Elanco Announces Agreement to Acquire Lohmann Animal Health

GREENFIELD, IN, Feb. 27, 2014 /PRNewswire/ — Elanco, the animal health division
of Eli Lilly and Company (NYSE:LLY), today announced an agreement to acquire
Lohmann SE (Lohmann Animal Health), a privately-held company headquartered in
Cuxhaven, Germany. Lohmann Animal Health is a global leader in the supply of
poultry vaccines and also markets a range of feed additives. The acquisition
will establish Elanco as a global poultry leader, solidify Elanco’s vaccine
presence, broaden Elanco’s product offerings and significantly augment Elanco’s
vaccine manufacturing capabilities.

“Effectively competing in the animal vaccine segment is a cornerstone of
Elanco’s long-term strategy and is one more way we will expand the value we
create for customers,” said Jeff Simmons, senior vice president of Eli Lilly and
Company and president of Elanco Animal Health. “The addition of Lohmann Animal
Health provides a unique opportunity for Elanco to expand our presence in the
global poultry market and to enter the global poultry vaccine market with a
solid base, established products, and global commercial and manufacturing
capabilities.”

This acquisition complements Elanco’s mission to help the global food chain
deliver a safe, affordable, sufficient food supply. “We believe innovation in
food production is one of the most important ingredients to feeding a growing
global population,” Simmons said. “Elanco has continued to invest significantly
in animal health in the past few years, growing businesses and expanding our
pipeline. This acquisition will support further pipeline growth and build on
Elanco’s proven track record for successfully delivering new innovation and
integrating acquisitions. We will continue to seek opportunities that support
those efforts.”

“As the middle class grows in size and affluence throughout the world, the
demand for eggs and poultry is growing rapidly. However, egg layer productivity
is now shrinking after decades of increases,” said William (Bill) Weldon, vice
president of Elanco R&D. “Delivering innovation to this industry is critical.
Without it, we’re on pace to double the number of hens needed, plus the massive
resources to support them, in order to meet demand in 2050.”

Under the terms of the agreement, Lilly will acquire all assets of Lohmann SE
and its subsidiary, Lohmann Animal Health. These assets include a range of
vaccines and feed additives, commercial capabilities, and manufacturing sites in
Cuxhaven, Germany and Winslow, Maine. No other terms of the transaction were
disclosed.

The transaction is expected to close in the second quarter of 2014, contingent
upon clearance from regulatory authorities and other customary closing
conditions. As a result of business combination accounting adjustments and
transaction costs associated with this acquisition, Lilly has lowered its
full-year 2014 earnings per share guidance to be in the range of $2.72 to $2.80
on both a reported and non-GAAP basis. Updates, if any, to specific line item
guidance will be provided on the company’s first-quarter 2014 earnings call on
April 24, 2014.

About Lohmann Animal Health
Lohmann is a leading manufacturer of feed additives and poultry vaccines,
selling its products in over 80 countries around the world. Headquartered in
Cuxhaven, Germany, Lohmann has a production facility there, a vaccine plant in
Winslow, Maine, and is represented by 18 subsidiaries in Europe, Asia and North
America. The focus of Lohmann is the development of vaccines and food components
that help prevent diseases of animals used in food production.

About Elanco
Elanco is a global, innovation-driven company that develops and markets products
and services to improve animal health and protein production in more than 75
countries. Elanco employs more than 3,000 people worldwide, with offices in more
than 40 countries, and is a division of Eli Lilly and Company, a leading global
pharmaceutical corporation. Additional information about Elanco is available at
www.elanco.com.

About Eli Lilly and Company
Lilly is a global healthcare leader that unites caring with discovery to make
life better for people around the world. We were founded more than a century ago
by a man committed to creating high-quality medicines that meet real needs, and
today we remain true to that mission in all our work. Across the globe, Lilly
employees work to discover and bring life-changing medicines to those who need
them, improve the understanding and management of disease, and give back to
communities through philanthropy and volunteerism. To learn more about Lilly,
please visit us at www.lilly.com and http://newsroom.lilly.com/social-channels.
C-LLY

This press release contains forward-looking statements about the benefits of the
acquisition of Lohmann SE by Lilly, and the potential of the combined
businesses, including Lohmann’s vaccine products. This release reflects Lilly’s
current beliefs, assuming that the transaction is successfully closed; however,
as with any such undertaking, there are substantial risks and uncertainties in
the process of implementing the transaction and in the commercialization of
these products. There is no guarantee Lilly will realize the expected benefits
of the transaction, that the commercial assets acquired will continue to be
commercially successful, or that any acquired pipeline assets will yield
commercially successful products. For further discussion of these and other
risks and uncertainties, please see Lilly’s latest Forms 10-K and 10-Q filed
with the U.S. Securities and Exchange Commission. The company undertakes no duty
to update forward-looking statements.

Refer to: (317) 276-4076 –
Colleen Parr
Dekker (Elanco)

(317) 276-5795 –
Mark E. Taylor
(Lilly)

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Logo: http://photos.prnewswire.com/prnh/20031219/LLYLOGO

SOURCE Eli Lilly and Company

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