- The strategic alliance connects two sustainability leaders,
Elanco, a leading animal health company, and Royal DSM, a health,
nutrition and biosciences company, to accelerate tangible
sustainable solutions in the U.S., supporting the Global Methane
Pledge goal of cutting emissions 30% by 2030.
- Elanco gains exclusive licensing rights to develop,
manufacture, and commercialize Bovaer® in U.S.
- Royal DSM will receive royalty income from Elanco's U.S.
Bovaer® sales, including a single-digit millions upfront payment,
as well a portion of product supply from Elanco.
- Bovaer® is expected to have blockbuster revenue potential for
Elanco in the U.S. market in excess of US$200 million., in the estimated $1-2 billion global market for methane reduction
from cows.
- This alliance will nearly double the announced global supply
potential of Bovaer®, giving more farmers the opportunity to reduce
methane emissions, creating value and positive environmental
impact, contributing to health for the planet.
GREENFIELD, Ind. and HEERLEN,
Netherlands, April 27, 2022 /PRNewswire/ -- Elanco Animal
Health Incorporated (ELAN: NYSE) and Royal DSM have created a
strategic alliance connecting two leading, sustainability-focused
companies to address one of society's most significant
opportunities of the decade, mitigating climate change by reducing
greenhouse gas emissions from farming. Elanco has secured the
exclusive U.S. licensing rights to develop, manufacture and
commercialize Bovaer® for beef and dairy cattle.
Bovaer® is a first-in-class and best-in-class methane-reducing
innovative feed additive for beef and dairy cattle, already
available in Europe, Brazil, Chile
and Australia. More than 50
peer-reviewed studies and 48 on-farm trials in 14 countries show
Bovaer® consistently reduces enteric methane emissions by
approximately 30% for dairy cows and even higher percentages for
beef cattle.
DSM and Elanco intend to provide farmers, dairy and beef
companies, and retailers with a solution to substantially lower the
carbon footprint of beef and dairy production, supporting the
animal protein industry's ESG efforts and helping secure a
sustainable future for the planet. The methane reduction from
feeding a million cows Bovaer® is equivalent to planting 45 million
trees or removing 300,000 cars from the road. With 9 million dairy
cows and 14 million beef cattle on feed in the U.S. alone, the
product would contribute to a significant and immediate reduction
of the environmental footprint of meat and dairy products,
supporting the Global Methane Pledge to cut emissions 30% by
2030.
The strategic alliance is expected to enable both parties to
maximize the opportunity for the product in the U.S. market, once
approved, while also nearly doubling previously announced Bovaer®
production capacity globally. Elanco will be responsible for the
U.S. approval process, commercialization strategy and product
supply, supporting DSM supply in markets outside the U.S. Elanco
will assess and evaluate the regulatory submission and
manufacturing options with the intent to bring Bovaer® to the U.S.
market as quickly as possible. Already the State of Indiana, for example, has indicated
its support for expanded manufacturing investment in the state as
it continues to build public-private partnerships supporting the
state's growing agriculture economy.
"We are excited to partner with DSM to start the process of
bringing this game-changing innovation to U.S. livestock
producers," said Jeff Simmons,
president and CEO of Elanco. "It will further strengthen Elanco's
efforts to create the livestock sustainability market and the next
era of value for farmers by adding to our efforts to reduce,
measure and monetize emission reductions, including Experior™,
Uplook™ and Athian. We are eager to work with regulators to bring a
unique innovation like DSM's Bovaer® to the U.S. market as quickly
as possible to support farmers and positively impact the climate
crisis."
Geraldine Matchett and
Dimitri de Vreeze, Co-CEOs of Royal
DSM, commented: "This agreement marks an important milestone for
DSM, Elanco, and the climate change mitigation efforts of the U.S.
We believe Elanco, as a company that shares our determination to
revolutionize the sustainability of the cattle industry, is the
ideal partner to help us increase and accelerate the total impact
of our game-changing feed additive by bringing us closer to
customers across the U.S. This alliance will help us realize
Bovaer®'s potential as a powerful solution with a significantly
positive impact on the planet. In addition, and fully aligned with
our purpose-led performance-driven strategy, the alliance enables
us as DSM to monetize our long-term innovation faster."
With an estimated global market opportunity for livestock
methane reduction of $1 billion to
$2 billion, Elanco expects Bovaer® to
have blockbuster annual revenue potential in excess of US$200 million in the U.S. market with initial
contribution by mid-decade. This alliance is not expected to impact
Elanco's previously stated financial commitments.
About Elanco
Elanco Animal Health Incorporated (NYSE: ELAN) is a global leader
in animal health dedicated to innovating and delivering products
and services to prevent and treat disease in farm animals and pets,
creating value for farmers, pet owners, veterinarians,
stakeholders, and society as a whole. With nearly 70 years of
animal health heritage, we are committed to helping our customers
improve the health of animals in their care, while also making a
meaningful impact on our local and global communities. At Elanco,
we are driven by our vision of Food and Companionship Enriching
Life and our Elanco Healthy Purpose™ Sustainability/ESG Pledges –
all to advance the health of animals, people, and the planet. Learn
more at www.elanco.com.
About Royal DSM
Royal DSM is a global, purpose-led company in Health, Nutrition
& Bioscience, applying science to improve the health of people,
animals and the planet. DSM's purpose is to create brighter lives
for all. DSM's products and solutions address some of the world's
biggest challenges while simultaneously creating economic,
environmental and societal value for all its stakeholders –
customers, employees, shareholders, and society at large. The
company was founded in 1902 and is listed on Euronext Amsterdam.
More information can be found at www.dsm.com.
DSM has launched a series of quantifiable commitments aimed at
addressing urgent societal and environmental challenges linked to
how the world produces and consumes food. DSM's Food System
Commitments including a double-digit reduction of on-farm livestock
emissions by 2030. The market introduction of Bovaer® is a major
step toward delivering on this commitment as well as the strategic
initiative of DSM's Animal Nutrition & Health business group,
We Make It Possible, with its mission to lead a robust and
achievable worldwide transformation in sustainable animal protein
production. Learn more at www.dsm.com.
Forward-looking statements
This press release may contain forward-looking statements with
respect to DSM's future (financial) performance and position. Such
statements are based on current expectations, estimates and
projections of DSM and information currently available to the
company. DSM cautions readers that such statements involve certain
risks and uncertainties that are difficult to predict and therefore
it should be understood that many factors can cause actual
performance and position to differ materially from these
statements. DSM has no obligation to update the statements
contained in this press release, unless required by law. The
English language version of the press release is leading.
For more information
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