So that’s one part of the EBITDA bridge for the second quarter. The other element is about $20 million relates to slowing down our manufacturing plants. Q2 was a really good quarter across the board, except for one thing, and that was increasing inventory, more than we expected on our own balance sheet. A lot of that relates to API purchases for products especially on the Farm Animal business that we have to make decisions on kind of 18 to 24 months in advance given the disruption to the supply chain from COVID. So, a lot of that product is still coming in the door, but we’re addressing it. We’re slowing down plant output. That’s putting pressure on gross margin as well to about $20 million. And then there’s some other timing elements and mix shifts that are always going on in our business that are also impacting that bridge.
But net-net, strong quarter, really strong quarter by U.S. OTC business. And as a reminder, the seasonality of our business makes that predominantly a first half business, and so that also affects where our beat could come from. So again, very pleased with the execution by the team across the year, which is allowing us to raise full year guidance on sales, adjusted EBITDA and adjusted EPS.
Katy Grissom: Thanks, Mike. We’ll take the next caller.
Operator: Your next question comes from the line of Chris Schott from JPMorgan. Your line is open.
Chris Schott: Great. Thanks so much for the questions and color on the pipeline updates here. I guess the first question for me is maybe just extending that discussion on SG&A and not looking for formal guidance here, but just as we think about next year, how much incremental investment do we need to think about now that you have additional clarity on some of these assets and the profiles in the market? I guess on one hand, it’s, I guess, the balance between investing properly behind these and then similarly kind of managing kind of earnings progression. Could you just help a little bit about how do we think about those? And then the second question I had was just on the pipeline. I think you talked about Credelio Quattro and the profile of there. Is there anything you can provide on the JAK inhibitor? I see in the slides that mentions differentiation, but just any color on what that profile could look like and how that fits in the market? Thanks so much.
Todd Young: Sure, Chris. With respect to next year’s investments, certainly, we’re starting to ramp that up this year as we expand the sales force and add to the marketing. Overall, we’re continuing to make sure that we launch these products really well. They will be the growth driver for Elanco in the years to come. And so, we’re going to make sure to not short those. We’ve got a broad business. We’ve got a lot of things in motion. As we’ve talked the ERP completion does provide incremental synergies next year across our portfolio that we continue to capture in about $20 million range, in addition then to investments we’ll need to make for these products to launch them well. So not giving guidance today, but certainly understand the importance of driving a launch as these products come to market. And then, Jeff, on the…
Jeff Simmons: Yes, Chris, thank you for the question. I’d just say and emphasize, I think Ellen and her team this quarter represents just the level of discipline, I think the level of quality, the quality of the submissions, the engagement with the regulatory bodies. And I would say the engagement, the capacity has probably never been higher any time I’ve seen in the Elanco R&D. As you look specifically to JAK, again, going into this $1 billion plus term market, we’ve not put any more light on the differentiation. As I’ve said in the past, safety, efficacy, convenience will be important. I think the noted significant differentiation we see on the para side having this differentiated coverage it really allows us, as we start to think about approaching vet clinics, being able to have a very broad pain portfolio, a differentiated para and very broad para and now coming with this JAK, that will be another factor to Todd’s point, on our level of confidence, the increasing of that confidence in the last quarter, the level of differentiation, candidly, the level of current innovation with even parvo has led us to say we’re going to lean in and make some of these investments.
