Monsanto sells animal pharmaceutical brand for $300 million
SAINT LOUIS, MO – St. Louis based Monsanto Company announced today that it will sell it's Posilac brand to Elanco, a division of the Eli Lilly company in Indiana.
Posilac is an FDA approved animal pharmaceutical used by US dairy farmers to increase productivity.
Since 1994, Posilac has become one of the countries leading dairy supplements. According to Monsanto, cows supplemented with Posilac produce an average of ten pounds more milk a day.
The product has been controversial since its inception, with some scientists concerned about potential human and animal health risks associated with the animal hormone.
Monsanto spokeswoman Danielle Jany says the company is selling the brand so they can better focus on corn, soybeans, cotton and vegetables.
"Posilac has been a very strong and successful product, and it is a very valuable product to dairy producers across the country," said Jany. "This is just a matter of focusing on our core seeds and traits business."
Pat Westhoff, co-director of the Food and Agricultural Policy Research Institute at the University of Missouri says Monsanto may see more profit by focusing on crops rather than dairy.
"I can't pretend to know what their reasons were for the sale," said Westhoff who is also co-director of the Food and Agricultural Policy Research Institute at the University of Missouri. "I do know that on the crops side of the ledger, obviously, with the rising prices we've seen for grains and oil seeds, there's a lot of incentive to put as much money as possible into developing new seed facilities for corn and soybean producers."
As part of the agreement, Eli Lilly will acquire all rights to the Posilac brand, the products US sales force and its manufacturing facility in Georgia. Monsanto will receive a $300 million payment upfront, as well as contingent consideration.
The majority of Monsanto employees that work in the Posilac business are located at the Augusta, Georgia manufacturing facility. The company expects Eli Lilly to offers jobs to most employees.