Elanco

A.1.1. In 2024, Elanco refreshed its Environmental Social Governance Material Issues Assessment. As part of this, it looked at the risks and impacts related to antimicrobial stewardship. The assessment highlighted the risk that shared-class antibiotics in the food chain could harm human health through antimicrobial resistance (AMR), as well as the compliance risk and/or loss of market access associated with antibiotic regulations. In its Annual Report (AR) for 2024, Elanco continues to recognise that regulatory restrictions and bans on the use of antibiotics, changing market demand, increased public pressure to reduce antibiotic use and increased demand for antibiotic-free protein could materially affect its business. Elanco does not quantify the impact of each risk but continues to note that in certain markets some of its farm animal products have already been negatively affected by changes in consumer sentiment for proteins and dairy product produced without the use of antibiotics. Elanco states that its revenue from shared-class antibiotics decreased 8% in 2024 compared to 2023. As before, it puts the decrease in percentage of its total revenue from shared-class antibiotics down to changing regulations, market demand and its approach to antibiotic stewardship. The company notes that the sale of ionophores, a type of animal-only antimicrobial has not been materially impacted by regulations or changing market demand in many international markets. Elanco does not explicitly recognize AMR as a material financial risk in its own right, despite the risk that AMR could reduce the clinical efficacy of the antibiotic products it sells. A.1.2. Elanco continues to highlight that it has shifted its business away from shared class to animal only antibiotics. Elanco also continues to disclose the steps it is taking to combat antimicrobial resistance in its public reporting. Such actions include helping farmers to make well-informed management decisions to reduce the need for antibiotics, promoting non-medically important antimicrobials as the first choice, expanding its range of alternatives to antibiotics (enzymes, probiotics and prebiotics, parasiticides and vaccines), monitoring antibiotic susceptibility, and providing regular training and information on AMR. As before, Elanco’s ‘Guiding Principles’, which outline the company’s definition of responsible antibiotic use for its key stakeholders, continues to classify prophylaxis as a responsible use practice. In 2022, the EU restricted prophylactic use to exceptional circumstances and only for the treatment of individual animals. A.1.3. Elanco continues to provide a partial breakdown of its revenue from antibiotics in its AR for 2024. The company noted an overall decline in recent years in total revenue from sales of shared-class antibiotics, which it attributes to changes in regulations, market demand and its approach to antibiotic stewardship. Globally, during 2024, revenue from shared-class antibiotics decreased 8% in comparison to 2023 and represented 9% of total revenue (a 1% decrease in comparison to 2023), while the company’s revenue from animal-only antibiotics increased 4% in comparison to 2023 but continues to represent 15% of total revenue. Note that in 2024, approximately 89% of the company’s revenue from animal-only antimicrobials resulted from the sale of ionophores. This has changed very little from the previous year’s reporting (90%). Furthermore, the company continues to disclose that its ‘key farm animal products’ that represent 1% or more of its revenue include Rumensin™, an animal-only antibiotic and an ionophore, Baytril™, a shared class antibiotic, Denagard™ a shared class antibiotic, and Maxiban™ and Monteban™, animal-only antibiotics and ionophores, Pulmotil™, a shared class antibiotic and Surmax™ an animal-only antibiotic. Elanco indicates the species these are to be used in and whether these are shared class antibiotics, but does not provide the World Health Organization (WHO) classification or revenue from each. Among these, enrofloxacin (the active ingredient in Baytril™) is classified by the WHO as a Highest Priority Critically Important Antimicrobial (HPCIA), while tilmicosin (the active ingredient in Pulmotil ™) is classified by WHO as a Critically Important Antimicrobial (CIA).

A.2.1. Elanco does not have a responsible sale and marketing policy explicitly outlining how antibiotics should be marketed and sold. It states that it has removed growth promotion from labels and requires veterinary oversight in the US and other markets. It also highlights that it promotes the use of animal-only antibiotics as the first choice followed by a tiered approach based on the WHO ranking of antimicrobials, although it is unclear if this is embedded in its sales and marketing strategy. Elanco's Healthy Purpose™ pillars previously guided its disclosure in its yearly ESG report and contained two antimicrobial stewardship goals related to the marketing and sale of antibiotics: (i) “responsible use of antibiotics across our product portfolio and customers” and (ii) to “educate veterinarians and stakeholders about alternative treatments to reduce the need for shared-class antibiotics.” In 2024, the company reformatted its ESG report to its Impact Report (IR) which follows its ‘Go Beyond’ strategy. The IR has not provided a specific update on whether it continues to educate veterinarians on alternative treatments. In 2024, the company also carried out its AMR portfolio review which it states resulted in company-wide training targeting its commercial, marketing, sales and technical teams to enhance their understanding and application of antimicrobials. It is unclear what was included in this training specifically related to the marketing of antimicrobials. A.2.2. Elanco continues to focus on shifting its business away from shared-class antibiotics. The company states that it has removed growth promotion from its labels and requires veterinarian oversight in the U.S and other markets. While it appears that the company does not sell any shared-class antibiotics for growth promotion, it could provide further clarification by explicitly stating whether this equates to a global ban on growth promotion. Veterinary-only antibiotics, which include ionophores, are excluded from this work and in regions such as Brazil, the company promotes its ionophore product Zimprova™, which contains Narasin for increasing daily weight gain in cattle. Narasin is also an antimicrobial treatment for coccidiosis infections in chickens. The company provides no evidence that it has removed indications for prophylaxis from labels and actively encourages antibiotic use for disease prevention in its guiding principles. A.2.3. As previously, the company reports that its antimicrobial stewardship efforts are led by the joint efforts of its Executive Vice President of Innovation and Regulatory Affairs, as well as its Chief Medical Officer, who reports twice per year to the Innovation, Science and Technology Committee of the Board of Directors. The company does not explicitly state who is responsible for the sales and marketing of antibiotics. A.2.4. Elanco has not updated its reporting to provide any disclosure on whether sales incentives associated with the sale of antibiotics are driven by the volume of antibiotics sold. In 2024, Elanco agreed to a $15 million settlement with the Securities and Exchange Commission over claims that it misled investors about its reliance on distributor sales incentives. Elanco allegedly used discounts and rebates to entice distributors to buy more products than they needed to meet end-user demand in order to improve its revenue each quarter. It is unclear if antimicrobial sales were included in this.

B.1.1. On its webpage on Antimicrobial Stewardship, Elanco highlights that its approach to combating AMR includes ‘manufacturing controls’ but does not elaborate on this. Elanco has not provided any recent updates to its disclosure to demonstrate how it ensures that antibiotics are being manufactured in a responsible way within its own operations and throughout its supply chain to minimise the risk of antibiotic residues being discharged into the environment. In its 2024 ESG Material Issue Assessment, the company does acknowledge that manufacturing produces wastewater which can negatively impact water quality and that pollution from supply chain entities impacts the environment. Elanco states that it is working to ensure the appropriate treatment and release of wastewater abiding by all local, regional and national water quality standards but does not provide any specific disclosures related to antibiotics residues. B.1.2. Elanco states on its website that contract manufacturers (CMOs) and active pharmaceutical suppliers are required to comply with the Pharmaceutical Supply Chain Initiative (PSCI) principles for responsible supply chain management in their facilities. This is a comprehensive list of requirements for companies; however, antibiotics are not explicitly included. Suppliers are also subject to Elanco’s Business Partner Code of Conduct and the company assesses compliance at regular intervals, although the frequency is not defined. The company states that issues that are identified during audits are addressed and required actions are tracked to completion. B.1.3. The company does not appear to have a policy related to antimicrobials entering the environment. For non-compliance in general, the company states that if issues of non-compliance are identified, a root cause analysis is conducted, and corrective and preventative actions are developed by business partners to address the root cause. The Chief Ethics and Compliance Officer reports monitoring findings to senior leaders, executive officers, and the Audit Committee of the Board of Directors. B.1.4. Elanco discloses in its 2024 Annual Report that it has 17 owned manufacturing sites and 130 CMOs globally. It is unclear where the CMOs are located.

C.1.1. Elanco list the general product categories that it classifies as alternatives which include nutritional health products like enzymes, probiotics and prebiotics, parasiticides and vaccines. In its 2021 Annual Report, Elanco provided a definition for alternatives to antibiotics from the European Medicines Agency (EMA): “a veterinary medicinal product the use of which provides an alternative treatment approach to the use of antimicrobials in animals or that reduces the need for the use of antimicrobials by preventing or controlling infectious disease.” This definition was not repeated in the company’s later ESG reports and IR. It is unclear if this definition is used by the company to classify alternatives and if the company is tracking internally the proportion of its products that would qualify as alternatives under this definition. C.1.2. Elanco continues to provide clear evidence that its portfolio includes alternatives to antibiotics such as vaccines and nutritional health products. As an example, the company continues to highlight its salmonella vaccine, AviPro™ Salmonella Duo. Although not an alternative to antibiotics, the company highlights its 2024 registration of a new generation fluroquinolone (Pradalex) for treating respiratory diseases in cattle and swine. Elanco claims this antibiotic aims to reduce the risk of resistance development. Consistent with previous disclosure, the company does not provide any detailed disclosure around its portfolio breakdown and does not clarify how, or if, Elanco is assessing the efficacy of the products it advertises as alternatives to antibiotics. C.1.3. Elanco has not updated its disclosure to provide details on its revenue from alternatives to antibiotics.

C.2.1. In 2024, Elanco spent 8% of its revenue on research and development. The company does not clarify what proportion of this goes towards developing alternatives to antibiotics. In its 2021 ESG report, the company stated it will seek to invest more than $3.5bn in innovation by 2030 to pursue the discovery and development of products that improve the health and care of animals, including products that would reduce the need for shared-class antibiotics. It has not provided a recent update specifically related to this. C.2.2. Elanco has not made any recent acquisitions of companies focused on developing alternatives to antibiotics. In 2024, Elanco sold its aqua business to Merck Animal Health. The company does not state that this included research facilities. In January 2023, Elanco acquired NutriQuest, an agriculture service provider, which the company reported has helped further its efforts to explore innovative antibiotic alternatives. NutriQuest offers research-based feed and protein technologies, probiotics, and other preventative animal health solutions. C2.3. Elanco has not updated its disclosure to share details about marketing spend on alternatives to antibiotics.

D.1.1. Elanco states that its vision is to move from treatment to prevention, by developing awareness programs and technologies that promote health and could collectively reduce the need for antibiotics. Elanco continues to be engaged in stewardship initiatives focused on increasing the responsible use of antibiotics globally and reducing the need for antibiotics: • Global Program on Salmonella Control in Poultry. Elanco collaborates with producers to implement best practices across all poultry production stages to safeguard poultry health and ensure global food safety. • Elanco’s Food Safety Programme for Poultry Producers helps prevent and control salmonella outbreaks by guiding targeted interventions for salmonella protection during the journey of the egg. In 2024, Elanco educated nearly 150 global producers through this program. • Elanco’s Chief Medical Officer, Dr. Shabbir Simjee, provides regular training and information on AMR, participates in the development of global regulation and helps execute national AMR action plans globally. • Elanco’s Dairy Antibiogram (DAB) initiative in New Zealand focuses on bovine mastitis, a leading cause for antibiotic treatment in dairy cows. The program collects data from dairy farms and combines it with mastitis data from other farms, developing a herd-level profile of mastitis pathogens, which is then shared with the treating veterinarians to inform treatment plans. This supports veterinarians to select antibiotics that are most effective for the pathogens causing mastitis in a herd. The increased effectiveness of treatment decreases the amount of antibiotics required to treat infections. Although there is evidence of Elanco’s stewardship activities throughout its reporting, the company has not provided an update to its Antibiotics Stewardships Milestones since 2021, as published in its Antimicrobial Stewardship webpage. D.1.2. The company is part of several initiatives focused on improving surveillance of antibiotic use and AMR: • Elanco is a founding member of the Clinical and Laboratory Standards Institute (CLSI) Veterinary Antimicrobial Susceptibility Subcommittee which establishes methods for testing antibiotic susceptibility, and for setting interpretive criteria which allow veterinarians to select the most appropriate antibiotics for treating sick animals. • Elanco states that it encourages farmers to log antibiotic use on farms. The company does not disclose any specific measures for reducing antibiotic residues entering the environment from farms.

D.2.1. Elanco continues to provide an overview of the company’s approach to engagements with governments and policymakers around the world in a publicly available document, ‘Public Policy Advocacy and Political Contributions Disclosure’. The company did not share information on the key issues lobbied on or positions taken. This document has not been updated since 2021. Organisations that try to influence the law-making and policy implementation process of the EU institutions must be disclosed on European Commission's Transparency List. This states that Elanco has been active in the EU on topics such as Implementation of Veterinary Medicinal Products Regulation, Implementation of Medicated Feed Regulation, Review of Feed Additives Regulation, EU Action on Antimicrobial Resistance. The company’s stance on these is unclear. According to the U.S. Senate lobbying disclosure database, in 2024, Elanco lobbied on issues related to animal health, veterinary medicine, and antimicrobial resistance. The company's stance on these is unclear.