Animal health companies are investing billions of dollars to build businesses focused on keeping cattle, pigs and poultry healthy for human consumption. A growing global population and changing consumer habits have boosted protein demand, with US consumption accelerated by weight-loss drugs and renewed government emphasis on meat in diets. That has opened opportunities for pharmaceutical firms and investors to pursue technologies that make livestock healthier and improve farm efficiency.
Roddy O'Neil, who leads the healthcare group at Lincoln International LLC, said he expects a lot of activity in the sector over the next 24 months. The industry plays a central role in keeping the world's food supply running without major disruptions. Poultry vaccinations keep producers from culling entire flocks, while wound treatments and parasiticides for beef cattle guard against ticks and parasites such as New World screwworm, which can be deadly if untreated.
This year has brought several high-profile deals. Merck & Co.'s animal health unit agreed in June to acquire poultry technology company Targan Inc. while advancing its $895 million expansion at a Kansas manufacturing facility. Elanco Animal Health Inc. bought AHV International, a Dutch dairy cow health firm, in May. Zoetis Inc. agreed in March to acquire Neogen Corp.'s animal genomics business for $160 million.
Livestock health has traditionally been a stable but lower-margin segment compared with pet medicine. Products must be safe for both animals and the humans who consume them, which lengthens innovation timelines and adds regulatory complexity. Even so, venture capital firms spent a record $470 million on global livestock management this year, according to PitchBook data through Nov. 3, with about $88 million tied directly to animal health, an all-time high for that category.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing