Innovative Future

Aaron SchachtExecutive Vice President –Innovation, Regulatory, & Business Development

Elanco Investor Day 2020

Today’s Agenda

2

RacquelHarris MasonEVP – Chief Marketing Officer

Aaron SchachtEVP – Innovation, Regulatory, & Business Development

David UrbanekEVP – Manufacturing& Quality

Jeff SimmonsPresident & Chief Executive Officer

Todd YoungEVP – Chief Financial Officer, Corporate Governance, & Strategy

Elanco Today

Innovative Future

Maximizing the Portfolio

Focus on Productivity

Financial Outlook

Q&A

FocusSignificant BrandsAccretive to Growth

CorePortfolio Value Drivers

DefendMaterial Brands, Highly Profitable

Maximizing Value Of Current PortfolioInnovationInternal Pipeline

External Innovation

Enabled by

Overall

Pricing Digital Ecosystem

Omnichannel Leadership

Geographic Focus

2%-3% 2%-3% 0%-1%(1)%-(2)%

~3%-4%Long-Term

Contribution to Average

Annual Total Revenue

Growth

Growth: ~3%- 4% Average Annual Revenue Growth

3

Launch Excellence

Note: All references to forward-looking financials are at constant currency, unless otherwise noted.

What You Can Expect from Today

4

A better understandingof our innovation capabilities and focus areas

A clear articulationof projected outputs

An unprecedented deep dive on Pet Health parasiticides and therapeutics

How market dynamics guide our investment priorities and pipeline structure

5

Focus in Relevant Areas of Need

3Technology PlatformsIncreased from two to three by adding microbiome as a strategic platform in 2019

6Focus Innovation CategoriesReduced from 13 to six by 2018 to increase organizational focus and effectiveness

9R&D SitesConsolidated over time to nine R&D sites with core competencies

U.S.Greenfield, INShawnee, KSFt. Dodge, IA

EuropeBasel, CHMonheim, DECuxhaven, DE

APACYarrandoo, AUSManukau, NZBangalore, IND

Parasiticides

Therapeutics

Vaccines

Pharmaceuticals

Nutritional Health

Vaccines

Pet Health Farm Animal

Biologicals

Microbiome

Chemistry

Pet Health Parasiticides, Therapeutics, and Poultry Vaccines Lead Industry Growth

PH growth has been driven primarily by parasiticides and therapeutics

In FA, the bulk of growth has comefrom poultry vaccines, while swine has been a significant industry ‘drain’

Aqua is growing fast (~15%), but off a small base

Global Industry Revenue Growth Trend, 2017-2019 xx Industry drivers xx Industry drains

Note: Elanco analysis based on Vetnosis, AnimalPharm, and other public and proprietary data sources

CategoryPH growth FA growth

Total CAGR ’17-’19Dog & Cat Ruminant Swine Poultry Aqua Other

Parasiticides +++ = = + = = +++ 6-7%

Vaccines + = - ++ = = ++ 3-4%

Anti-Infective = = - - = = = 0-1%

Therapeutics +++ - = = = = +++ 8-9%

Nutritionals = = = = = = = 2-3%

Other = - - = = = - -1-2%

Total +++ = -- ++ = = +++ 4-5%

CAGR, ‘17-’19 8-9% 0-1% -2-3% 5-6% ~15% 5-6%

6

Balanced R&D portfolio across phases given risk profileMaturing later stage portfolioPet Health with high proportion of research, reflecting future innovation needs

By R&D Phase

7

Industry Dynamics Inform the Structure of Elanco’s Pipeline

By Category

Overall Pipeline Composition

FA Pharma and PH Thera/Para categories with most active projects, followed by PH ParasiticidesSelective approach in Vaccines and FA Nutritional Health

FA Pharmaceuticals37%

FA Nutritional Health8%FA Vaccines

11%

PH Parasiticides

15%

PH Therapeutics

21%

PH Vaccines8%

# of Projects

# Pr

ojec

ts

2616

25 30

35

1613 10

0

20

40

60

Research ExploratoryDevelopment

FullDevelopment

Submission

Farm AnimalPet Health

Composition of R&D Investment

NME67%

LCM29%

Other4%

Funding Choices Take Risk Profile, Innovation Type, and Category Potential into Account

Higher investment in PH reflects market dynamicsNME development is primary driver in PHFA more balanced between NME and LCM

Pet Health57%

Farm Animal

43%

Variable R&D Investment Dollars

By R&D phase By Business Area By Innovation Type

Research7%

Exploratory Development

17%

Full Development76%

Higher late-stage per project development cost drives investment levels in full developmentR&D fixed costs not reflected per project

8

Dedicated investment in NME’s with high unmet needIntentional LCM investment to grow brandsOther reflects platform and discovery investments to secure future innovation

History of successfully growing innovation brands since IPO in 2018

9

A Proven History of Delivering Value Through Innovation

Slide 17 from Elanco 2020 Earnings – Third Quarter Presentation from November 6, 2020Available at investor.elanco.com

Innovation delivered in 2021 as new baseline for the future

Many of these products are now represented as focus products

10

Pet Health Farm Animal12 Launch Equivalents / 20 shots on goal 15 Launch Equivalents / 25 shots on goal

3.1

1.7

2.8

2.9

5.0

2.9

1.3

3.2

2.1

Probabilistic Total Shots on Goal

1.3

1.7

2.6

4.0

3.0

2.7

2.3

1.4

1.0

2025

2024

2023

2022

2021

Probabilistic Total Shots on Goal

Total

4-10

3-7

5-10

7-10

8

25+

Launch equivalents include:NME launches in first major geographyNovel combination productsNovel vaccines and microbialsSignificant lifecycle/geographic entries

Year ofApproval

Near-Term Opportunities Are Higher Probability Compared to Later Years, Reflectingthe Risk Resolution That Occurs as Projects Progress Through Development

2021-2025: 45 Opportunities to Deliver 25+ Launches2021 – 2025: 25+ Launch Equivalents

2021 2022 2023 2024 2025

Development Pipeline Contribution to Revenue

Innovation to Deliver Dependable 2%-3% Revenue Contribution

$80-$100

$500-$600

Near-term Farm Animal launches establish strong foundation for growth

Significant Pet Health products accelerate growth in later yearsCAGR estimates based on 2020 pro forma revenue of $4.37-$4.40 billion

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Pet Health Farm Animal

~2% CAGR

$ Millions

Our Expectations for Innovation

Investment

~8%-9%of annual net sales

10%-12%pIRR

2025 Value

$500-$600Min baseline

probabilistic sales

Gross Margin

60%+on average onpipeline assets

12

Customer Veterinarian Farmer

Pet Owner

pIRR represents the probabalized internal rate of return

2021 Farm Animal New Product Launches

Geography Market Size Launch Quarter

+

+

++

+++

Market Creation Q1 2021

Q1 2021

Q2 2021

Q1 2021

Q2 2021

Species

Cattle

Poultry

Poultry

13

Farm Animal Five New Launches

Product

CattleSwine

Description

Non-Medicated Feed Ingredient Supporting the Natural Defense System; Suitable for RWA(3)

Injectable tulathromycinantibiotic in BRD(1)/SRD(2)

Novel in feed technology with environmental claim

Anticoccidial Portfolio Expansion; Suitable for RWA

(1) Bovine Respiratory Disease (2) Swine Respiratory Disease (3) Raised Without Antibiotics (4) Intent to Announce Two RWA Products in Q1 2021

(4)

+ = up to $200M +++ = ≥$1B++ = $200M - $999M

Note: Elanco analysis based on Vetnosis, AnimalPharm, and other public and proprietary data sources

2021 Pet Health New Product Launches

Description Geography Market Size Launch Quarter

Oral Solution for Weight Loss Management in CKD(1)

+

Oral Monthly Flea/Tick ++

Oral Monthly Flea/Tick/Heartworm

+++ Q1 2021

Q2/Q3 2021

Q1 2021

+ = up to $200M +++ = ≥$1B++ = $200-$999M

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Pet Health Three New Launches

SpeciesProduct

Dog

Cat

Cat

(1) Chronic Kidney Disease

Cat U.S.

Note: Elanco analysis based on Vetnosis, AnimalPharm, and other public and proprietary data sources

Expect to Launch Eight New Products in 2021

Farm Animal

Pet Health

One launch with blockbuster potential

Total of $80-$100M, in-line with long-term expectations of 2%-3% annual growth

Multiple launches across species and geographies

8New Product Launches

Revenue$80M – $100M

(1)

(1) Raised Without Antibiotics 15

Cat U.S.

Market Overview: Pet Health Parasiticides

Category SizeHistory of market growth through innovation

Strong demand through high media spend

Increased customer access through diverse channels

Strong margin profile across all three sub-categories

Increasing competition due to market attractiveness

Market Attractiveness

$5.3bn

Endecto(2)

, $1.1B

Endo(3), $1.1B

Ecto(1), $3.0B

Elanco’s Innovation Focus Areas

Oral endecto~60% ~40%

U.S.

Novel mode of action heartworm prevention

Single dose, season-long ecto

OTC-specific innovation

1 2 3 4INT’L

Note: Elanco analysis based on Vetnosis, AnimalPharm, and other public and proprietary data sources(1) Ectoparasiticides include products that are effective against external parasites (such as fleas and ticks)(2) Endectoparasiticides include products that are effective against both external and internal parasites (such as intestinal worms or heartworms) in a single product(3) Endoparasiticides include products that are effective against internal parasites

16

$5.3B

Pet Health Parasiticide PipelineRobust Pipeline with Intention to Deliver One Parasiticide Innovation on Average Per Year Through 2025

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Identifier Description Species Market Focus Peak Sales Opportunity

1 Credelio Pluslotilaner/mibemycin oxime

Oral Monthly Flea/Tick/Heartworm Dog JP/EU/AUS

Veterinary

2 Credelio Catlotilaner Oral Monthly Flea/Tick Cat U.S. Veterinary

345

3x Endecto(1) Assets• Flea/tick/heartworm• Varied gastrointestinal parasite spectrum

Dog

Cat

GlobalVeterinary

67

2x Extended Duration Ecto(2) Assets• 2 different forms

Dog

CatU.S. OTC

89

2x Novel MoA Endo(3) Assets• Different spectrums and novel mechanisms Dog Global

Veterinary

1011

2x Season-Long Duration Novel Ecto Assets• Flea/tick efficacy• Different delivery forms

Dog GlobalVeterinary

≥$100M$50-$99M$10-$49M

Regulatory Events

2024

Submission Range

(average of one per year)

Total of 11 parasiticides assets with regulatory events by 2025

Five projects with regulatory events between 2021-2024, withan average of one peryear expected

Attractive future market categories well-covered with multiple shots on goal

(1) Endectoparasiticides include products that are effective against both, external and internal parasites in a single product(2) Ectoparasiticides include products that are effective against external parasites (such as fleas and ticks)(3) Endoparasiticides include products that are effective against internal parasites

Table represents total shots on goal, based on current pipeline and does not account for expected attrition. Peak sales

opportunity is deterministic considering all shots on goal.

20202021

Approved (JP)

Launch

20202021

Approved

Launch

Market Overview: Pet Health Dermatology

Category Size Market Attractiveness

Zoetis~70% Elanco

~13%

Virbac~5%

$1.2B

~62% ~38%

U.S.

Other ~12%

Relatively underdeveloped market with strong growth history and more upside potential

Top four reasons for a vet consultation is dermatology (not considering preventive care)(1)

Historical success based on amelioration of symptoms (itch, inflammation)

Almost purely incremental opportunity for Elanco, outside of Atopica and otitis externa

Dominated by two products, offered by a single company

Elanco’s Innovation Focus Areas

Diversity in mode of action and type of molecule (small molecule/biologic)

Itch/inflammation relief and disease modification

1 2

Note: Elanco analysis based on Vetnosis, AnimalPharm, and other public and proprietary data sources

INT’L

(1) Vet Practice Report April 201518

Regulatory Events

Pet Health Therapeutics Pipeline Development of Diversified Dermatology Assets and Specialized Cat Portfolio

19

Identifier Description Species Market Focus

Peak Sales Opportunity

1 Eluracapromorelin

Oral Solution for Weight Loss Management in CKD(1) Cat U.S.

Veterinary

2 1x Transdermal Post-Operative Pain Asset Cat U.S. Veterinary

345

3x Oral Anti-Inflammatory Assets• Differentiated assets with diverse MoAs(2)

- Atopic dermatitis/pruritis- Allergy/inflammation- Pruritis/inflammation

Dog Global Veterinary

6 Oral Cat Asset• Anemia associated with CKD(1) Cat Global

Veterinary

78 2x Injectable Monoclonal Antibody Assets Dog Global

Veterinary

Total of eight pet therapeutics assets with regulatory events by 2025

Six therapeutic assets with planned submissions between 2022 and 2025

Robust dermatology pipeline with oral anti-inflammatory and injectable monoclonal antibody products

20202021

2022

Approved

Launch

Submission

Submission Range

(average of one per year)

2025

Portfolio Enhancements

(1) Chronic Kidney Disease

Table represents total shots on goal, based on current pipeline and does not account for expected attrition. Peak sales

opportunity is deterministic considering all shots on goal.

≥$100M$50-$99M$10-$49M

(2) Mode of Action

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Farm Animal Focuses on Driving Customer Outcomes in High-Value Areas

Technology Platforms Small Molecules, Biological Agents, Microbiome

Identify Customer NeedsFocus on un-met needs or dissatisfaction in large, addressable spaces

Leverage Core StrengthsTechnology platforms

Portfolio enhancements

Enter new categories

Create New PlatformsReplace older technology

Revolutionize the space

Farm Animal PipelineWell-Stocked Pipeline with Breadth and Depth to Support Core Species

21

Identifier Description Species Market Focus Peak Sales Opportunity

1 Experiorlubabegron

Novel In-Feed Technology with Environmental Claim Cattle U.S., CAN

Livestock

2 Increxxatulathromycin

Injectable Tulathromycin for BRD(1)/SRD(2)

CattleSwine Global Livestock

3 Cosabody Non-Medicated Feed Ingredient Supporting the Natural Defense System

Poultry

Global Livestock

4 Anticoccidial Portfolio Expansion. Suitable for RWA(3) U.S. Livestock

550+ Total Projects• Parasiticides• Therapeutics• Nutritionals• Vaccines• Other

Various Species, Incl. Aqua

Various Markets40+ Total Projects• Parasiticides• Therapeutics• Nutritionals• Vaccines

Regulatory Events

Full Development & Submission

Five launches in 2021, including breakthrough innovation, anti-infectives and anti-coccidials

>90 additional projects in Farm Animal, including early development and research

Diverse array of assets, spanning cattle, poultry, swine, and aqua, as well as all focus innovation areas

2021

Approved Launch

EU

Early Development & Research

Portfolio Enhancements

Peak Range

(2) Swine Respiratory Disease(1) Bovine Respiratory Disease (3) Raised Without Antibiotics

≥$100M$50-$99M$10-$49MTable represents total shots on goal, based on current pipeline

and does not account for expected attrition. Peak sales opportunity is deterministic considering all shots on goal.

22

Research Platforms at Elanco – Pioneering Next Generation Products

Biopharma Microbiome ChemistryBiotherapeutics

Rationally Engineered Vaccines

RNA/DNA delivered Biologics

1

2

3

Microbiome Modulation

Microbial Delivery Platforms

Microbes and Drug Discovery

4

5

6

Parasiticides

Therapeutics

7

8

Innovation

Novel Actives

Products

Elanco Innovation ModelInternal R&D Complemented by External Initiatives

R&D Technology Licenses

Product Development

Licenses/Collaboration

Product/Platform Joint Ventures Commercial Alliances

Submission/ApprovalResearch Product

DevelopmentExploratory

Development

Launch/Commercialization/

Lifecycle

Molecule Licenses

External Innovation Ventures

Out-License of Lotilaner for Human Indications

License of KIND 030Complement & Supplement Core R&D Pipeline

GrowthExternal

Internal

~2%3%

Elanco Connected Care Strategy

Capture Additional Value from Elanco Innovation

Provide Entry Points into New PlatformsCategoriesAlliances

1

2

3

23

24

InnovationTakeaways

Annual innovation contribution of 2%-3% revenue growth, with 60%+ gross margin and IRR of 10%-12%

Strong start in 2021: Eight expected launches, delivering $80-$100M

Compelling pipeline transparency, pursuing high-value targets in parasiticides, dermatology, and Farm Animal

Clear growth areas allow for targeted investment, leading to $500-$600M in new product revenue in 2025

Robust innovation capabilities, leveraging best talent and assets from a decade of transformation

Dependable 2%-3% Annual Revenue Growth from Innovation