Elanco, a division of pharmaceutical giant Eli Lilly and Co., agreed Wednesday to buy the rights to Monsanto's dairy cow supplement Posilac for $300 million. That supplement is made in Augusta, so the manufacturing facility on Lovers Lane will be transferred to the Indiana-based firm as part of the deal.
Elanco makes a generic version of Posilac for international sale in a facility in Greenfield, Ind., which is east of Indianapolis.
Monsanto two weeks ago announced that it wanted to sell off Posilac as part of a strategy to focus more of its attention on the core parts of its business, seeds and herbicide.
Joan Todd, a spokeswoman for Elanco, said the deal still needs to clear federal anti-trust regulators, but she anticipates the acquisition to be complete by early October. Not all terms of the deal were disclosed. Elanco will pay Monsanto $300 million up front, plus "contingent consideration."
Ms. Todd said the company sees Augusta's plant as a state-of-the-art facility with experienced personnel that will be integrated into Elanco's operations.
Elanco employs more than 2,000 people worldwide and has offices in more than 30 countries. The company, which also makes animal health products, had global sales of $996 million in 2007.
"With our rich history and experience in the dairy industry, Elanco is the ideal steward of this vital technology," said Elanco President Jeff Simmons.
Bovine somatotropin is a natural protein produced in all cattle that helps cows produce milk. Posilac is a manmade version of it that was approved by the U.S. Food and Drug Administration 14 years ago.
Elanco has held an exclusive license from Monsanto to market recombinant bovine somatotropin, sold under the brand names of Posilac, Lactotropina and Lactotropin, outside of the United States for the past decade.
"We're pleased Elanco is acquiring this business and will continue to provide dairy farmers with this important production tool," said Carl Casale, Monsanto's executive vice president of strategy and operations.
Since 1994, more than 500 million units of Posilac have been used, Monsanto officials reported.
News of the plant sale was posted on augustachronicle.com at 9:23 a.m. Wednesday.
Reach Tim Rausch at (706) 823-3352 or email@example.com.
BREAKING IT DOWN
THE DEAL: Elanco will acquire all rights to the Posilac brand, in addition to the product's U.S. sales force, technical service team and manufacturing facility in Augusta for $300 million and other contingency payments to Monsanto.
WHAT IS POSILAC? Bovine somatotropin (bST) is a natural protein produced in all cattle that helps cows produce milk. Posilac is rbST, or recombinant bovine somatotropin, which is used by dairy farmers to boost milk production. It was approved by the FDA in 1994.
THE MONSANTO FOOTPRINT: Monsanto has 190 employees at its facility on Lovers Lane in Augusta, according to a count of the Development Authority of Richmond County, which places the firm 19th on the list of manufacturing companies in Richmond County. Tops on that list is E-Z-Go with 1,277 employees.