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Elanco divests drug to allay antitrust concerns in Bayer animal health deal

Elanco Animal Health Inc. is selling Osurnia, an ear inflammation therapy for dogs, to U.K. drugmaker Dechra Pharmaceuticals PLC for $135 million in cash.

Greenfield, Ind.-based Elanco said it made an independent decision to divest global rights to Osurnia, which generated revenues of $31.2 million in 2018, in a bid to allay antitrust concerns related to its $7.6 billion acquisition of Bayer AG's animal health business.

Deal closing is based on Elanco entering into a settlement with the Federal Trade Commission, the European Commission and other agencies in connection with its Bayer transaction.

Elanco said it expects to divest a small portfolio of products with total 2018 revenue of about $120 million to $140 million across both organizations to achieve any required clearances globally for the acquisition of Bayer's animal health unit.

The company previously said it expects to close the deal with Bayer in mid-2020, despite the extension of the waiting period after the FTC requested additional information from the companies related to the proposed acquisition.

Goldman Sachs served as financial adviser, while Paul Weiss Rifkind Wharton & Garrison LLP, Covington & Burling LLP, and Slaughter and May acted as legal counsel to Elanco in the Osurnia sale.