- During a press conference on Tuesday, an analyst asked Jeffrey Simmons, who heads up the animal health division at Lilly, Elanco, if a spinoff of that division is a possibility.
- His response was that there are regular discussions about spining off Elanco, but there is an upside and a downside to spinning off this unit.
- In the biggest leap since March 2009, Eli Lilly's stock was up 5.4% yesterday to $82.77 on an anticipated spinoff.
Lilly has been battling back from a low point in sales in 2014, when two of its top earners, Cymbalta (duloxetine) and Zyprexa (olanzpine) lost patent protection. In 2014, 86% of the company's sales were for pharmaceutical products aimed at humans.
The excitement around a possible spin-off of Elanco is driven by the example that Pfizer set in 2013, when it spun off its animal health unit, Zoetis, in an initial public offering (IPO). Since the IPO, Zoetis shares are up 89%. If Elanco is spun off, it is not clear that Lilly will take the IPO route, according to Simmons—but it is a possibility.