Jaguar Animal Health, Elanco Announce Global Collaboration for Development, Co-Promotion of Canalevia; Jaguar to Receive Upfront Payment of $1.5M

Jaguar Animal Health, Inc. JAGX and Elanco US Inc., a subsidiary of Eli Lilly and Company LLY, today announced an agreement (the "Agreement") to license, develop, and commercialize Canalevia™, a Jaguar drug product candidate under investigation for treatment of acute and chemotherapy-induced diarrhea ("CID") in dogs.

The Agreement grants Elanco exclusive global rights to Canalevia™, a product whose active pharmaceutical ingredient is sustainably isolated and purified from the Croton lechleri tree, for use in companion animals. Jaguar and Elanco will collaborate on the global development of the product and on its commercialization in the US.

"Elanco continues to seek innovative solutions for our customers and the animals they care for," said Aaron Schacht, Vice President of Elanco Research and Development. "We look forward to collaborating with Jaguar to bring this potential new, exciting solution to veterinarians around the world."

Under the terms of the Agreement, Jaguar will receive an upfront payment of $1.5 million and additional payments upon achievement of certain development, regulatory and sales milestones in an aggregate amount of up to $61 million payable throughout the term of the agreement; product development expense reimbursement, and royalty payments on global sales. The Agreement specifies that Jaguar will supply the licensed products to Elanco, and that the parties will agree to set a minimum sales requirement that Elanco must meet to maintain exclusivity.

Elanco will also reimburse Jaguar for Canalevia™-related expenses, including reimbursement for Canalevia™-related expenses in Q4 2016, certain development and regulatory expenses related to Jaguar's planned target animal safety study and the completion of Jaguar's field study of Canalevia™ for acute diarrhea in dogs.

Jaguar has retained the commercial responsibility for the CID indication of Canalevia™ in dogs, which has received MUMS designation from the FDA and which the company expects will be the first indication available commercially in the next year. Jaguar has established a foundation of direct educational and promotional capabilities for novel anti-secretory agents through its non-prescription product line for production animals.