EELANElanco Animal Health Incorporated

Elanco makes medicines and vaccines for animals — a business spun out of a pharmaceutical corporation.

The veterinary market is gentler than the human one: no insurers dictate price, patent expiries pass without a collapse, products stay on the market for decades. The pet owner pays out of pocket, and spending on animal health grew faster than consumer spending generally for decades.

The company left its parent carrying heavy debt and has spent years reducing it by selling non-core lines. The bet is on treatments for pets' chronic conditions — dermatitis, joint pain, parasites — where the course is lifelong. The other half, livestock medicine, depends on meat and milk prices. Risks: debt, competition and execution of launches. The company pays no dividend.