Elanco and Royal DSM announce US strategic alliance on Bovaer

By Jim Cornall contact

- Last updated on GMT

Pic: Getty Images/Andrei Stanescu
Pic: Getty Images/Andrei Stanescu

Related tags: Elanco Animal Health, Dsm, Milk, Methane

Elanco Animal Health Incorporated has secured the exclusive US licensing rights to develop, manufacture and commercialize Royal DSM’s methane-reduction product Bovaer for beef and dairy cattle.

Bovaer is a methane-reducing innovative feed additive for beef and dairy cattle, already available in Europe, Brazil, Chile and Australia. DSM said more than 50 peer-reviewed studies and 48 on-farm trials in 14 countries show Bovaer reduces enteric methane emissions by approximately 30% for dairy cows.

With 9m dairy cows on feed in the US alone, the companies said the product would contribute to a reduction of the environmental footprint of dairy products and would support the Global Methane Pledge to cut emissions 30% by 20302. 

The alliance is expected to enable both parties to maximize the opportunity for the product in the US market, once approved, while also nearly doubling previously announced Bovaer production capacity globally. Elanco will be responsible for the US approval process, commercialization strategy and product supply, supporting DSM supply in markets outside the US. Elanco will assess and evaluate the regulatory submission and manufacturing options with the intent to bring Bovaer to the US market as quickly as possible. Indiana has already indicated support for expanded manufacturing investment in the state as it continues to build public-private partnerships supporting the state’s growing agriculture economy.

“We are excited to partner with DSM to start the process of bringing this game-changing innovation to US livestock producers,”​ said Jeff Simmons, president and CEO of Elanco.

Geraldine Matchett and Dimitri de Vreeze, co-CEOs of Royal DSM, said, “This agreement marks an important milestone for DSM, Elanco, and the climate change mitigation efforts of the US. We believe Elanco, as a company that shares our determination to revolutionize the sustainability of the cattle industry, is the ideal partner to help us increase and accelerate the total impact of our game-changing feed additive by bringing us closer to customers across the US. This alliance will help us realize Bovaer’s potential as a powerful solution with a significantly positive impact on the planet. In addition, and fully aligned with our purpose-led performance-driven strategy, the alliance enables us as DSM to monetize our long-term innovation faster.”

Elanco said it expects Bovaer to have annual revenue potential in excess of $200m in the US market with initial contribution by mid-decade. This alliance is not expected to impact Elanco’s previously stated financial commitments. 

Related topics: Commodities, Fresh Milk

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