The reason for the possible move is weaker sales in recent quarters for Elanco Animal Health (formerly Novartis), which works with vaccines and antibiotics for fish.
According to Indianapolis Business Journal, a sale could start a dramatic new chapter for the 64-year-old unit that employs 6,500 people, including 800 at the headquarters in Greenfield, Indiana.
According to Lilly, sales have fallen one percent in the first nine months of 2017 to USD2.29bn. However, sales in the third quarter increased by five percent to USD740.6m.
Lilly said the company will undertake a strategic review, and a decision will be taken by mid 2018 at the latest.
“Elanco has developed into a premium animal health company, and has been an important growth driver and source of income distribution for Lilly,” said Lilly CEO Dave Ricks in a statement from the company.
Elanco comptetes with Zoetis and Bayer, companies that are taking increasing shares of the market.
A spokesperson for Elanco said last autumn that the setbacks were due to tougher competition, aggressive pricing by rivals and other factors.
The global animal health market is valued at nearly USD35bn and is expected to grow more than five percent a year until 2025, according to Grand View Research, a business consultancy firm located in San Francisco.