Hello BST?

Published on: 09:37AM Aug 20, 2008

My last blog posting was two weeks ago, concerning the big news that Monsanto was going to divest itself of its Posilac™ product.  Today, the other shoe dropped, with the announcement that the rBST ball is being handed to Eli Lilly and Co., a global pharmaceutical company whose animal products business is referred to as Elanco.


Elanco already has a marketing inroads to dairy producers through sales of its Rumensin product, and others.  If memory serves, Lilly also developed a product similar to Posilac some years ago, but never brought it to market.  Now, for $300 million, the company is buying the patent, manufacturing plant, and marketing rights for rBST.


As today’s announcement clarifies, the two companies have had a relationship already, with Elanco handling international sales and distribution of Posilac.  Now they have the whole ball of wax.  It will remain a sticky one.


What’s interesting is that Elanco is well aware of the controversies concerning the use of rBST.  That they decided to purchase the product already fully having done due diligence is certainly a vote of confidence that they can make it work profitably for them – and, most importantly, their shareholders.  Just as I noted earlier this month that Monsanto selling Posilac was a huge verdict after all the marketing challenges of the past 20 years, Elanco’s purchase of it is also a huge verdict that rBST is still a horse worth betting on.