Animal health investments rise as demand for livestock protein grows

GLOBAL – Animal health companies are attracting increased investment as rising global demand for animal protein creates opportunities for technologies that improve livestock health, productivity and farm efficiency.

Growing populations and changing consumer habits are driving protein consumption, while demand in the United States has received additional momentum from the use of weight-loss drugs and renewed government emphasis on protein-rich diets. 

The trend is encouraging pharmaceutical companies and investors to expand their livestock-focused businesses.

Roddy O’Neil, who leads the healthcare group at investment bank Lincoln International, expects increased deal activity in the sector.

“In the next 24 months, we’re going to see a lot of activity in this space,” he said. “It’s happening right now. The protein intake, the price of protein, we’ve never seen anything like this.”

Recent transactions highlight the growing interest. Merck & Co.’s animal health division agreed in June 2026 to acquire poultry technology company Targan Inc.

Elanco Animal Health acquired Dutch dairy health company AHV International in May, while Zoetis agreed in March to acquire Neogen Corporation’s animal genomics business for US$160 million.

Investment expands beyond conventional medicines

The sector’s growth is extending beyond vaccines and pharmaceuticals into genetics, automated systems and animal monitoring technologies.

Merck’s acquisition of Targan, for example, brings technologies for automated chick sexing and high-speed vaccine administration to day-old poultry.

The company is also developing livestock monitoring systems, including a beef cattle monitoring system expected to become commercially available in Australian feedlots in mid-2027.

A planned US pilot project will monitor pigs throughout their production cycle to help determine the optimal time for market.

“There’s a tremendous amount of demand for protein and the industry is trying to meet that demand,” said Abhay Nayak, president of US operations at Zoetis.

“There’s a lot of desire to ensure that they’re using the tools at their disposal to maintain the health of these animals.”

Venture capital investment in global livestock management reached a record US$470 million in 2026 as of November 3, according to PitchBook data. Approximately US$88 million went directly into animal health, also a record for the category.

Joe Crotty, a managing director at Livingstone Partners, said investors are increasingly targeting technologies that improve production economics rather than focusing exclusively on conventional animal health products.

Livestock health gains commercial importance

Elanco chief executive officer Jeff Simmons expects the farm segment to remain central to the animal health industry through the end of the decade. He forecasts annual growth of 4-7% in the livestock category during that period.

The company’s ruminant business, largely focused on cattle, recorded 12% revenue growth in 2026, according to its latest earnings statement.

“The health of an animal, every percentage, half percentage of productivity, just means so much,” Simmons said.

Despite growing interest, livestock health products generally operate with lower margins than companion animal medicines.

Products for food-producing animals face more complex regulatory requirements because treatments must be safe for both animals and consumers.

However, companies continue to see opportunities in vaccines, medicated feeds, parasite control and nutritional technologies.

Pharmaceutical companies and investors are expanding into vaccines, genetics, monitoring technologies and livestock health solutions as producers seek to improve animal productivity and meet rising demand for meat, milk and eggs.

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