Jeff Simmons: Yes, thank you Brandon. Relative to Quattro, that is correct – we’ve said early on that we have passed the heartworm threshold, so to have heartworm control at a high parameter that the CVM has, and yes, we’re making an assumption on the one-month control from the data package that we’ve submitted, as well as the dialogue that we’ve had with the CVM. Thank you.
Katy Grissom: Thanks. We’ll take the next caller.
Operator: Thank you. Our next question comes from the line of Nathan Rich of Goldman Sachs. Please go ahead.
Nathan Rich: Hi, good morning, and thanks for the questions. I had a few on the derm products, and I’ll ask them upfront. On the international approvals for Zenrelia, it seems like the timing maybe shifted a little bit earlier than what you anticipated. I guess, any details on what changed there, and are there certain markets where approval is expected before year end? Then also on the IL31 monoclonal antibody, I know the timing was unchanged on the slide, but I think the submission was made maybe a quarter after Zenrelia. Is there any difference in sort of the timeline of review by the USDA versus the FDA that we should keep in mind in terms of when in 2025 we might see that product approved?
Jeff Simmons: Yes, thank you, Nate, for the question. Relative to–let me just hit the IL31 first. We just confirmed that this product is expected in 2025, and that’s all we’ve noted. We’ve made nice progress since, and we’re just highlighting that that’s going to be part of the $600 million to $700 million and a key contribution to our derm portfolio. Internationally for Zenrelia, this is something that we’ve been working hard on relative to–you know, as Bayer came in, it built greater presence, more pet presence, more regulatory as well presence, and all of that just to increase the capability of regulatory submissions quicker, and then Ellen’s team has worked hard in terms of globalizing those packages and then customizing them into key countries, and then we’ve added Tim Bennington on the marketing side, really being able to target which markets matter, especially earlier.
All of those things have come together to really accelerate. We haven’t noted specifically, but you can imagine these are the big pet markets. The submissions have been made, and from the dialogues with the regulatory authorities, we’re confident that we’re going to see this product come into international markets in Q4, all really as an outcome from the capabilities that we’ve built over the last two years on global regulatory.
Katy Grissom: Thanks. We’ll take the next caller.
Operator: Thank you. Our next question comes from the line of David Westenberg of Piper Sandler. Please go ahead.
David Westenberg: Hi, thanks for taking the question, and congrats on the quarter. Just a couple on the innovations front. First on the Quattro product, can you talk about a little bit on the white space for the product specifically, and then maybe just kind of talk about the category growth. Mainly I’m just kind of thinking, you know, as we see Quattro play out, the differentiation on the tapeworm, broader coverage, are we seeing this as taking share from other broad spectrum parasiticides? Are we seeing this growing from the old generation oral parasiticides or do you just see this as more of taking market growth from maybe topicals, OTC, that kind of product? Then just secondly on the injectable or monoclonal derm, these products had been in the pipeline of Kindred, it was not you, you guys only inherited that later.
Is there something that you had to fix? Is there other kind of products–I know they had an IL4 that could be coming in maybe 2026, 2027? Maybe you’re not ready to talk about pipeline, but I’d be curious because I do think those injectable derms have incredibly good market potential. Thank you.
Jeff Simmons: Yes, thank you for the questions, great questions. Let me just start with that derm product. Yes, there was lots of work to do relative to the technologies inside of Kindred Bio. We’re very happy with that acquisition and the manufacturing plant that’s come with it, that’s now making parvo and will make the other monoclonal antibodies as well. We continue to progress the pipeline. We’ve not noted a lot of details relative to that, but as we’ve highlighted, we do have a long acting and we do have the next generation of derm products that follow behind that, and Kindred’s portfolio will play into that. But there was continued work to do, and as we’ve noted, the USDA had asked us to increase the number of dogs and the number of treatments, and so that actually is what extended the timeline.
It wasn’t product specific, it was really requirement specific. Relative to the parasiticide market, it’s a great question. Look, this is the largest market in animal health and a couple principles play out very consistently as it’s seen the most innovation come in. First is innovation usually increases the size of the market – we’ve seen that over the last couple innovations that have come in recently. We believe our innovation will do the same. The second is you see legacy innovation get impacted the soonest and the most rapidly, and we’ve seen that in our own portfolio and others have as well. We see that as important. The third one is the oral broader spectrum is growing the fastest, so when you combine these three things together, we believe Quattro, having the broadest coverage, being differentiated, combined with our omnichannel approach inside the clinic and being able to drop ship it to homes, and to have this four pillar approach with Zenrelia, it puts Quattro in a very strong position.
Why wouldn’t you want the broadest coverage if it’s available, and we believe that we have that, and we have Credelio brand awareness that continues to climb across the marketplace. These are all factors that we play as we bring the broadest coverage product into the largest animal health market here over the second half of this year, and we’re excited to do that.
Katy Grissom: All right, thanks. We’ll take the next one.
Operator: Thank you. Our next question comes from the line of Steven Scala from TD Cowen. Please go ahead.
Chris: Hi, this is Chris on for Steve Scala. We just had one question on the technical approval aspect. What level of risk is associated with FDA administrative review once technical approval is granted? Can you undertake any margin promotional activities once technical approval is granted, and finally, will you disclose once those technical approvals are granted, hopefully in June? Thank you.
Jeff Simmons: Yes, we will wait, of course, for final approval, and final approval is when everything will be public on label, and so there is nothing that will come between the technical sections being approved and the final approval that is after that 60-day administrative side. Then relative to informing, if and when we have material news on any of these products, we will share promptly and appropriately. Thank you.
Operator: Thank you. Our next question comes from the line of Neven Tai of BNP Paribas. Please go ahead.
Neven Tai: Hi, good morning. I have two questions, please, the first one on innovation. From your early discussions of the sales force with vets to discuss coming innovations, do you expect incrementally stronger pricing power with the higher relevance of Elanco’s portfolio? Then I have a separate question on activist investors, if you could discuss your dialogue and interactions with Ancora to date and since the appointment of Turner and Wallace to the board since late March. Thank you.
Jeff Simmons: Thank you for the questions. As we’ve said with launching, we will look at this holistically. We will take of course–we know that the market rewards innovation on the pet side especially, and we will take a value-based approach, a holistic approach, looking at not only the product and the differentiation of the new innovation, but also the portfolio. We will–as Todd mentioned earlier, we will also look at this from the standpoint of offering now all four pillars of the portfolio into certain clinics. We will look at potentially volume opportunities, but we’ll take a value-based approach on the pricing side of the products. Relative to investors and the investor that you mentioned, our focus here is that we’ve come to an agreement that we’ve publicly communicated, and that was all around the principle of keeping the energy inside the company with a concentrated focus to execute against this value agenda that’s in front of us, and that was the rationale behind the decision.
We’re happy to continue to be executing as we go into the rest of 2024.
Katy Grissom: Thanks. We’ll take the last caller.
Operator: Thank you. Our last question for the day comes from Balaji Prasad of Barclays. Please go ahead.
Balaji Prasad: Hi, good morning, and thank you for having me back again. A couple from me, firstly on the significance of technical approval and an administrative review. Is this call for any of the technical approvals to be rescinded during this administrative review period, and can you clarify what in fact happens here – one? Two, on the parasiticide side, obviously you will have seen your competitor post a very strong number on Simparica Trio. I’m trying to gauge what part of the business from the market expansion or market dislocation, and what you have seen within the parasiticide market. Kind of linked to this, is there any incremental color on the label expectations from your discussions with FDA? Thank you.
