Eli Lilly's Animal-Health Business Files for Initial Public Offering

(Bloomberg) -- Eli Lilly & Co.’s animal-health unit has filed for a U.S. initial public offering, formalizing the next step in the parent company’s move to focus completely on drugs for people.

Elanco Animal Health Inc. filed with an initial offering size of $100 million, according to a filing with the U.S. Securities and Exchange Commission, which is a placeholder amount that is likely to change. The separation is expected to be completed in the second half of the year, the parent company has said.

The offering is expected to represent an ownership stake of less than 20 percent in Elanco, Lilly said in a separate statement. The number of shares to be offered and the price range for the offering have not yet been determined, according to the statement.

Elanco could see a market value of as much as $20 billion, according to Bloomberg Intelligence. At that valuation, a share sale could raise as much as $5 billion.

Lilly began reviewing the animal unit’s future in December, and is hoping to repeat the success Pfizer Inc. had listing out its animal business under the name Zoetis Inc. Since becoming an independent company in 2013, Zoetis shares have more than tripled.

Elanco, based in Greenfield, Indiana, got its start within Eli Lilly in 1954, according to the filing. After the offering, the parent company will continue to own a controlling interest in Elanco.

The company lost $311 million on revenue of $2.9 billion in 2017. That compares to a net loss of $47.9 million on revenue of $2.9 billion a year earlier, according to the filing.

Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley are leading the offering. The company has applied to list its stock on the New York Stock Exchange under the symbol ELAN.

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