Elanco Animal Health Inc at JPMorgan Healthcare Conference Transcript

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

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Well, thank you for those comments. If I can transition over here. I thought I might just start the Q&A with just a little bit more digging into Zenrelia a bit more. What can you tell us about the initial pet owners that are adopting the products. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 14, 2025 / 11:00PM, ELAN.N - Elanco Animal Health Inc at JPMorgan Healthcare Conference I mean, is there any specific characteristics that are standing out? Are these -- you mentioned tougher to treat animals, but these like Apoquel failures, are they novel patients, just help us a little bit there.

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : And just on that initial piece, what percent of Apoquel users from your research have struggled with the product? And how big a percent of the market could that be?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Encouraging, yeah, excellent. On the DTC program, how quickly do you typically expect a response from when you launch that to when it starts to pull through?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : In terms of competitive response, anything surprising so far or anything you'd note?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Great. And maybe another one on the competitive front, Merck, expected to come into the market this year. What does the third player do into the space? Does that change pricing dynamics or anything you think about there?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : On the label, talking about the path to improve the label given some of the data you've generated?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : That angle coming in. Maybe one -- last one on the derm. Just updates on IL-31, just kind of time lines around that. Any additional color on how do you think about that program? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 14, 2025 / 11:00PM, ELAN.N - Elanco Animal Health Inc at JPMorgan Healthcare Conference

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Excellent. Shifting over to Quattro. Just talk latest thoughts about launch here, how should we level set just the ramp and what to anticipate as going to this year?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Another one, just talking about competitive dynamics. I know this market segment has been growing really nicely. How do you think about competitive -- how difficult is it to dislodge share in the space?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Maybe one last one on the kind of like the pet innovation side. What's next? What are you guys most excited about as you think about the next wave of assets?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : When I -- as we transition to Farm Animal, I was noticing on the slides, it seems like as you think about your pipeline, how that's built out, it's been pretty balanced in terms of the revenue contribution from farm versus pet. As we think about the next five years, is there still -- is there a balance? Or does it pivot more towards pet as we think about the growth of the company?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Great. On the farm animal side, '24 was a great year for you guys. How much of that was Experior versus the rest of the portfolio? Help us understand kind of the drivers of that growth.

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Bovaer, just how do we think about the launch curve for a product like this? And how should we think about uptake?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Great. Maybe just pivoting to financials from here. I know you had some comments on the third quarter call around EBITDA for 2025. Just remind us how you're thinking about this year and any changes relative to how you were thinking about this a few months ago?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Can you just elaborate a little bit on -- beyond '25. What -- how do we think about that gross margin improvement in the business and what the cadence of that should look like or --

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : How do I think about -- I know '25 is a big investment year as it should be with these launches. How do I think about that absolute OpEx base as we kind of roll into 2016 and beyond? Is that a good absolute level of spend? Or should we expect that there's still additional I guess, nodes of investment you'd make over time.

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : So when I think about the margin story, is it mostly gross margin? Or is SG&A also going to be a component of that over time? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 14, 2025 / 11:00PM, ELAN.N - Elanco Animal Health Inc at JPMorgan Healthcare Conference

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Great. Maybe one last quick one if I can sneak it in here. Just pet owner, as you think about both the Rx and OTC side. Anything notable in terms of maybe a more difficult economic environment. Are you seeing any of that flow through to your business at all?

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : Great. We are at time. Thanks so much for joining today. Appreciate the time.