US drug maker Eli Lilly has said it is considering options for its animal health unit Elanco, which could include an initial public offering, merger, sale, or retention of the business.

The move comes just over three years after the group paid $5.4bn for Novartis’ animal health unit, in a move that made it the world’s second largest supplier of medicines for pets and livestock.

Lilly chief executive David Ricks said: “We are announcing a strategic review of our Elanco Animal Health business. Elanco has developed into a premier animal health company and has been an important growth driver and source of revenue diversification for Lilly.

“Through acquisitions and organic growth, we’ve grown Elanco to a size and scale that now allows us to consider a variety of options to maximise future value.”

Mr Ricks said that it would make an announcement on the fate of the division by the middle of next year and added that it could ultimately decide to retain the business.