GREENFIELD, Ind. — Elanco Animal Health, a division of Indianapolis pharmaceutical giant Eli Lilly and Co., has signed an agreement to purchase ChemGen Corp., producer of livestock feed enzyme products to improve the efficiency of poultry, egg and meat production.

Feed enzymes are naturally occurring digestive enhancers that can help animals better use nutrients in feed.

“Meeting the growing demand for food is one of the most critical issues of our time,” said Jeff Simmons, senior vice president of Lilly and president of Elanco. “This acquisition allows Elanco to leverage our expertise in developing trusted, science-based solutions into the enzyme space, which is an emerging field with significant growth potential.”

Company officials expect ChemGen’s strong presence in the poultry and swine markets in North America and Asia to enhance Elanco’s existing business, while Elanco’s presence in Latin America and Europe represent growth opportunities. The acquisition will provide Elanco with a portfolio of leading feed enzyme products, as well as a pipeline of innovative compounds in development.

ChemGen will continue research and administrative operations at its current location in Gaithersburg, Md., and manufacturing activities at its facility in Terre Haute, Ind., as well as its present sales and field service operations.

“High feed costs and less digestible feedstuffs make enzymes important,” Simmons said. “We will combine ChemGen’s efforts with Eli Lilly and Company’s experience in fermentation and protein products to make enzymes more convenient and flexible for producers. ChemGen complements Elanco’s animal feed portfolio and accelerates Elanco’s work in enzymes.”

Bernie Treidl, president of ChemGen, said his team is looking forward to joining Elanco. “Enzymes are naturally-occurring proteins that have been widely used and accepted in many industries for decades,” he said. “ChemGen has been at work over the past 25 years improving the manufacturing and delivery process of enzymes for feed uses.

“Our focus at ChemGen is to develop innovative feed enzyme products, which aligns well with Elanco’s goal of using technology solutions to meet the world’s growing demand for food.”

ChemGen’s products include Hemicell, an enzyme-based feed additive used in poultry and swine diets to break down soybean and other legume meals, improving feed efficiencies and immune systems and making live weights more uniform; Hemicell-W, a feed enzyme system designed to improve feed efficiency, average daily gain, weight uniformity and litter quality when used in animal diets containing soy and wheat; and Zymannase, an enzyme combination to aid the breakdown of nutrients present in soy and the bioethanol by-product, corn dried distillers grains and solubles.

Simmons said the acquisition will move Elanco toward its goal of helping feed the world’s population in 2050, when it is estimated 100 percent more food will be needed. “And 70 percent of this food must come from efforts in technology,” he added.

The transaction is expected to close in the first quarter of 2012. Upon closing of the transaction, ChemGen will become a wholly owned subsidiary of Lilly and an operating unit of Elanco.