Elanco Animal Health Incorporated announced on May 5, 2025, the sale of certain future tiered royalties and commercial milestones associated with XDEMVY (lotilaner ophthalmic solution) 0.25% for human health applications to funds affiliated with Blackstone Life Sciences and Blackstone Credit & Insurance for $295 million in cash.
The proceeds from this monetization of a non-core asset will be used to accelerate debt reduction, positioning Elanco to achieve an expected net leverage ratio of 3.9x to 4.3x adjusted EBITDA by the end of 2025. This transaction is expected to reduce interest expense by approximately $10 million.
Elanco retains the rights to all royalty payments on net sales outside the U.S. as well as any future human applications of lotilaner beyond ophthalmic solutions. This strategic move enhances Elanco's financial profile and supports its deleveraging goals, demonstrating a disciplined approach to capital management.
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