- The strategic alliance connects two sustainability
leaders, Elanco, a leading animal health company, and Royal DSM, a
health, nutrition and biosciences company, to accelerate tangible
sustainable solutions in the U.S., supporting the Global Methane
Pledge goal of cutting emissions 30% by 2030.
- Elanco gains exclusive licensing rights to develop,
manufacture, and commercialize Bovaer® in U.S.
- Royal DSM will receive royalty income from Elanco’s U.S.
Bovaer® sales, including a single-digit millions upfront payment,
as well as a portion of product supply from Elanco.
- Bovaer® is expected to have blockbuster revenue potential for
Elanco in the U.S. market in excess of US$200 million, in the
estimated $1-2 billion global market for methane reduction from
cows.
- This alliance will nearly double the announced global supply
potential of Bovaer®, giving more farmers the opportunity to reduce
methane emissions, creating value and positive environmental
impact, contributing to health for the planet.
Elanco Animal Health Incorporated (ELAN: NYSE) and Royal DSM
have created a strategic alliance connecting two leading,
sustainability-focused companies to address one of society’s most
significant opportunities of the decade, mitigating climate change
by reducing greenhouse gas emissions from farming. Elanco has
secured the exclusive U.S. licensing rights to develop, manufacture
and commercialize Bovaer® for beef and dairy cattle.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220426006220/en/
Elanco and Royal DSM Announce Strategic
Alliance in U.S. for Bovaer® – A Revolutionary, Methane-Reducing
Feed Additive for Cattle (Photo: Business Wire)
Bovaer® is a first-in-class methane-reducing product for beef
and dairy cattle approved in Europe, Brazil, Chile and Australia.
As part of its authorization in those countries, more than 50
peer-reviewed studies and 48 on-farm trials in 14 countries show
Bovaer® consistently reduces enteric methane emissions by
approximately 30% for dairy cows and even higher percentages for
beef cattle1.
DSM and Elanco intend to seek U.S. authorization for the product
to provide farmers, dairy and beef companies, and retailers with a
solution to substantially lower the carbon footprint of beef and
dairy production, supporting the animal protein industry’s ESG
efforts and helping secure a sustainable future for the planet.
Based on published research, the methane reduction from feeding a
million cows Bovaer® is equivalent to planting 45 million trees or
removing 300,000 cars from the road. With 9 million dairy cows and
14 million beef cattle on feed in the U.S. alone, the product, if
authorized in the U.S., would contribute to a significant and
immediate reduction of the environmental footprint of meat and
dairy products, supporting the Global Methane Pledge to cut
emissions 30% by 2030.2
The strategic alliance is expected to enable both parties to
maximize the opportunity for the product in the U.S. market, once
approved, while also nearly doubling previously announced Bovaer®
production capacity globally. Elanco will be responsible for the
U.S. approval process, commercialization strategy and product
supply, supporting DSM supply in markets outside the U.S. Elanco
will assess and evaluate the regulatory submission and
manufacturing options with the intent to bring Bovaer® to the U.S.
market as quickly as possible. Already the State of Indiana, for
example, has indicated its support for expanded manufacturing
investment in the state as it continues to build public-private
partnerships supporting the state’s growing agriculture
economy.
“We are excited to partner with DSM to start the process of
bringing this game-changing innovation to U.S. livestock
producers,” said Jeff Simmons, president and CEO of Elanco. “It
will further strengthen Elanco’s efforts to create the livestock
sustainability market and the next era of value for farmers by
adding to our efforts to reduce, measure and monetize emission
reductions, including Experior™, Uplook™ and Athian. We are eager
to work with regulators to bring a unique innovation like DSM’s
Bovaer® to the U.S. market as quickly as possible to support
farmers and positively impact the climate crisis.”
Geraldine Matchett and Dimitri de Vreeze, Co-CEOs of Royal DSM,
commented: “This agreement marks an important milestone for DSM,
Elanco, and the climate change mitigation efforts of the U.S. We
believe Elanco, as a company that shares our determination to
revolutionize the sustainability of the cattle industry, is the
ideal partner to help us increase and accelerate the total impact
of our game-changing feed additive by bringing us closer to
customers across the U.S. This alliance will help us realize
Bovaer®’s potential as a powerful solution with a significantly
positive impact on the planet. In addition, and fully aligned with
our purpose-led performance-driven strategy, the alliance enables
us as DSM to monetize our long-term innovation faster.”
With an estimated global market opportunity for livestock
methane reduction of $1 billion to $2 billion, Elanco expects
Bovaer® to have blockbuster annual revenue potential in excess of
US$200 million in the U.S. market with initial contribution by
mid-decade. This alliance is not expected to impact Elanco’s
previously stated financial commitments.
ABOUT ELANCO
Elanco Animal Health Incorporated (NYSE: ELAN) is a global
leader in animal health dedicated to innovating and delivering
products and services to prevent and treat disease in farm animals
and pets, creating value for farmers, pet owners, veterinarians,
stakeholders, and society as a whole. With nearly 70 years of
animal health heritage, we are committed to helping our customers
improve the health of animals in their care, while also making a
meaningful impact on our local and global communities. At Elanco,
we are driven by our vision of Food and Companionship Enriching
Life and our Elanco Healthy Purpose™ Sustainability/ESG Pledges –
all to advance the health of animals, people, and the planet. Learn
more at www.elanco.com.
ABOUT ROYAL DSM
Royal DSM is a global, purpose-led company in Health, Nutrition
& Bioscience, applying science to improve the health of people,
animals and the planet. DSM’s purpose is to create brighter lives
for all. DSM’s products and solutions address some of the world’s
biggest challenges while simultaneously creating economic,
environmental and societal value for all its stakeholders –
customers, employees, shareholders, and society at large. The
company was founded in 1902 and is listed on Euronext Amsterdam.
More information can be found at www.dsm.com.
DSM has launched a series of quantifiable commitments aimed at
addressing urgent societal and environmental challenges linked to
how the world produces and consumes food. DSM’s Food System
Commitments including a double-digit reduction of on-farm livestock
emissions by 2030. The market introduction of Bovaer® is a major
step toward delivering on this commitment as well as the strategic
initiative of DSM’s Animal Nutrition & Health business group,
We Make It Possible, with its mission to lead a robust and
achievable worldwide transformation in sustainable animal protein
production. Learn more at www.dsm.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 , including,
without limitation, statements concerning expected regulatory
approval, product commercialization and revenue from Bovaer® and
the strategic alliance with Royal DSM. Forward-looking statements
are based on our current expectations and assumptions regarding our
business, the economy and other future conditions. Because
forward-looking statements relate to the future, by their nature,
they are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. As a result, our
actual results may differ materially from those contemplated by the
forward-looking statements.
For additional information about the factors that could cause
actual results to differ materially from forward-looking
statements, include the ability and timeline to [successfully
complete required clinical trials and] obtain regulatory approval;
competition to create products with similar effects; the ability to
successfully commercialize the product and scale production
capabilities; and other factors listed in Elanco’s latest Form 10-K
and subsequent Form 10-Qs filed with the Securities and Exchange
Commission. Although we have attempted to identify important risk
factors, there may be other risk factors not presently known to us
or that we presently believe are not material that could cause
actual results and developments to differ materially from those
made in or suggested by the forward-looking statements contained in
this press release. If any of these risks materialize, or if any of
the above assumptions underlying forward-looking statements prove
incorrect, actual results and developments may differ materially
from those made in or suggested by the forward-looking statements
contained in this press release. We caution you against relying on
any forward-looking statements, which should also be read in
conjunction with the other cautionary statements that are included
elsewhere in this press release. Any forward-looking statement made
by us in this press release speaks only as of the date thereof.
Factors or events that could cause our actual results to differ may
emerge from time to time, and it is not possible for us to predict
all of them. We undertake no obligation to publicly update or to
revise any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as may be
required by law.
1
https://www.dsm.com/content/dam/dsm/corporate/en_US/documents/summary-scientific-papers-3nop-booklet.pdf
2 https://www.globalmethanepledge.org/
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version on businesswire.com: https://www.businesswire.com/news/home/20220426006220/en/
Elanco Investor Contact: Katy Grissom (317) 273-9248
kathryn.grissom@elancoah.com Elanco Media Contact: Colleen Parr
Dekker (317) 989-7011 colleen.dekker@elancoah.com DSM Investor
Contact: Dave Huizing +31 (0) 45 5782864 investor.relations@dsm.com
DSM Media Contact: Mirelle van der Kreeft +31 (0) 45 5782420
media.contacts@dsm.com
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