Elanco Shares Climb on Historic FDA Animal Drug Authorization
Company receives the first-ever Emergency Use Authorization for an animal drug to combat the growing threat of New World screwworm to U.S. livestock and pets.
Shares of Elanco Animal Health (NYSE: ELAN) gained on Thursday after the company secured a landmark approval from the U.S. Food and Drug Administration, marking a significant development in the animal health sector. The agency granted the first-ever Emergency Use Authorization (EUA) for an animal drug, authorizing Elanco’s Credelio™ chewable tablets to treat New World screwworm in dogs.
In afternoon trading, Elanco’s stock rose approximately 1.3% to $22.05, trading near its 52-week high of $21.82. The move reflects investor optimism about the company's ability to address an emerging biosecurity threat and underscores its strengthening position in the market, which has seen the stock climb over 77% year-to-date.
The authorization addresses a growing concern among U.S. health and agriculture officials. New World screwworms, flesh-eating parasites that can infest any warm-blooded animal, were eradicated from the U.S. decades ago but have been progressing northward since 2022. The infestation can cause severe tissue damage and, if left untreated, can be fatal, posing a risk to livestock, wildlife, and companion animals.
In response to this threat, the U.S. Department of Health and Human Services declared the screwworm a significant potential for a public health emergency in August 2025. The FDA's decision to issue an EUA—a regulatory tool most recently associated with the COVID-19 pandemic—highlights the urgency of the situation. "This is the first time the FDA has issued an EUA for an animal drug," the agency confirmed in a press announcement, signaling a new approach to rapidly deploying veterinary countermeasures.
Elanco's authorized product, lotilaner, sold under the brand name Credelio, is an isoxazoline-class antiparasitic that is already approved for treating fleas and ticks. The FDA stated that based on available scientific evidence, the drug may be effective against screwworm and that its known benefits outweigh potential risks. Due to the potential for neurologic side effects common to its drug class, Credelio will remain a prescription-only product.
This regulatory milestone comes amid a period of strong performance and positive sentiment for the Greenfield, Indiana-based company. Elanco has recently garnered favor from Wall Street, with analysts at JPMorgan upgrading the stock to "overweight" and raising their price target to $24.00 earlier this month. The company also reported stronger-than-expected third-quarter revenue of $1.24 billion, beating consensus estimates. According to Zacks Investment Research, Elanco currently holds a "Strong Buy" rating, reflecting an improving earnings outlook.
The EUA positions Elanco as a key partner in national biosecurity efforts. While the immediate financial impact of treating screwworm under an EUA is not yet clear, the approval reinforces the company’s innovation pipeline and its ability to respond to critical animal health crises. The FDA noted its intent to authorize additional drugs for other affected animal species in the coming months, suggesting a potential expansion of this emergency market.
For Elanco, a company with a market capitalization of over $10.8 billion, the authorization adds another layer to its diverse portfolio of products for both livestock and pets. The news further solidifies a bullish trend for the company, which has been executing a turnaround focused on new product launches, debt reduction, and margin improvement.