Elanco Shares Rise on USDA Approval for New Canine Dermatitis Drug
The new treatment, Befrena, positions Elanco to challenge rivals in the lucrative $1.3 billion U.S. pet dermatology market, marking another key win for its companion animal pipeline.
Shares of Elanco Animal Health (NYSE: ELAN) climbed in trading Tuesday after the company announced it had received approval from the U.S. Department of Agriculture (USDA) for Befrena (tirnovetmab), a new treatment for canine dermatitis.
The stock traded near its 52-week high following the news, reflecting investor optimism about Elanco's entry into a significant new product category. The approval positions the Greenfield, Indiana-based company to compete for a share of the estimated $1.3 billion U.S. market for canine allergic and atopic dermatitis treatments, a common ailment in dogs that causes chronic itching and inflammation.
Befrena is a monoclonal antibody injection administered every six to eight weeks, designed to control the clinical signs associated with allergic and atopic dermatitis. According to the company's announcement, the therapy targets interleukin-31 (IL-31), a key cytokine involved in sending itch signals to the brain.
This approval marks a significant strategic milestone for Elanco, representing its second major dermatology product nod in the last 18 months. It follows the successful launch of Zenrelia, another therapy in the same category, underscoring the company's focused effort to build a strong franchise in the high-growth companion animal health space. The company has previously outlined its strategy to transition into a "sustainable growth company" with a pipeline focused on innovative therapies for pets.
The new treatment will enter a competitive field dominated by Zoetis, the largest U.S. animal health company, which has long led the space with its blockbuster products Apoquel, a daily oral tablet, and Cytopoint (lokivetmab), a monthly injectable monoclonal antibody. Elanco's Befrena appears positioned to compete with Cytopoint, with a potentially more convenient dosing interval of 6 to 8 weeks offering a point of differentiation for veterinarians and pet owners.
While specific analyst ratings were not immediately updated following the announcement, Elanco's stock has surged nearly 88% year-to-date, signaling strong investor confidence in its growth trajectory ahead of key product launches. The company anticipates a commercial launch for Befrena in the first half of 2026. In preparation, Elanco is investing approximately $130 million to expand its manufacturing capabilities for monoclonal antibody therapies, a clear signal of its commercial ambitions.
The global veterinary dermatology market is projected to reach over $30 billion by 2030, driven by increased pet ownership and a greater willingness from owners to spend on advanced medical treatments. Befrena's approval solidifies Elanco’s position as a key player in this expanding and profitable market segment, providing a new pillar of growth as it diversifies its portfolio beyond livestock health.