Elanco Animal Health Inc at Piper Sandler Healthcare Conference Transcript

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

Question: David Westenberg - Piper Jaffray Inc - Analyst : Bob, I'll start with you. Do you have products that can really drive gross margins. What are your thoughts about margin expansion? How can -- how much can you attribute to gross margins in the coming years, especially since you have all this innovation that recently came out.

Question: David Westenberg - Piper Jaffray Inc - Analyst : Can you dive in a little bit further on Elanco and what we can expect from it?

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got you. And Bobby, I want to switch to you. The US pet health business has been transforming into a growth business. How has that happened?

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got it. Can you talk about some of the products. I'm going to start with Zenrelia what's the market potential for Zenrelia in the US? And can you talk contrast that a little bit with outside the US.

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got you. Let me switch back to Bob. Which specific innovation products beyond Quattro and Experior are expected to be the highest contributors to innovation revenue growth in '26. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 04, 2025 / 1:30PM, ELAN.N - Elanco Animal Health Inc at Piper Sandler Healthcare Conference

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got it. Maybe we could dive in a little bit more on the farm side. It's been programming really well. The macro inform despite the fact that, of course, the herd size has been smaller. It's been really, really good. What are some of the where are some of the things that investors might be overlooking about on the farm business because traditionally, look the pet health business a lot more.

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got you. And hopefully, I'm not jumping in front of Investor Day when I asked so I -- the margins is, I think, kind of actually unique to you. When I look at competitor portfolios in that farm animal business, I don't see necessarily a same kind of good margin relative and you have a portfolio that has MFAs and some of the others. So what's some of the efficiency that you have in the portfolio that you're able to actually drive that kind of EBITDA or operating margin in that portfolio.

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got you. Bobby, I want to move to you on the potential Quattro. Why is the ramp been so good? What strategy do you have to drive broad spectrum parasiticide market in. Obviously, this is still a pretty good growth market, and we're seeing very good transition from a single product.

Question: David Westenberg - Piper Jaffray Inc - Analyst : That's really helpful. So Bobby, continuing with you. We talked about the retail business and the hall and how traditionally have not necessarily been a big fan of retail business. However, your yours might be kind of unique and particularly around this time of low veterinary visit. So how should we think about that retail business as kind of a differentiation in your portfolio versus kind of your competitors?

Question: David Westenberg - Piper Jaffray Inc - Analyst : That's great. Maybe I can switch to both of you in terms of sort of thinking about that same theme, I mean all of us can see what kind of the macro visits have been looking like. Can you talk about leveraging your diverse portfolio plus PET and farm animal to mitigate the slow visit trends in that?

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got it. And maybe we can even stick with the same kind of concept in that the affordability in veterinary medicine. We've seen since since COVID 50% inflation in veterinary, so can you talk about some of the different channels and the balance of the portfolio given that big of the veterinary services inflation.

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got you. I want to talk about the -- and this is another one for both of you commercialization time lines, market penetration strategy alia, particularly in international markets where your label differs. And how does the US box warning impact the global strategy.

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got you. SP601171686 Okay. Moving on to Bob. You after driving a deleveraging strategy, I believe you've reduction two turns in two years. What's the time line to get below 3 times.

Question: David Westenberg - Piper Jaffray Inc - Analyst : All right. I want to talk about the IL-31 business. For a lot of investors, I don't know. I mean, I think the category of monoclonal antibodies, injectables has been growing a little bit faster than the small molecule version. So what can you talk about expectations around IL-31 and then the timing of it, particularly in light of we had maybe some impacts from the US government shutdown, maybe not, but I'd love to hear if there was any -- I mean.

Question: David Westenberg - Piper Jaffray Inc - Analyst : Yes. I just want to clarify, the first half launch -- approval so can you talk about your go-to-market model? And this is a follow-up on IL-31, but

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got you. I want to talk about maybe some of the competitor launches, Ascenda and what impact they could have on Elanco's market channel and pricing power in 2025 and 2026. Obviously, I think the products are going to watch competitor products are going to be more impactful next year than this year, but any way to think about these competitive launches.

Question: David Westenberg - Piper Jaffray Inc - Analyst : Right. Moving back to Bob on some of the financials. You had a recent refinancing. What changes ahead for capital structure CapEx expectations?

Question: David Westenberg - Piper Jaffray Inc - Analyst : Got you. So I'm sorry to get in front of this, but what can we expect to hear at Investor Day, you can give us at a high level to keep expectations.

Question: David Westenberg - Piper Jaffray Inc - Analyst : All right. We're out of time. Thank you very much.