Pharma giant Lilly snaps up Posilac for ‘at least’ $300 million
A week or so ago, commenting on news that Monsanto was looking to unload its much-despised bovine-growth-hormone business, I offered this nugget of wisdom:
Whatever company buys it probably won’t have Monsanto’s deep pockets.
Hmmm. What’s that word again? Oh, yeah — W-R-O-N-G.
(Hat tip to Jill of La Vida Locavore.)
Today, Monsanto announced that Eli Lilly, one of the biggest of the Big Pharma companies, had bought Posilac (brand name for rBGH) for $300 million. AP reports that Monsanto could get additional cash for Posilac down the road, if it turns out to be a winner for Lilly.
And that bit about Posilac’s buyer not having Monsanto’s deep pockets? Well, Lilly has even deeper pockets than the GMO seed giant. According to Yahoo Finance, Monsanto has annual revenue of $11 billion and cash on hand of $1.75 billion, compared to Lilly’s $19.7 billion in annual revenue and $5.2 billion in cash.
That means that Monsanto’s dumping of Posilac isn’t nearly the victory for consumers that it originally seemed. Lilly clearly has the wherewithal to carry on Monsanto’s tedious, dogged legal war to keep dairies from labeling their products rBGH-free.
Also, the price tag seems a little steep for a product that many, myself included, considered to have waning prospects. To cut a check for $300 million, Lilly clearly thinks rBGH has a bright future. Maybe they’re betting the aquaculture industry will embrace it as a feed enhancer?
Perhaps Lilly hopes to make a killing marketing Posilac in foreign markets. According to AP, Lilly “has been marketing [Posilac] for Monsanto outside the U.S. for 10 years.”