The two companies announced the deal March 2.

Zoetis will pay $160 million, subject to customary closing adjustments. Neogen had previously announced it planned to divest of this side of its business.

Zoetis said in a news release the acquisition “aligns directly with Zoetis’ strategy to drive future livestock innovation through genomics.”

Neogen serves customers in about 120 countries from five laboratories in the United States, Brazil, Australia, China and the United Kingdom. It also has an office in Canada.

The news release said it is a leader in U.S. beef and dairy genomics and uses cutting-edge technology for highly accurate scalable genetic testing.

WHY IT MATTERS: Genomics has transformed breeding, particularly in the dairy sector, by accelerating genetic gains through trait selection.

Neogen intends to use the sale proceeds for debt reduction and said the genomics business generated about $90 million in sales in fiscal 2025.

“This transaction is part of the company’s strategic portfolio review and allows the company to accelerate de-leveraging and improve profitability going forward,” said chief executive officer Mike Nassif.

“Furthermore, this deal allows us to focus in areas where the company has the most significant competitive advantage and further leverage our core capabilities in food and animal safety. We are committed to a smooth transition for customers, employees and other stakeholders, and believe the business is well positioned to thrive under Zoetis’ ownership.”

Zoetis chief commercial officer Jamie Brannan said the acquisition allows the company to expand its Precision Animal Health business and adds “complementary capabilities that expand predictive insights and individualized care.”

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The trials, conducted by the U.S. Department of Agriculture’s (USDA) Agricultural Research Service, are the first step in a lengthy process toward the possible first use of vaccines to protect U.S. poultry from the lethal virus.

Bird flu, also known as highly pathogenic avian influenza (HPAI), has killed hundreds of millions of birds around the world, raising interest in vaccines. The virus is largely spread by wild birds that transmit it to poultry.

USDA is testing one vaccine from Zoetis, one from Merck Animal Health and two developed by the department’s Agricultural Research Service (ARS).

Zoetis said it previously supplied its vaccine to a USDA stockpile in 2016, following a massive 2015 outbreak, but it was never used.

Initial data from a study using a single dose of a vaccine are expected in May, while results from studies on two-dose vaccine regimens are expected in June, USDA said.

If the trials are successful and USDA decides to continue development, it would take at least 18-24 months for a vaccine that matches the current virus to be commercially available, the agency said.

The government needs to ensure vaccinations would not disrupt trading with major buyers, said Greg Tyler, president of the industry group USA Poultry + Egg Export Council.

Governments have previously focused on culling infected flocks to control the virus due to concerns importers would block shipments of vaccinated poultry to avoid the risk of infections.

USDA said on Friday its “current strategy of stamping out and eradicating HPAI… continues to be the most effective strategy because it works.”

Outbreaks in U.S. commercial and backyard poultry flocks have led to the deaths or culls of an estimated 58.65 million birds across 47 states since the high-path virus’ current run through the U.S. began in early 2022.

In Canada, as of Tuesday, an estimated 7.3 million commercial and backyard birds have been similarly impacted by the virus since late 2021.

France said last week it was launching an order for 80 million doses of vaccines to use in ducks in the autumn if final trial results are positive, the first EU member to start such a plan.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago. Includes files from Glacier FarmMedia Network staff.

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New Jersey-based Zoetis, which makes drugs and vaccines for the beef and dairy cattle, equine, swine, poultry and sheep sectors as well as cats and dogs, announced Wednesday it has bought Ames, Iowa-based Performance Livestock Analytics for an undisclosed sum.

The addition is expected to help Zoetis “to accelerate progress in precision livestock farming and improve sustainability of producers’ operations,” the company said.

Performance Livestock Analytics offers Performance Beef, a cloud-based, automated on-farm data collection and analytics system for feedlot managers, and Cattle Krush, billed as a “complementary” cattle market analytics tool to Performance Beef.

Performance Beef “makes it easy to change rations; create accurate invoices and closeout reports; and analyze trends in feed efficiencies, costs and performance,” Zoetis said. “New animal health inputs can automatically be captured at the chute, providing insights into individual animal performance and health protocol compliance.”

“Real-time, accurate data allows producers to make better management decisions to help boost efficiency and profitability,” Performance Livestock Analytics CEO Dane Kuper said in Zoetis’ release.

“Now as part of Zoetis, we will be better positioned to provide practical technology solutions to improve livestock health and sustainability for our customers.”

Performance Livestock Analytics expanded its reach in Canada last October in a partnership deal with Trouw Nutrition Canada — the livestock feed firm formed in the merger of the Canadian feed businesses of Nutreco, Shur-Gain, Landmark Feeds and Hi-Pro Feeds.

The Performance Beef system “provides a more accurate view” of producers’ operation, both for themselves and their Trouw rep, “from anywhere at any time,” Performance Livestock Analytics said at the time, billing Trouw as a “premier partner” for the Performance Beef platform in Western Canada.

“Digital platforms and technology can help integrate information that a producer has available from multiple sources and turn that information into useful insights that inform health and management decisions,” Zoetis said Wednesday.

“On-farm data also may be meaningful if shared throughout the supply chain in response to consumers’ growing interest in how food-producing animals are raised.”

“The team at Performance Livestock Analytics has successfully applied Silicon Valley technology learnings to the needs of livestock producers, and we are thrilled to have them join us at Zoetis to continue leading the way in digital and data analytics for livestock,” Zoetis executive vice-president Mike McFarland said in the same release. — Glacier FarmMedia Network

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Elanco’s shares opened at $32.25 on the New York Stock Exchange, higher than their IPO price of $24 per share, giving the company a market value of $11.49 billion (all figures US$). As of 11:41 a.m. CT, the shares hit a high of $33.85.

The company raised $1.51 billion from the offering, which it expects to largely pass on to Eli Lilly and Co.

The U.S. drugmaker is expected to own about 82.3 per cent of Elanco after the IPO, which was announced in July following a nine-month review of Lilly’s businesses which include diabetes and lung cancer drugs.

“We looked at the after-tax value to Lilly’s shareholders during the separation, and that was an important metric during the discussions,” Elanco CEO Jeff Simmons told Reuters.

Simmons emphasized Elanco’s focus would be its core animal health business. “We do not see the need for (mergers and acquisitions) to execute growth plans.”

Elanco has been spending eight per cent of sales on research and development, Simmons told CNBC earlier in the day.

The company sells medicines for both pets and livestock, and its Rumensin cattle feed additive accounts for 10 per cent of its annual sales of about $3 billion.

Elanco sold 62.9 million shares as part of its IPO, and had targeted an offering price between $20 and $23 per share.

Rising demand for its pet healthcare products has driven much of the company’s business in recent years, propelling Elanco to No. 4 globally in the list of animal healthcare groups by revenue.

The pet medicine and vaccine market is largely dominated by Pfizer’s animal health unit Zoetis, which raised $2.2 billion in a 2013 IPO.

Zoetis’ shares have nearly tripled since then and many analysts expect Elanco will replicate that success in an industry projected to grow at five per cent from 2017 to 2023, according to data firm Vetnosis.

Elanco’s listing should deliver more value to Lilly shareholders and help the company as it sharpens focus on cancer treatments and looks beyond the recent failure in trials of its experimental Alzheimer’s drug.

— Reporting for Reuters by Aparajita Saxena in Bangalore.

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The IPO of 62.9 million shares is expected to be priced between $20-$23 per unit, with the company having a valuation of about $8 billion at the high end of the range (all figures US$).

The animal health industry has become attractive for investors with revenue projected to expand at a five per cent rate until 2023, according to data firm Vetnosis.

“Farmers, ranchers and the animal business is not highly cyclical and so Elanco has a very high market share,” Jay Ritter, an IPO expert and professor at the University of Florida.

“The relatively high price earnings ratio that this sector has reflects the low volatility of their future income and cash flow,” Ritter, who owns stock in Zoetis and Lilly added.

“It is a relatively safe sector for investor.”

Zoetis Inc., the largest animal health company, has nearly tripled in value since Pfizer listed it about five years ago.

Zoetis’ IPO raised $2.2 billion and the company currently has a market capitalization of $43 billion.

BMO Market analyst said Elanco’s valuation range was significantly below the brokerage’s $12 billion to $13 billion expectation, but added that given Zoetis’ performance, it expects strong demand for the IPO.

Greenfield, Indiana-based Elanco, which offers more than 125 products to veterinarians and food animal producers in more than 90 countries, is the fourth-largest in the animal health industry globally.

It earned $9.9 million and brought in revenue of $1.5 billion for the six months ended June 30.

Lily said in July it would take Elanco public, marking the end of a nine-month review that weighed options for the unit. The drugmaker will hold about 82.3 per cent of Elanco after the IPO, the company’s regulatory filing showed.

— Reporting for Reuters by Ankur Banerjee in Bangalore.

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Financial details were not disclosed.

The deal, which is expected to close by year-end, follows rival Zoetis’ agreement, announced on Nov. 2, to buy Pharmaq, a market leader in vaccines for farmed fish, for US$765 million.

Harrisvaccines, based in Ames, Iowa, is best known for developing a vaccine called “iPED” in 2013 to fight porcine epidemic diarrhea virus (PEDv).

It was one of the first U.S. companies to develop a vaccine to fight the disease, which wiped out an estimated 10 per cent of the U.S. pig population over two years. It also received the first conditional license from the U.S. Department of Agriculture (USDA) to sell its vaccine to veterinarians and swine farmers.

Merck Animal Health’s project to develop a PEDv vaccine is ongoing, the company said on Thursday.

Zoetis also has been granted a conditional license from the USDA to sell its PEDv vaccine.

In October, Harrisvaccines was one of two drug firms to be awarded a USDA contract to manufacture doses of avian influenza vaccine for poultry, in preparation for the potential return of the fast-spreading virus later this year.

— P.J. Huffstutter reports on agriculture and ag markets for Reuters from Chicago.

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Within two months, scientists at a U.S. Department of Agriculture (USDA) research lab in Georgia will test the vaccine on chickens to see how well it prevents them from getting sick and dying of the virus, which the government says is spread by wild birds.

Progress toward creating a vaccine has not previously been reported. It comes after the H5N8 and H5N2 flu strains have infected commercial poultry operations and backyard flocks in eight states since December.

In response to the cases, key overseas buyers have limited imports of U.S. poultry, and the world’s biggest poultry producers, including Tyson Foods and Sanderson Farms, have increased biosecurity at farms.

The government has no plans to distribute the vaccine yet, officials said on Monday. Instead, the U.S. will continue to cull infected flocks and test nearby birds to prevent transmission.

The U.S. is developing the vaccine in case it needs a countermeasure to the containment strategy, said T.J. Myers, associate deputy director of surveillance, preparedness and response services for USDA’s Animal and Plant Health Inspection Service (APHIS). The agency will ultimately decide whether to release the vaccine.

The new strains have been found in wild birds that can carry the virus so “there’s really no way to predict where the next case might be,” Myers said. Vaccinating all poultry nationwide is not considered practical or necessary, he added.

Use of a vaccine may be considered if avian flu “gets to the point where we cannot contain it,” said Mark Jackwood, head of the University of Georgia’s Department of Population Health.

Zoetis, the world’s largest animal-health company, said it was in contact with USDA about the flu infections. The company has a vaccine approved for use in countries outside the U.S.

The U.S. Southeast Poultry Research Laboratory, which is working on the new vaccine, tested the effectiveness of an existing vaccine on the new strains. It did not perform as well as scientists wanted, director David Swayne said.

Separately, the U.S. Centers for Disease Control and Prevention is preparing to respond if birds transmit the flu to humans, said Michael Jhung, a medical officer for the influenza division. The risk for human infection is considered low.

— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago.

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