(Reuters) - Eli Lilly & Co’s Elanco Animal Health unit expects its initial public offering to raise up to $1.45 billion, betting on increased appetite among investors for animal health companies.

Eli Lilly & Co CEO Dave Ricks poses for a picture at the J.P. Morgan Healthcare Conference in San Francisco, California, U.S., January 9, 2018. REUTERS/Caroline Humer

The IPO of 62.9 million shares is expected to be priced between $20-$23 per unit, with the company having a valuation of about $8 billion at the high end of the range.

The animal health industry has become attractive for investors with revenue projected to expand at a 5 percent rate until 2023, according to data firm Vetnosis.

“Farmers, ranchers and the animal business is not highly cyclical and so Elanco has a very high market share,” Jay Ritter, an IPO expert and professor at the University of Florida.

“The relatively high price earnings ratio that this sector has reflects the low volatility of their future income and cash flow,” Ritter, who owns stock in Zoetis and Lilly added.

“It is a relatively safe sector for investor.”

Zoetis Inc, the largest animal health company has nearly tripled in value since Pfizer listed it about five years ago.

Zoetis' IPO here raised $2.2 billion and the company currently has a market capitalization of $43 billion.

BMO Market analyst said Elanco’s valuation range was significantly below the brokerage’s $12 billion to $13 billion expectation, but added that given Zoetis’ performance, it expects strong demand for the IPO.

The Greenfield, Indiana-based Elanco, which offers more than 125 products to veterinarians and food animal producers in more than 90 countries, is the fourth-largest in the animal health industry globally.

It earned $9.9 million and brought in revenue of $1.5 billion for the six months ended June 30.

Lily said in July it would take Elanco public, marking the end of a nine-month review that weighed options for the unit. The drugmaker will hold about 82.3 percent of Elanco after the IPO, the company’s regulatory filing showed.

Lilly shares were down about 1 percent at $104.69 on Thursday. Lilly has risen 25 percent through Wednesday’s close.