Elanco Animal Health Inc to Discuss the Zenrelia Approval Call Transcript

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

Question: Jon Block - Stifel Europe Bank AG - Analyst : Thanks, guys, and congrats on the approval. I think, the first one, I'll ask Jeff and Bobby, just the approach to the market -- and I'll try to throw in a handful here, but is the pricing consistent across your four SKUs like Apoquel's three, or is it weight dependent? And hopefully that made sense. And then just more broadly speaking, almost all vets, pardon me, all for Apoquel, is there a goal of how many US practices could adopt this by year-end, Bobby? You talked about trying to really get it into the hands of the vets and into practices. And then, Jeff, sorry, just to throw in a third to the first question, any update on timing of the EU approval?

Question: Jon Block - Stifel Europe Bank AG - Analyst : Okay. That was great, thanks. And I'll pivot for my second question. [I'll go to you] in great details on the head-to-head, and thanks for all that information. It seems like using Zenrelia in acute and seasonal seems pretty straightforward and clear. But we'd love to get some details from you on how you think your colleagues will approach Zenrelia for chronic. Is it just confusing and they may stay away? Is the washout period going to give them enough comfort? And maybe the last thing to throw out you, the booster data, which seems imminent from Elanco, I think you guys talked about maybe October, would that be something where your colleagues say, that's real world. That's how it really will work with dogs 12 months or older, and maybe that gives them enough confidence to go ahead and use it more frequently in chronic, where most of the dollars reside. Thanks for your 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. SEPTEMBER 20, 2024 / 12:00PM, ELAN.N - Elanco Animal Health Inc to Discuss the Zenrelia Approval Call

Question: Michael Ryskin - BofA Securities Inc - Analyst : Great. Thanks for taking the question. Kind of follow up on some of the points that Jon brought up before me. Bobby, maybe this is putting it a little bluntly, but some of your comments at the end, in terms of, first, you're going to position Zenrelia and make sure the vets stock it and slowly get used to it, and over time, maybe they'll even prefer it to Apoquel. That kind of sounds to me like you're positioning it as a second-line treatment to begin, and then over time, again, once you build that experience and familiarity with it, it will start to really compete with Apoquel and essentially displace it. Is that a fair assessment? I'm just thinking about the vaccine use cases that you talked about, just the added work that goes into it from the vet's perspective of having to juggle the timing of when they can use it, how they can use it. You talked about the seasonal component just now, but there are also occasionally emergency vaccines. So there's just added risk around that. So how would you describe that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 20, 2024 / 12:00PM, ELAN.N - Elanco Animal Health Inc to Discuss the Zenrelia Approval Call

Question: Michael Ryskin - BofA Securities Inc - Analyst : Yes, sure, just a follow up. Bobby, you talked about being able to place units immediately. Anything you can talk about manufacturing capacity, inventory you already have on hand? As you said yourself, there's going to be a potential for a nice immediate rollout of the drug as that's reached for that second option. So just talk about capacity that's available for the next three to six months. If you could put a dollar amount on it and sort of what your mapped capacity is, that would be helpful. Thanks.

Question: Balaji Prasad - Barclays Bank PLC - Analyst : Thanks for the color. just a couple. Firstly, thoughts around pricing. So why is the price lower when you're only the second player in the market, have data that you believe or know is better and there's a clear need by vets for more tools to treat atopic dermatitis? Or maybe just to put this differently, did you expect a challenging market conversion if you had priced it at par? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 20, 2024 / 12:00PM, ELAN.N - Elanco Animal Health Inc to Discuss the Zenrelia Approval Call That's the first question. Secondly, I also wanted to get your thoughts around how would you position this versus Apoquel chewables where there is a certain treat element to the pet that it's a reward element to the pets with the chewables. And I guess it also boils, leads to another thing, which is -- is it reasonable to assume that chewable is not that works at Elanco?

Question: Brandon Vazquez - William Blair & Company LLC - Analyst : Congrats on the approval. I wanted to focus, I think we were talking a little bit about this before, but I'll ask it slightly different. If I'm looking at the TAM estimates you guys provided this morning, I think it's about 65% of the market is specific to allergy. And I think your head-to-head study is in atopic derm specifically, and the FDA labels for allergic outcomes were pretty different for Zenrelia and Apoquel. Maybe this is a question for Dr. Dr. Tugel, talk to us about how you think vets are going to see this? What level of data do you have within allergy given that, that seems to be most

Question: Michael DiFiore - Evercore ISI International Ltd. - Analyst : This is Mike DiFiore in for Umer. First, congrats on the approval. Thanks for taking my question, two for me. I just want to drill down on the specific adverse events in the label. One of the more, I guess, salient areas of differentiation between Zenrelia and Apoquel is on rabies. In fact, if you read the FOI document for Zenrelia, the language on public health concerns since regarding rabies, it does come up, whereas in Apoquel, there's really no issue. So my question is perhaps for that community is like how big of a difference or a deal breaker is this, especially since I think -- I believe rabies vaccinations are given once a year. And then I have a follow-up.

Question: Michael DiFiore - Evercore ISI International Ltd. - Analyst : Got it. Okay. And then my follow-up is just regarding the timing before -- the timing of discontinuation of Zenrelia before you start vaccination obviously could be three months before or at a minimum one month before. How are vets thinking about that? I mean -- and how is Elanco? To the extent that you can comment on this, how is Elanco modeling sales peak around or with regards to this time restriction?

Question: Chris Schott - JPMorgan & Co. Inc. - Analyst : And appreciate all the details today. Just two questions for me. I guess, first, on this boxed warning, do you believe there's a path to get this removed from the label? Or is the approach here more better educating about the actual kind of impact to vaccinations and managing through this. I'm trying to sense of like, is this -- have you missed a temporary dynamic or just what we're going to be thinking about for Zenrelia throughout the life of the product. And then the second question is maybe just coming back to the more the chronic use of Zenrelia. I'm still just trying to kind of think about how you envision vets thinking about this withdrawal impact? It seems like on one hand, you've got a drug with deeper efficacy than Apoquel, and that's obviously going to appeal to some of vets and pet owners and I totally understand on the acute market. But think about chronic, it seems like it's going to be balanced against the dog needed to come off drug for a few months around the revaccination and symptoms returning. So I'm just I'm trying to get a sense of like is the chronic piece going to be a longer uptake? Or do you think you can also get quick uptick in that market as well? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 20, 2024 / 12:00PM, ELAN.N - Elanco Animal Health Inc to Discuss the Zenrelia Approval Call

Question: Navann Ty - Exane BNP Paribas SA - Analyst : My first question is -- so we know the focus on vet education, but can you discuss DTC and rebate strategy to attract new patients? And my second question, if you could help us sizing market expansion in terms of new patients, Apoquel nonresponders and independent clinics?

Question: Erin Wright - Morgan Stanley & Co. LLC - Analyst : So in terms of the adoption curve, how should we be thinking about sales of this product in 2025? And when does it reach blockbuster status? And what sort of market share do you think you can capture ultimately? And then nearer term, how do we see stocking dynamics, does that hit in the fourth quarter? And is that already embedded in guidance at this point?

Question: Erin Wright - Morgan Stanley & Co. LLC - Analyst : And then on the omnichannel approach for the product, I guess, that's a pretty big market in terms of the online channel for derm today. I guess, how are you thinking about approaching that and how the communication goes in terms of the safety dynamics and safety protocols around the vaccine timing.

Question: Chris LoBianco - TD Cowen - Analyst : This is Chris on for Steve. Congrats on the approval. We had two on Zenrelia clinical trial. Did you have any data on Zenrelia efficacy in dogs that were unresponsive or previously treated with Apoquel. And then on the head-to-head study, are you able to claim that the efficacy difference was statistically superior to Apoquel. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 20, 2024 / 12:00PM, ELAN.N - Elanco Animal Health Inc to Discuss the Zenrelia Approval Call