Abstract

Eli Lilly & Co. is mulling the future of its Elanco animal health unit, which is on track to have sales this year of roughly $3 billion. Stock analysts think the unit, which could be spun off, sold, or kept by Lilly, is worth between $12 billion and $15 billion. Lilly will decide the unit’s fate by mid-2018. The animal health business played a critical role in buttressing Lilly’s bottom line during a rocky few years of patent losses on many of its best-selling pharmaceutical products. But the unit has recently faced challenges at a time when the human health business is improving. In the third quarter, new medicines accounted for nearly all Lilly’s revenue growth. In a call with analysts to discuss Lilly’s third-quarter earnings, Lilly’s CEO, David Ricks, acknowledged that investors have for years questioned whether the animal health unit should stand alone. He said the timing is

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