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Elanco To Sell Manufacturing Sites In Shawnee, Kan., And Speke, U.K.

Elanco Animal Health Inc. (ELAN) announced exit of three manufacturing sites. TriRx Pharmaceuticals will purchase the sites in Shawnee, Kan. and Speke, UK, including planned transfer of 600 employees.

The sale of the Shawnee facility is expected to close in the second half of 2021, while Elanco expects closing on the sale of the Speke facility by early 2022.

Financial terms were not disclosed; however, the company anticipates an impairment charge of $245 million to $305 million to be taken in the second quarter of 2021 related to these events, as the assets associated with these facilities will be classified as held for sale at quarter-end.

The impairment is expected to drive a reduction of second quarter and full year 2021 GAAP financial guidance for earnings per share by $0.43 to $0.54, but have no impact on adjusted earnings per share guidance for those periods.

The sale of the Shawnee facility is expected to reduce full year 2021 revenue by $10 million to $20 million as a result of exiting third-party contract manufacturing operations.

In addition, Elanco announced the consolidation of its manufacturing operations in Latin America, ceasing operations at the legacy Bayer Animal Health manufacturing site in Belford Roxo, Brazil, transferring these operations to the company's site in Santa Clara, Mexico, and a contract manufacturer in Brazil. The Belford Roxo site, which currently supplies six smaller, regional products, is expected to be decommissioned in early 2022.

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