Jeff, thanks so much for joining me inside the ice house.
Great to be with you, Lance. Thank you.
So it's remarkable I must say to spend over 35 years at one company especially in today's business landscape where not only at the C-suite but just with employees in general there's movement all over the place, constant change. So I want to start by taking it back three decades. What first drew you to Elanco, and what is it about the company and its mission that has kept you so deeply committed over these last 35 plus years?
You know, I tell the story to every new employee group that I'm an upstate New York farm boy. We struggled through the 80s trying to survive in the dairy business. My dad got into the grape business, and everybody had to leave the farm for two years to get experience and then come back. I applied to Elanco in 1989 saying I could move as far south as Pennsylvania. Six months in, I got transferred to Indianapolis. After the interview, I called my dad from a pay phone and said I was taking the job with Elanco instead of Welches because of two things: they laugh in the hallways and they talk like it's theirs—my pig business, my product, my team. That laughing in the hallway is culture, and the 'my' is ownership. 35 years later, those two principles still prevail. There's a passionate purpose-driven culture with people at the center and a love for the business that creates deep ownership. I still send money home to my brother and dad. I'm a virtual farmer now.
So Jeff, this longevity gives you a rare perspective. You mentioned 1989 when you sent in that application. You've experienced Elanco go through different business cycles, strategic pivots, global challenges. How has that deep institutional knowledge shaped the way you lead the company and make decisions for its future?
I think there's duality in anything good. There's how we stay with the values and legacy. We have three values from our parent company, Eli Lilly, and a purpose-driven culture. But as Jack Welch said, when the rate of change outside is faster than inside, the end is near. You've got to reinvent. So we stay rooted in legacy values while constantly reinventing. I talk to legacy Elanco people from decades ago to stay grounded. At the same time, we've never been more relevant to society with pets and protein. COVID taught me that reinvention every couple years is critical.
Full disclosure, I want to go through a little of my pet history. I grew up without pets—just a guinea pig and hermit crabs. Now I have a cat, Oliver, whom I love. I know you're a Labrador guy, you grew up on a dairy farm. Millions across the country have pets, so this conversation hits home. Where did your interest in pet medicine stem from? Was it simply wanting our furry companions to live as long as possible, or was there more to your interest in the field?
My story is so similar to many others. I grew up on a farm with animals. My first Labrador, Bridget, was an outside dog. Then I got married, and we had Kendall, who started coming inside. The industry advanced so fleas and tick control allowed dogs to come inside. Now with Maggie, the dog is not only inside but upstairs and in bed with the kids. Now I have two dogs, Lily and Lake, and they're the centerpiece of the family. That's the evolution of the industry: from outside to inside to upstairs to in the bed, with people willing to spend more on their dogs than themselves. Pets are powerful because people are made to be relational. Our job is longer, healthier, more active pet lives. The number one non-pharmaceutical intervention for anxiety in children is a pet. We're going to impact anxiety and loneliness in aging populations. That drives our 10,000 people at Elanco to say we want that puppy in a child's life from the start and for that dog to be with them through college. I love talking to people about pets.
Oliver's a cat. We've had a few cats. Oliver is our cat now. Your story is similar to what I envision for my daughter. She's three months old, and I can't wait for her to grow up with Oliver side by side so that when she goes to school, there's Olly. Cats can live 16-18 years, so she might have another decade plus with him. I can sense your passion, and since having cats, I understand why people love pets so much. So you spoke to the evolution of the industry, but being with Elanco for 35 years, you've had a front-row seat to Elanco's evolution from a division of Eli Lilly to a global independent leader. Talk to me about the biggest shifts over the last three decades that brought Elanco to where it is today.
Our industry covers over 20 species—farm animals and pets. Elanco is very similar: cattle, pigs, chickens, sheep driving the protein industry, and we're in over 100 countries. The industry evolved from heavy livestock to the humanization of pets. The protein movement and pet humanization are the two tailwinds. Animal health companies grew as divisions of human pharma, taking compounds and reworking them with rigorous FDA science. Elanco spent 63 years inside Eli Lilly, then spun out in 2018, became a NYSE company, and acquired Bayer, Novartis, and Johnson & Johnson animal health to build a global independent company. Now we have a pipeline of innovation, launching seven blockbusters that touch everything from itching dogs to parasiticides, heartworm, parvo virus, and cattle footprint reduction. We're one of the few companies that can reach the world's animals with over 10,000 people.
You bring up innovation, which is thrown around a lot, but at Elanco it's embedded in the company's DNA. Before we talk about specific products, how would you describe Elanco's core philosophy around innovation, from lab beginnings to helping Oliver the cat?
It all starts with science. Science is the constant pillar of everything we do, with rigor and independent bodies like the FDA to assure safety and efficacy. Then we look to solve today's biggest problems with best or first-in-class solutions. It takes six to ten years to bring a product to market. We want products that are different and add more value. For example, we're launching Credellio Quattro, the first pill with four active ingredients covering ticks, fleas, and worms. That's never been done before. Also, a product for dairy farmers that reduces burping by 30%, lowering environmental footprint. These are profound science-based changes that improve lives through pets and protein.
I want to ask about Credellio Quattro, the broadest K9 oral parasiticide protecting against six parasites. What does this breakthrough represent for your innovation strategy, and how do you see it redefining the standard of care for veterinarians and pet owners?
Last night I gave my two dogs Credellio Quattro and they gobbled it up like a treat. With other products you might need to mix it with cheese, but this one is palatable. It provides coverage against ticks, fleas, and worms, with the fastest tick kill and first monthly worm coverage. It's practical and easy. For vets, it's an assured product. On the business side, it's a $6 billion global market, and in the first three months we grabbed 10% market share in clinics. We're excited.
