Elanco Animal Health Inc at Barclays Global Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Balaji Prasad - Barclays - Analyst : <_ALACRA_META_ABSTRACT>As we look into 2025, and I'm sure market especially understands the FX narrative, that's things beyond our control, but I look to 2025 and Elanco, think you have your task cut out in terms of some of the new launches. But help us understand the key pushes and pulls towards the 2025 outlook and also the guidance that you provided?

Question: Balaji Prasad - Barclays - Analyst : Todd, that's a pretty nice summary of all the new launches and the recent and current launches, which have been which have been done. And clearly, there's a lot going on with the business side. I would love to dig into each of it. But before that, maybe a couple of high-level questions still especially around the guidance, 4% to 6% top line growth. And I'm sure investors can pass so that there is the reported growth numbers, which look different. But as I think about this guidance, what are the key upside risks to this guidance to achieving the high end of the revenue? I mean you've had six consecutive quarters of grade growth, which is great. But as we think about 2025 and what will take you to 6% growth?

Question: Balaji Prasad - Barclays - Analyst : Got it. And so maybe taking Credelio Quattro first. As I said, clearly, covered a chink in the armor, so to say, for you and you launched it earlier. So what can you tell us about what you have seen in terms of traction in the first few weeks? What's been the feedback, if any, from the field, both from the veterinarian side and maybe your own reps?

Question: Balaji Prasad - Barclays - Analyst : Sure. And clearly, I think all three of these differentiators and help you drive the uptake. And you had mentioned in your earnings call that you're seeing initial distributor update being faster exceeding expectations. So can you elaborate a bit more on this? And in terms of how we should think about uptake or at least in 1Q or the rest of the year?

Question: Balaji Prasad - Barclays - Analyst : Got it. And when you have a major product launch coming through and competitors obviously have been aware of this launch coming through. Are you seeing any kind of competitive response from Zoetis [Boringer] and what they're doing?

Question: Balaji Prasad - Barclays - Analyst : Is it more a function of the fact that you feel confident in the market's ability to absorb three products and not have like any competitive action there?

Question: Balaji Prasad - Barclays - Analyst : Okay. Great. And as we approach the flea-tick season, the planting season, is there going to be any change in your launch in your current launch strategies, which are underway? Or do you need to adopt to?

Question: Balaji Prasad - Barclays - Analyst : There's nothing to change. And lastly, would you like to leave any comments on the market share that you expect over the next coming years with this as one-three year goal as to where you would like to see this product to say that this has been a spectacular launch for you.

Question: Balaji Prasad - Barclays - Analyst : Shifting from Credelio Quattro to Zenrelia, you made other major launch -- so what can you tell us about what you've seen in the initial wave of pet owners who adopted Zenrelia? And anything that's standing out for you, which helps you to augment or improve your launch further?

Question: Balaji Prasad - Barclays - Analyst : Got it. And clearly, I get your message on efficacy. I think that was a message which was resonating with vets when we saw them at BMX. But as we think about the market penetration all, I think you recently had mentioned that it's being used in around 8,000 US clinics, which represents 30% penetration. So speak to us more about this penetration level? How do you expect to see this evolve through the course of the year? And where do you think you can get in terms of... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 1:00PM, ELAN.N - Elanco Animal Health Inc at Barclays Global Healthcare Conference

Question: Balaji Prasad - Barclays - Analyst : And also, as you mentioned, your goal wanting to position this with the first line. So maybe a good time to actually think about the broader market. Can you help us understand the TAM in terms of patient pet population for atopic demtitis? And within that, what percentage of the TAM is like those who have not been managed on the currently existing products and what is accessible to you as an easy market?

Question: Balaji Prasad - Barclays - Analyst : Got it. And commenting on outside the US market and clearly, your label is less restrictive there in a US regions. So be it Canada, Brazil and Japan. So can you highlight the key differences in the label between the US and ex US markets?

Question: Balaji Prasad - Barclays - Analyst : Right. And this is clearly what's driving a greater penetration also outside the US markets, right, in the US markets?

Question: Balaji Prasad - Barclays - Analyst : Got it. And Todd, I think one of the things which is -- which I get a lot of questions around from investors is around Merck's product, and there's not much at least out there in the public domain on it. So how much does it weigh on your thoughts as you think about the competitive dynamics? And what should we think about this next-gen product that they are working on the dumb side of things? Any comments there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 11, 2025 / 1:00PM, ELAN.N - Elanco Animal Health Inc at Barclays Global Healthcare Conference

Question: Balaji Prasad - Barclays - Analyst : Okay. We look forward to any news from that side when it comes about. Lastly, within the -- on the DTC program, how is it tracking? And when can we expect to see the impact of the DTC program being filled through on the numbers

Question: Balaji Prasad - Barclays - Analyst : Got it. Maybe with a few moments remaining I want to spend some time on livestock. And I remember asking Jeff in 2022 with Experior will be a blockbuster in a three-year time span or a five-year time spend. Obviously, I didn't get an answer and kind of I was thinking of a five-year time spend, but pleased to see how well the product has gained traction, make such a huge difference positive difference, too. So help us understand how much of the livestock performance in 2024 was Experior led? And as we think about the this year, what are the key factors which can accelerate expert our growth?

Question: Balaji Prasad - Barclays - Analyst : Got it. And on the question of Experior life products, Bower, again, I mean, you can understand that expectations will be high for the product now after Experior. How should we think about the launch curve? Can you kind of put us -- put out a range there in terms of what would be good first year traction for this product?

Question: Balaji Prasad - Barclays - Analyst : Got it. And you called out the -- each of the key livestock segments earlier, and especially poultry, as we think about it. Can you comment on the broader poultry market and the drivers or headwinds that you are seeing here I think of major competitor speaks very highly about vector vaccines in the power market. What are the innovations that we can expect from you to come in this segment?

Question: Balaji Prasad - Barclays - Analyst : Got it. 90 seconds left, I have like a dozen questions left. So I'll choose one. OpEx side of things. I mean 2024, obviously, will be a big investment year for you given that launches are ramping up and you want to support new launches too. How should we think about operating leverage in the space beyond 2025 and good longer-term goal that you're working towards?

Question: Balaji Prasad - Barclays - Analyst : Got it. And Todd, I think us is reaching out to also kind of figure out what would be good difference names to look at, especially in these times. And for me, I think the animal health space is one of (inaudible) one of the safest difference to your vets is what I'm flagging out there. And clearly, you're there as the number two player in this company. Any thoughts around the broader market volatilities and how you think Elanco is well positioned to ensure that growth is intact?

Question: Balaji Prasad - Barclays - Analyst : Okay, great. Todd, thank you so much for your thoughts and comments. Great having you over here and I wish you a very productive conference.