loss and mortality. The disease has a considerable effect on animal well-being and is a major cause of economic loss for swine operations. In Europe, mortality due to PWD has an estimated cost of 15,000 € per year for a 500-sow herd.¹

“Elanco’s partnership with Prevtec has been very successful and has resulted in delivery of an important non-antibiotic solution for swine producers,” said Ramiro Cabral, executive vice president of International for Elanco. “This acquisition is another example of our approach to partner with companies to introduce novel innovation and further demonstrates our commitment to introduce antibiotic alternatives through internal or external innovation pathways.”

Elanco was the exclusive distributor for Coliprotec in Canada and Europe. These vaccine products are particularly important in Europe given the EU’s direction to phase out the use of the antibiotic colistin and zinc oxide, both among the ways producers’ protect against E.coli today. The transaction also brings Prevtec’s research and development programs to Elanco’s pipeline.

By acquiring Prevtec and bringing the Coliprotec line into Elanco’s swine portfolio, Elanco will look to expand registration to other key geographies. Offering a full range of alternative solutions is particularly important given alternatives do not typically have the same broad spectrum of activity antibiotics deliver. With more than 1 billion pigs marketed globally each year, pork is the most widely consumed protein and a significant market opportunity.

In the past year, Elanco has taken a number of strategic steps to advance the company for greater success in the swine industry. This includes launching the Prevacent™ PRRS vaccine and a recently announced agreement with AgBiome to deliver innovative probiotic solutions to producers’ greatest gut health challenges. These efforts further demonstrate Elanco’s commitment to antibiotic stewardship and represents now a full suite of alternatives from vaccines to nutritional health products like enzymes and probiotics to provide solutions to producers’ most difficult challenges.

Elanco is committed to bringing greater clarity and collaboration to issues around antibiotic stewardship. The company released an aggressive, multi-faceted 8-point Antibiotic Stewardship Plan in 2015 that includes 1) increasing responsible antibiotic use; 2) reducing the need for shared-class antibiotics; and 3) replacing antibiotics with alternatives to help livestock producers treat and prevent animal disease. The plan includes a commitment to deliver antibiotic alternatives, such as vaccines, enzymes and probiotics.

Under the terms of the agreement, Elanco acquired the company, including inventory and pipeline assets in an all-cash deal for CAD $78.5 million (approx. $59.9 million USD). The agreement also includes a contingent payment of up to CAD $21.5 million (approx. $16.4 million USD) to the former Prevtec shareholders in Q1 2022, if certain sales milestones are achieved in 2021.

About Elanco

Founded in 1954, Elanco provides comprehensive products and knowledge services to improve animal health and food-animal production in more than 90 countries around the world. We value innovation, both in scientific research and daily operations, and strive to cultivate a collaborative work environment for more than 5,800 employees worldwide. Together with our customers, we are committed to raising awareness about global food security, and celebrating and supporting the human-animal bond. Our worldwide headquarters and research facilities are located in Greenfield, Indiana.

About Prevtec Microbia

Prevtec Microbia is a Canadian biotechnology company developing and commercializing sustainable solutions as alternatives to antibiotics to improve animal health, production performance and food safety. Prevtec Microbia’s first commercial product, Coliprotec®F4, a swine E. coli vaccine, has been sold across Canada since 2007 and in the EU since 2015, and is approved in Brazil (2010) and in the US (2018). In early 2017, marketing authorizations were granted for Coliprotec® F4/F18 in the EU and Canada and, thereafter in Russia and the CIS countries. The Coliprotec® line of vaccines is completed with Coliprotec® F18, distributed in Canada since 2015. See more information at www.prevtecmicrobia.com.

This press release contains forward-looking statements (as that term is defined in the Private Securities Litigation Reform Act of 1995) about Elanco’s acquisition of Prevtec Microbia, and reflects Elanco’s current belief. However, as with any acquisition, there are substantial risks and uncertainties, including the fact that Elanco may not be able to successfully integrate the Prevtec Microbia business into Elanco’s current operations. For further discussion of these and other risks and uncertainties, see Elanco’s most recent filings on Form 10-K and Form 10-Q with the United States Securities and Exchange Commission. Except as required by law, Elanco undertakes no duty to update forward-looking statements to reflect events after the date of this release.

¹Amezcua R et al 2002. Can J Vet Res. 66:73-78.

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