A Dundee animal vaccines factory which employs around 100 staff is in new hands after the conclusion of a multi-billion pound international pharmaceuticals deal.
Swiss-based Novartis said it had completed the sale of its animal health division to US-based Prozac maker Eli Lilly for approximately £3.5 billion.
The divestment – which is part of a complex series of transactions – was first announced in the Spring of last year but finally went through on January 1.
The deal includes Novartis’s Dundee factory at Kinnoull Road on Dunsinane Industrial Estate.
It is being subsumed into Lilly’s Elanco division, which develops and markets products designed to improve animal health and protein production.
The Elanco operation – which has a workforce of more than 2,500 staff operating out of 40 countries worldwide – dates back to 1953 when it introduced its first veterinary antibiotic and it has since brought dozens of leading agricultural and animal health products to market.
In an announcement to the New York Stock Exchange yesterday, Indianapolis-based Lilly said the deal “further” positioned Elanco as a global leader in the animal health market.
The firm – which runs its UK operations from a base at Basingstoke – said the deal had received anti-trust clearance in the US and, as part of the approvals process, it had agreed to sell its Sentinel dog parasite franchise to Virbac.
After the deal was first made public in April last year, Lilly said an integration team would visit the Dundee factory as part of a wider assement of the “needs and capabilities” of the combined company.
There was no guarantee given at that time that jobs at Dundee would be preserved once the integration process was completed. The Courier again sought assurances over jobs yesterday but no specific answer to our inquiry was forthcoming.
“Elanco will now start operating as a new single company following local integration processes while staying committed to deliver innovative solutions to customers. Dundee will continue to manufacture veterinary products, along with 16 manufacturing plants Elanco has globally,” Lilly said in a statement to The Courier last night.
The company has previously said it expects to make cost savings of approximately $200 million per year within three years by improving efficiencies and reducing costs across both Elanco and the newly acquired business.
In addition to the enhanced manufacturing capacity, Elanco will have access to 14 global research and development locations once the merger is complete.
“As a top-tier animal health company, we are better positioned to help our customers respond to the changing external environment and meet increasing demands for animal protein, as well as growing desires for pet ownership,” Jeff Simmons, senior vice president of Eli Lilly and Company and president of Elanco Animal Health said yesterday.
“Our combination will deliver a more comprehensive suite of existing solutions, but will also allow us to dedicate greater resources to new product discovery and development.
Confirming the sale, Basel headquartered Novartis said it accounts for the first quarter of 2015 would show an exceptional pre-tax gain of approximately £3bn from the deal.
The firm said it was now concentrating on driving forward its innovative pharmaceuticals, eye care and generics businesses.