Speaker 1:
From the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, welcome inside the ICE House. Our podcast from Intercontinental Exchange is your go-to for the latest on markets, leadership, vision, and business. For over 230 years, the NYSE has been the beating heart of global growth. Each week we bring you inspiring stories of innovators, job creators, and the movers and shakers of capitalism here at the NYSE and ICEs exchanges around the world. Now let's go inside the ICE House. Here's your host, Lance Glinn.
Lance Glinn:
We keep our pets healthy with powerful medicines that protect, prevent, and heal. From vaccines that stop deadly diseases before they start to monthly treatments that shield against ticks, fleas, and heartworms, modern medicine is often our pet's first line of defense. With the right medicine and expert care, our companions can live longer, healthier, and happier lives right by our side. Elanco, that's NYSE ticker symbol. E-L-A-N is a global leader in pet medicine, delivering innovative solutions that help pets stay protected and thrive. Its portfolio spans everything from vaccines and parasite prevention to treatments for chronic conditions, ensuring high-quality care at every stage of life. Our guest today, CEO, Jeff Simmons has been part of Elanco's journey for over 30 years, but became the CEO in 2018. Since then, he's helped accelerate innovation and strengthen Elanco's position at the forefront of the animal health industry. Jeff, thanks so much for joining me inside the ICE House.
Jeff Simmons:
Great to be with you, Lance. Thank you.
Lance Glinn:
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, right? There's constant change in today's business world. So I do want to start just by taking it back now three decades. What first initially drew you to Elanco and what is it about the company and its mission that has kept you so deeply committed and at the same place over these last 35 plus years?
Jeff Simmons:
I tell the story to every new employee group that I speak to that I'm an upstate New York farm boy, we struggled all through the '80s trying to survive in the dairy business. My dad also got into the grape business, and so it was like, hey, everybody had to leave the farm for two years, Lance, and go out and get an experience and then if you wanted to, to come back. So I literally on my Elanco application in 1989 was, "Hey, I'm flexible in upstate New York. I can move as far south as Pennsylvania, but not in Pennsylvania. I don't want to go to New England or Ohio." Well, six months in, I get this sales job and I actually get transferred to Indianapolis and the rest is history. But I remember distinctly after the interview of Elanco standing in an airport putting a quarter in the payphone back then, there were no cell phones and telling my dad, hey, I think I'm going to take the job not with Welch's, that company you wanted me to take because we were in the great business. I'm taking it with Elanco.
Jeff Simmons:
Why? Because of two things. They laugh in the hallways and they talk like it's theirs. My pig business, my product, my community, my team, and I will tell you today, 35 years later, that laughing in the hallway we call culture and the my is ownership. And I would say 35 years later, those two principles in Elanco have prevailed. There is a very passionate, purpose-driven culture with people in the center and there is a love for the business that creates ownership at another level and that's prevailed. And the two years they gave up. I still send a little money home to my brother and dad. I'm a virtual farmer, but it doesn't come back to Indiana much.
Lance Glinn:
So Jeff, this longevity gives you a rare perspective. You mentioned 1989 when you sent in that application. You've experienced Elanco through different business cycles, strategic pivots, global challenges, just how has that deep institutional knowledge, the 35 years of it, shaped the way that you lead the company now and make decisions for its future?
Jeff Simmons:
Yeah, I think there's duality in anything that's good. There is how do we stay with the values, the legacy. We've got three values that came from our parent company, Eli Lilly. There is a culture, as I mentioned, that purpose and people and all the potential. There's those things you say, hey, we want to stay rooted in, this is who we are. Making animals lives better, makes life better. At the same time as Jack Welch once said, "Hey, when the rate of change on the outside is faster than the rate of change on the inside, the end is near, you've got to reinvent." So it's legacy, values, staying rooted in that. And I think over the 35 years, I respect. There's not a week that goes by I don't talk to some legacy Elanco person from five decades, four decades ago to stay rooted in that.
Jeff Simmons:
At the same time, we got to stay... We've never been in the animal business more relevant to society today with pets and protein than we are. So it's that constant every day reinvention of yourself to stay young. I say, how old are you? And I'm not talking about physical age. I think COVID taught us a lot of people got really old or reinvented themselves and it created really a split and it taught me reinvention every couple of years is critical.
Lance Glinn:
So full disclosure, I want to go through a little bit of my pet history. I grew up without pets, right? My family, not that we were allergic, my parents just three kids, they didn't really have time for a furry friend in our house. That's not true. I had a Guinea pig, I had hermit crabs, but I didn't have the cat or the dog or the hamster, so on and so forth. I got married. Now I have a cat, Oliver, who I love very much. I know you have a few dogs. Correct me if I'm wrong, you're a Labrador guy. You mentioned that you obviously grew up on a dairy farm as well, but your team let me know a dog guy, at least right now, millions across the country are like you and I, they have pets. So a conversation like this hits at the heart of a lot of people listening.
Lance Glinn:
Where did, I guess first your interest in pet medicine stem from? Because while you say your family was in the grape business, you must have had some sort of interest or understanding of pet medicine. Is it simply just from wanting to have our companions, these furry friends that we have in our lives as long as possible? Or was there more to your interest in the field and industry?
Jeff Simmons:
My story is so similar to so many other people, and man, this pet thing is just, it is powerful. Okay, so let me just share. I grew up on a farm with animals. I had a dog. I remember my first Labrador, Bridget, out in the doghouse, chained to this doghouse, outside, but man, it was such a part of out in the farm traveling with us, sitting in the front of the truck with us, but it was an outside dog. And then suddenly I get married, my wife and I, Annette and I, we have our first dog, Kendall, and boom, it's outside in a doghouse but we started bringing it inside and the dogs started to come inside and oh, by the way, our industry was advancing to where fleas and tick control and other things that kept dogs outside can now come inside. The next dog, get another decade plus, and here comes Maggie.
Jeff Simmons:
Now we got kids and Maggie and the kids in the lake house and she's swimming and now the dog is not only coming inside, but it's going upstairs and it's getting into bed with the kids. And now I have Lily and Lakin because one dog's not enough. There's two dogs, and the two dogs are personalities and they're Instagrammed and it's the most photo. I have six kids, my wife and I, the dogs are the centerpiece of the family. And so what I would say is that's been the evolution over the last 40 years of this industry is from outside to inside to upstairs to in the bed, to people willing to spend more on their dog than maybe even themselves. And there's even fewer kids and now there's more dogs. There's not one dog, there's two dogs or there's cats and there's gerbils and there's... So what I would just say is companionship is what this, we were made people to be relational and to have community.
Jeff Simmons:
And to me, I just want to say pets, it's powerful. I came from human medicine company. Now our job is longer, healthier, more active pet lives and to solve all problems, not just ticks and fleas, but now it's pain and it's derm and it's itching and it's allergy and it's extending life. Why? Because making pets' lives better makes people better. The number one non-pharmaceutical intervention, Lance, for anxiety in children in this next generation is a pet. And I'm telling you, we are going to impact anxiety. We're going to impact loneliness of this aging population. When they get left alone, a dog or a cat can make a massive difference.
Jeff Simmons:
So I am a purpose-driven guy and I think everyone out there, when you get them to talk about their pets, the conversation totally changes because that relationship is real. Anyone that has a pet knows, when they look in the eyes of that pet when they get home, there is something there that is a special connection. And that special connection drives the 10,000 people of Elanco to say, "I want a family early in that little child's life before he goes to school to get a puppy and that puppy to be a dog when he graduates from college, longer, healthier, more active lives of pets." Sorry, my story of pets is a story of the industry's evolution. And my love has evolved with the evolution of my Labradors, but everyone else's, and I love talking to people about pets. So I got to know the name of your pet.
Lance Glinn:
So Oliver's a cat. We've had a few cats over the time we've been together. Oliver's our cat now. And look, your story is similar to mine in the sense that I, or what you said is similar to what I envisioned, right? I just had a daughter, she's three months old, I can't wait to see her grow up, have Oliver side by side with her so that when she eventually goes to school, she comes home. There's Ollie, right? She goes to middle school, there's Ollie, he's probably about five or six right now. I know cats sometimes lived till 16, 17, sometimes even 18 too. So she might have hopefully another decade plus with him. So to think of her as a 10-year-old child one day with Oliver still side by side as her first cat and her being then old enough to recognize Oliver as her first cat because right now she just sees this thing sort of walking around the apartment.
Lance Glinn:
But when she can recognize Oliver as her first cat, that's something I know that I can't wait for and that I am trying to imagine and foreshadow now 10 years before it could potentially even happen. So I can sense your passion. I'm very passionate, obviously about pets as a whole, like I said, I didn't grow up with any, but since having cats I could see why people love having pets so much. Well still understanding, they're obviously a huge responsibility. And even cats, you got to make sure you do your best to take care of them.
Jeff Simmons:
Yes.
Lance Glinn:
So you spoke to obviously the evolution of the industry, but being with the company for 35 years, you've obviously had the front row seat to Elanco's evolution. You mentioned early days as a division of Eli Lilly to becoming a global independent leader in animal health. Just talk to me about the biggest shifts that you've seen over the last three plus decades that have brought Elanco now to this point where it is.
Jeff Simmons:
Yeah, we were like our industry. So when you think animal health, think of over 20 species of animals or if farm animal were pet. I'm just talking about the industry. Elanco is very similar. So cattle and pigs and chickens and sheep, and these are all things that are driving to a protein industry that has great trends as well, which we can talk about. And we're in over a hundred countries and 20 species of animals. So man, you touch a lot of space and a lot of lives every day with pets and protein. So the industry has really evolved from a very heavy livestock to the evolution of the pet industry to it becoming more global.
Jeff Simmons:
So the whole protein movement of more protein in the diet and the pet movement and the humanization of pets have been the two tailwinds of the industry. And so what I would say is we all kind of grew up animal health companies as divisions of human pharma, taking compounds that were maybe used in other forms and reworking them, doing research with the FDA, very regulated, very science-based industry to make sure that hey Ollie, the cat, gets a product that works and does exactly what it says and your veterinarian feels very confident in prescribing it to you and to Ollie. So that to me is the evolution of the industry.
Jeff Simmons:
Elanco story is we were part of, in our name, Elanco, it stands for Eli Lilly and Company, biggest pharmaceutical company today. In 2018, we spent 63 years inside that company and we grew and we were a division, one of the divisions of Lilly and we grew and we helped them through a time of when they were building their pipeline, we grew. And then in 2018 we spun out, we became a New York Stock Exchange company and we spun out and became an independent company. We acquired Bayer Animal Health before that, Novartis Animal Health and Johnson & Johnson Animal Health. We acquired those companies to build a global independent company. And here over the last few years as we'll get into, we have built a pipeline of innovation that we plan to bring to the industry pet and farm animal.
Jeff Simmons:
We're going to have seven blockbusters we're launching right now that touch everything from itching dogs to parasiticides, tick, flea, heartworm in dogs to a parvo virus that kills 700 puppies a day that we have the top treatment for, to how we can actually create less to no footprint on a cattle operation. So these are really relevant problems and big spaces as an independent company. We're one of the only few companies that can reach the world's animals with solutions with over 10,000 people.
Lance Glinn:
So you bring up the word innovation, and that's something I want to touch on because it's obviously a word that gets thrown around a lot among different companies and different industries. But at Elanco, based off of what you're saying and based off my own research, it's clear that that word is embedded into the company's DNA. So first before we talk specific innovation and specific products, just how would you describe Elanco's core philosophy around innovation and the process from beginnings in a lab to the end result of one day helping Oliver the cat?
Jeff Simmons:
We grew up with the roots of human pharmaceuticals. And so I say something very clearly as 35 years in animal health is it all starts with science and science is our constant, it is our center pillar of everything we do. Science has to be in the center, it has to have rigor, and we have to have an independent party like the FDA or the EMEA that actually views that science. Why? To assure that, hey, we need to make sure that drug is safe, it's efficacious, it has the right impact on the animal, not the wrong impact. We have the right profile. So I start there to say I believe strongly in a very high bar of science so that when we deliver a product to the industry, they can assure it does what it says it does. And then we actually follow that up with good regulatory overview every year and every instance. So that's one.
Jeff Simmons:
Then two is we then look and say, hey, as our company we say we want to solve today's biggest problems with best or first in class. So back early in the lab, there's lots of rigor, takes sometimes anywhere from 6 to 10 years to bring a product to the market. Even once we have the compound, 6 to 10 years of research, running clinical studies, doing everything with concurrence of a FDA regulatory body, and then we just send you to say, hey, when we bring a product to market, for us, it's got to be something different. It's got to add more value. We're not going to bring me too products to the marketplace. And so as an example, we are launching right now the first product that actually has four active ingredients in a pill for dogs called Credelio Quattro.
Jeff Simmons:
And that will cover ticks and flea and also worm control, kind of the broadest coverage. And that will allow a veterinarian to give to a pet owner a pill once a month and that will cover the needs of that pet owner. That's something that has not been done before. Just like the dairy farmer, 45,000 cows that I was on at four in the morning on Tuesday in Kansas that we have a product that's going into his feed, it's kind of like an antacid that reduces burping by 30%, that reduces a footprint that a Nestle or a Danone or a Starbucks is paying to say, "Hey, I'm getting dairy that is actually reducing the footprint of the environmental impact." So it's doing profound things with a science-based backing that changes the lives of people through pets and protein.
Lance Glinn:
So I want to quickly ask about Credelio Quattro as you obviously recently brought it up, the broadest canine oral parasiticide protecting dogs against six types of parasites. Just what does this breakthrough represent in terms of the innovation strategy you guys have and how do you see a product like this just redefining the standard of care for both veterinarians and pet owners?
Jeff Simmons:
Yeah, I'm going to get real personal. I, last night, threw down two Credelio Quattros on the floor to my two dogs and they gobbled it up like a beef treat and they ate it.
Lance Glinn:
Did you have to... Are your dogs ones where you have to mix it in with cheese? Did you have to put it in their food?
Jeff Simmons:
No.
Lance Glinn:
Or they'll just take it nice and easy?
Jeff Simmons:
We have with other products and the industry has with other products, but this is one of the differentiations we believe with Quattro and I had to see it for myself. So we got done with our older Credelio products and now we launched the next generation. So last night we had the next generation at eight o'clock in my kitchen with the two labs. And so of course I'm taking all kinds of pictures sending to my team, but we're going to the lake this weekend over the holidays, ticks and fleas and that muggy weather. I don't need to worry about tapeworms that are out there that are zoonotic even to the family, et cetera. I got coverage. So it's making the solution practical, it's making it easy. It's not making, I don't need to run to the vet or get an injection or I need to take three pills to get the same coverage.
Jeff Simmons:
Quattro brings coverage, Quattro brings easy use, Quattro brings the fastest tick kill that is out there and the first month worm coverage. These are things some of the other products don't have. Ultimately a veterinarian can give these products to their customers and know, hey, I'm giving something that's assured. What's exciting on a business side is it's the biggest market. It's a $6 billion market globally. Think tick, flea, heartworm, other worms. That's a $6 billion market. Inside that $6 billion market in the US is this broad spectrum oral and it is growing like mad. And in the first three months, Lance, we've grabbed 10% market share inside the clinic and we're real excited.
Lance Glinn:
So I was doing some research, I was obviously talking to your team as well as preparing for this conversation and they mentioned this next avenue of opportunity involving Lotilaner and Elanco selling royalty and milestone right in human health to Blackstone. And I want to ask you about that because I found that so interesting. Just what opened the door for this transition and how significant is it to see a molecule not go from human to animal, but to go from animal to human?
Jeff Simmons:
Great question. And I'm really proud of our teams and all the collaboration and Tarsus, a company that actually got formed out of this and is now on Wall Street and doing well is, it's an example that I talk about because it's bigger than Elanco. I want One Health is around human, animal, plant, environmental. We have to take a One Health, I'm moving into a new headquarters that we built and we've got Purdue University joining us, human and animal companies joining us. We're creating this district of 50 acres in downtown Indianapolis right next to Lucas Oil Stadium. And we're calling it the One Health Innovation District.
Jeff Simmons:
And we're going to have students from Purdue and we're going to have human pharma and animal health converging to say if we can get innovation ideas by the next generation saying how do we solve animal, plant, human, and environmental problems, we solve big things. So this was an example where we took a compound that worked in animals and said, hey, this active ingredient actually might work in, believe it or not, eye mites that actually is a problem and this is a safe compound that actually can be used in eye mites. And it started in this company and we actually monetize the royalties off the sales to actually pay down close to $300 million of debt last quarter.
Lance Glinn:
And so you mentioned building this new headquarters right next to Lucas Oil Stadium in Indianapolis, collaborations with Purdue University, with other animal health company or other human health companies to really all come together and continue to work on this innovation. But with this specifically this animal to human transition, do you see this as the start of a new chapter where Elanco could contribute directly to human medicine even more?
Jeff Simmons:
Yes, and here's why. I mean, and the scientists know this is we start right in the targeted species. So we have an active ingredient. We like, for instance, have monoclonal antibodies. Ellen de Brabander, our head of R&D and her team have actually created a great capability using AI and other technology to say, all right, we can target a class of compounds and then we can target problem areas, but we can put it right into a dog or a cat right away where if you think about human medicine, they may need to go through three or four other stages. So we can accelerate the science and early stage discovery faster and understand the mode of action faster. And that learnings be translated into the human side very quickly. And so I actually think this opens a big door of opportunity, Lance, and it's a great question by you to say, hey, we can actually potentially accelerate R&D innovation for human pharma and maybe even plant science as well to solve problems faster and look for us and other major pharmaceutical companies to continue to collaborate. And we're doing that today.
Lance Glinn:
And look, obviously this innovation takes time, right? It's not something that you can have done within a year, two years, three years. It takes, like you said, 6 to 10 years of times to go from beginnings in the lab to ultimately have a product that is approved and that could go into an animal, an animal can use to better its health. We're seeing AI transform industries across the board, drug discovery, disease modeling. How do you see AI enhancing or accelerating R&D efforts at Elanco, particularly as you look to develop more targeted solutions?
Jeff Simmons:
Okay, so I'm not going to be the typical talking head with my talking points on AI. And let me tell you what we got to say. I'm just going to tell you what I think. First of all, I heard the stories about the internet and what the internet did, just the people that lived in the opening of the internet say, "This is game changing." I will just say I three comments personally, Jeff Simmons on AI. One is this is an industrial revolution type trend. It is here, it is big. I tell my six kids, I tell the entire organization, buckle up, start using it, don't fight it. And if you're not putting six, eight hours a week into AI and active use personally, you are going to get behind and you're going to get old fast and you're going to get past. And so this should wake us all up and have a little bit of a personal revival around this.
Jeff Simmons:
And so that's my question every week to a lot of people is how much AI did you use and how are you using it? So there's a personal application. The second is I've got nine direct reports and I need to see a roadmap for all of them on every aspect of how you're using AI. So we have a template and it's productivity, it's innovation, it's organization. Tell me how your department and we're going to start measuring it. And then yes, the two big areas as a company would be in innovation and in productivity, I&P. On the innovation side, it's all about faster decisions, faster targeting, faster getting to failure. In innovation, you still have the 3000 fails to 1 wins. I want to weed those 2,999 out fast.
Jeff Simmons:
So that to me is targeting is really, really key. And then acceleration, targeting and acceleration. And then over on productivity, it's tell me how we can do things more efficiently. Don't get scared it's going to remove jobs and all this. Let's just say, hey, I want to keep this company growing significantly, double-digit, bottom line, whatever we're... Well, guess what? How do we do it? More efficiently. Every million of growths got to come more efficiently. And let's look at that. So we've got a company-wide productivity effort and AI is one of the key pillars and every department is demanded to show me AI productivity. But I think the personal one, Lance, to me, our head of AI is reverse mentoring me right now.
Jeff Simmons:
Matt Bull is mentoring me and he's got a real problem child with me because I'm making him push me on a project every month. And it's hard. I set Saturday morning, one Saturday morning, he made me three hours, take an area that I'm focused on and get as smart as I could and put a presentation together through AI. And that may seem very basic, but if you don't start applying it to your day-to-day work, you're going to get behind.
Lance Glinn:
No, absolutely. I agree with everything you're saying. I think there's no stopping it. And I think the crazy thing about AI is that we have what we have right now, the ChatGPTs, right? All the big tech companies coming up with their own AI models and yet there are still beliefs that we've only scratched the surface of its full capabilities. And with that being said, who knows what its full capabilities are or what yet is still to come with the technology itself. And so with that being said, do you think AI can one day help veterinarians, help pet owners, help companies like Elanco sort of get a head start on things that haven't even happened yet or diseases that might not even be around, really try to anticipate what the market could be or what could be coming next for this industry?
Jeff Simmons:
Absolutely. And I don't even know, we're just on the edge of the surface. I just walked out an hour ago with one of the largest corporate vet clinics in America, and I mean it's all about, hey, labor capacity, faster answers, more efficiency and hundreds of vet clinics that they have. And so to me, one is its efficiency. Two, it's look just on our own media. A year ago we were putting all of our multimedia dollars into Google searches and now it's a lot more around AI searches. And again, Google's part of that, but it's a whole different game on reaching customers, whether they're pet owners or veterinarians, through this is a whole new means of reaching people with the information that's needed. And then I think there's no question a way to say, hey, the use of productivity and technology to enable better, faster decisions on all aspects. I mean recruiting is another one that this can help drastically. So there's also the risk side of it.
Lance Glinn:
Absolutely.
Jeff Simmons:
I mean, we're going to spend time in board meetings this year with our board saying you need to know it and be aware of it and using it to also be able to understand how to protect some of the other sides. You shouldn't be scared of it, but you should know also the downfalls like any good technology and protect that. And you can only do that if you're using it heavily.
Lance Glinn:
So I want to quickly touch on just sustainability and livestock production, and it's something you talked about before. It's obviously become a major focus globally. And how is Elanco working with farmers to reduce their environmental footprint? I know you talked a little bit about dairy earlier and what role does innovation like Experior for example, play in that goal?
Jeff Simmons:
Yeah, I'll first back up and just say, and I'll jump right in. I'll just say, hey, I always, you say 35 years, why this industry? Not why not this industry? Anytime I'm on a campus recruiting, is there any place that's more relevant and more fun to be? And any listener out there that's wondering about a career? Let me tell you, animal health, the power of the 3Ps, pets, the humanization of pets globally, 8 out of 10 homes in the US, only two to three out of 10 homes internationally. The future of this industry or if you're an investor, look at that trend on protein. We consume more protein in the world than we ever have animal protein than we ever have. 104 billion in the industry last year in the US alone, 10 billion is being invested in dairy, why? Processed foods are coming down, MAHA, making America healthy again, sugar coming down, carbs coming down.
Jeff Simmons:
What's the fastest food segment growing today? Animal protein. Even animal protein alternatives down 22% because they're processed. People want taste, cost, nutrition, meat, milk, eggs, fish do that. Fastest growing brands, FairLife Milk, Good Culture cottage cheese, Chomps meat sticks up 370%. So we are in the middle of a revolution of animal protein and I believe it is the best way to help. Why? Because you can say GLPs and others, that's good, but muscle mass matters. Good nutrition matters. So what do we need to do? Well, the next generation, Lance, if I look at Gen Zs and Alphas under 30 years of age, they want two things if they're going to come back to animal protein if they've left it. They want the animal taken care of, they want it healthy, they want it good husbandry, good welfare. And second is they want no environment. So Elanco cast a division to say we're going to help farmers all over this world move towards a climate-neutral farm, capturing as many emissions as it's given out.
Jeff Simmons:
And I was on one of the largest dairies. And I will say they're well on that path to do that. And the Nestle's and the Danones and Starbucks are willing to do this. So Elanco has created an inset carbon market to where we can monetize productivity. We've set up the largest database, especially in the dairy industry where every intervention a farmer takes is captured. It is certified by an independent body to where carbon credits can be sold and then there's a bank that actually monetizes them and CPG companies can get the benefit of that. And farmers are receiving 20 to $30 a cow when they only make $200 a year per cow. So it's got to be economically sustainable for the farmers first. It's got to be great for the consumers and the CPG companies, and it's going to help animal protein go to the next level, which really the world is voting with the demand right now to say they want that.
Jeff Simmons:
So I'm fired up about animal protein right now, and I love to see what's happening in refrigerators all over this world. When you look at, actually, you know what FairLife and Coca-Cola is doing, when I say what cottage cheese and the cheese and the yogurts and the fish and Elanco can help enable that with this climate impact. And so you take a product like Experior, first FDA approved product, it just reached over a hundred million dollars for Elanco. It grew 200% last quarter. Experior actually can reduce ammonia in beef cattle, so it can actually bring the footprint down while actually reconverting some of the energy to protein. And that protein actually that increased protein helps the farmers continue to make money. And we're launching Bovaer and dairy with something very similar, got approval last year that actually will help reduce the footprint by 30% methane, the burping of cows. And that could be another couple of hundred million dollars product just in the US alone.
Lance Glinn:
Absolutely. No, absolutely. So Jeff-
Jeff Simmons:
Sorry, I'm a little fired up on that, but to me, investors and future recruits and everything, why not animal health with the pets and protein trends that we're seeing.
Lance Glinn:
Look, I can sense your passion in it. I think that's evident. I can sense your passion in the industry. I sense your passion in what you do and your passion for Elanco and for helping pet owners, veterinarians, and of course most importantly the animals and the pets that we all have. Be it pets on a farm or pets in our home, be it cats and dogs. So as we sort of begin to wrap up our conversation, Elanco welcomed new CFO, Robert VanHimbergen in May. Just what does he bring to the leadership team and how will his addition help the company accelerate the achievement of its goals?
Jeff Simmons:
Yeah, we've got a great team on the executive level and we have a great, great team across the company. As I said, we've got about a hundred senior leaders globally, 10 on my team and about close to 10,000 people on the frontline serving customers in over a hundred countries. So just like any organization, you got to really be thoughtful on succession. You got to be thoughtful on, as the company grows and is on this. Our growth is accelerating, our innovation is accelerating, we're generating more cash, we're paying down debt. We've de-levered the company, we've got a path to high three times leverage and that's causing the upgrades as people are seeing all of this happening. We're globalizing our innovation and we've got a couple other key approvals coming here in the very near term. So all of this leads to the company on this continuum of increasing value creation in a significant way, and that's what the market's responding to.
Jeff Simmons:
I think Elanco is one of the most compelling value propositions to Wall Street today with the trends and where we are as a company. So I'm looking at a senior team add a great CFO and Todd Young six years helped us a lot. And as we look at his needs personally and professionally, I want to make sure I have a good succession on that job. Bob brings over 30 years global experience, time in China, around the world. He's got great views and understanding with his CPA background on the accounting side, the balance sheet side and what he's going to do, no change agenda.
Jeff Simmons:
He's going to be a catalyst to the trajectory we're on, on growth, innovation, and cash. And he's going to be a great cultural fit relative to his background. That was the number one criteria to me is we have a very close team and we will send Todd off with lots of accolades and I'm a big supporter of him and we will welcome Bob. And that's what good companies do is they just have great succession and great transitions that allow the company to succeed and investors to succeed as well.
Lance Glinn:
So at the beginning of our conversation, Jeff, we spoke to your long history with Elanco. I said over 35 years you've seen the company evolve over the three decades plus that you've been in it. But as you now look ahead, just what's your vision? What's the overall team's vision for what Elanco can and ultimately will become in the next 5, 10, 15 years?
Jeff Simmons:
Yeah, we just had a hundred of our top leaders together last week. We believe in five-year plans to keep ourselves focused. We want an infinite future, but we need finite milestones to create an infinite future. And business is an infinite game, just like education and other things. And so our next five years and our next 70 years, it comes back to keeping in the center pet owners, farmers, veterinarians. These are amazing segments of customers that we serve and pets and protein, but it's all about, we make animals lives better we make life better, but we are going to have the boldest five-year plan we've ever had relative to the relevance of society. As I just told you, our impact is, Ollie, the cat. How do we make that become a reality with your daughter? And we make that cat had the longest, healthiest, most active life to where there's pictures coming out of your home for the next 20 years on the relationship that your daughter has with that cat.
Jeff Simmons:
And we do it in all ways from a new diabetes product we have to life extension to... We want to discover those areas on the pet side. And I just said on the protein side, we want to be part of the obesity epidemic to better lives, more active lives of people and making animal protein and farmers actually give the consumers what they want. We do that. The relevance of almost touching every life, every day with pets and protein, we will rise up and play on the front lines of the world and some of the biggest challenges we have. That's our vision. Do it boldly, do it with purpose, do it with humility. Farmers and vets are very humble people. They're out front, we're behind them. And I give a cell phone number, a little leadership thing I do. I give a cell phone number to everybody in the company, my cell phone, as a symbol to say, yes, I'm accessible.
Jeff Simmons:
But I believe and the company believes that nobody is more important than anybody else. We all have a job to do. And if we do that, the cell phone also symbolizes pick up the phone and call, passive aggressiveness hurts families and it hurts companies speak to people directly, give trust, don't earn it. And let's all solve decisions in the same day by a phone call or a text, not a reply all 30 person email that happens over the course of a month. So we have a cell phone culture to drive humility to come back to say, "Hey, this is all about food and companionship, enriching life, making animals lives better, makes life better."
Lance Glinn:
Well, Jeff, I appreciate what you do for veterinarians, farmers, pet owners, cattle, and of course my most important furry friend, my cat, Oliver, thank you so much for joining us inside the ICE House.
Jeff Simmons:
Thanks, Lance.
Speaker 1:
That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen and follow us on X @ICEHousePodcast. From the New York Stock Exchange, we'll talk to you again next week inside the ICE House. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, express or implied as to the accuracy or completeness of the information, and do not sponsor, approve, or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security, or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of clarity.
