Though the firm is among the four largest animal drug producers, Elanco has faced challenges in evolving into a more dominant and profitable competitor. The firm’s stated strategy relies heavily on innovation to commercialize potential blockbuster therapies and feed a product pipeline that can maintain profitable growth over the long term. While we think this strategy is sound—and we have seen rival Zoetis reach impressive success with it—Elanco’s execution has been rather inconsistent. Now the firm has finally begun to realize some of its potential.