Elanco Animal Health’s methane-reducing feed additive for cattle could provide “blockbuster revenue potential” in excess of $200 million, according to Elanco President and CEO Jeff Simmons.

In comments during a Feb. 21 investor call, Simmons said the development team has been working with the Food and Drug Administration to receive approval to start selling Bovaer.

Royal DSM developed the product, and in April, Elanco received exclusive rights to manufacture and sell it in the U.S.

“Given these positive developments with the FDA and our parallel work to finalize contract manufacturing capacity, we anticipate a first half 2024 approval and launch,” Simmons told investors. “We look forward to integrating this product into our portfolio of strategic sustainability offerings for our beef and dairy customers.”

Elanco spokesperson Colleen Dekker said Elanco was the first animal health product to receive an environmental claim with its product Experior, which reduces ammonia emissions per pound of hot carcass weight. Elanco is committed to looking across its entire portfolio to identify other opportunities for carbon footprint reductions. She said Elanco already reduces the carbon footprint of beef production by 11%. “We have an aim to get that to 40-50% over time,” she told Agri-Pulse.

Simmons added the company’s excitement about Bovaer is enhanced by tangible progress on farmers’ ability to monetize environmental sustainability efforts. “In 2023, we expect the first carbon credits will be minted for beef producers, which will be proof that farm animal sustainability can transition from strategy to tangible action that can create value for farmers, investors and society as a whole,” he said.

Dekker said instead of farmers selling their credits as an offset for an unrelated industry, the goal is to keep it as an in-set within the food system. By in-setting the credits, Dekker explained protein producers could potentially keep not just the economic value, but also the societal value of reducing the footprint of the products they produce.

In the fourth quarter of 2022, Elanco reported its revenue was $988 million, a decrease of 11% on a reported basis compared with the fourth quarter of 2021. Farm animal revenue was $552 million. On a full year basis, Elanco's revenue was $4.418 billion, a decline of 3% year on year in constant currency. Farm animal revenue was $2.219 billion for the year, flat compared to 2021 in constant currency.

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