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Shares of Elanco Animal Health (NYSE:ELAN) surged ~25% to reach the highest level since August 2022 after the animal care company reported better than expected Q1 2024 financials with an updated timeline for several product launches.
While its Q1 revenue exceeded forecasts to reach $1.2B, it indicated a ~4% Y/Y contraction from a year ago quarter when ~$90M-$110M worth of customer purchases of legacy Bayer Animal Health products were shifted from Q2 2023 as a result of a newly-established ERP system.
Elanco (ELAN) acquired the Animal Health unit of German conglomerate Bayer (OTCPK:BAYZF) (OTCPK:BAYRY) in 2020 following a $7.6B cash-and-stock transaction.
“We delivered estimated revenue growth of 3% to 5% in the first quarter, excluding the impact of the ERP blackout from last year, and exceeded the top end of our guidance range for revenue, adjusted EBITDA, and adjusted EPS in the quarter,” CEO Jeff Simmons remarked.
The company updated its full-year revenue guidance to $4,460M–$4,515M in line with the consensus, including revenue contributions from new products Credelio Quattro, Zenrelia, and Bovaer in H2.
Credelio Quattro, a broad-spectrum oral parasiticide, and JAK inhibitor Zenrelia are expected to receive FDA approvals in Q3, Elanco (ELAN) said, adding that the review of cattle feed ingredient Bovaer is expected to be complete this month.
“This likely means some revenue in Q4, which is upside to guidance,” Piper Sandler analyst David Westenberg, who has a Neutral rating and an $18 target on ELAN, wrote in reaction.
Elanco’s (ELAN) February guidance of $4,450M–4,540M in revenue didn’t consider the contributions from the expected launches of all three new products this year.
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