(Changes sourcing, updates share price in paragraph 6, adds comment from company in paragraphs 7,8, and 11)

Feb 29 (Reuters) - Investment firm Ancora Holdings said it is pushing for four board seats at Elanco Animal Health and wants to replace the chief executive at the company that makes medicines and vaccinations for pets and livestock.

Ancora nominated the director candidates, including one of the firm's executives, to Elanco's 12-person board and wants to oust CEO Jeffrey Simmons over what the activist investor calls poor performance.

Reuters earlier reported the nominations.

Elanco, which was spun out of pharmaceutical company Eli Lilly, is one of the world's leading developers and makers of animal health products and has a market value of $7.8 billion.

At the end of December, Ancora owned 10.5 million shares, or 2.13% of the Greenfield, Indiana-headquartered company, making it one of Elanco's biggest investors, according to a regulatory filing.

Ancora began engaging with the company last year and has laid out its concerns about margins, drug commercialization, shareholder returns and governance policies, said two sources who are not authorized to discuss the private meetings publicly.

The firm also blames Simmons for a 55% share price drop since Elanco completed its purchase of Bayer Animal Health in 2020, the sources said. Elanco's website says Simmons "guided the acquisition." The share price traded up modestly at $15.94 on Thursday.

Ancora in January made a presentation to Elanco which included suggestions that Simmons would step down in 2025, the sources said. The company said Ancora asked for two meetings and that it engaged with the hedge fund on both occasions.

"Elanco has taken decisive actions to improve performance," a company representative said, adding the stock price has climbed nearly 40% over the last year and that the company has a "robust and innovative pipeline that will generate further growth."

The firm nominated James Chadwick, president of Ancora Alternatives, Andrew Clarke, a former chief financial officer at freight broker C.H. Robinson Worldwide, Craig Wallace, a former senior executive at Ceva Santé Animale, and Kathy Turner, a former senior executive at animal healthcare company IDEXX Laboratories.

Four of Elanco's directors, including CEO Simmons, will stand for election this year, according to regulatory filings. Simmons has lead Elanco for 15 years and helped separate it from Eli Lilly in 2018, according to Elanco's website.

Elanco said its board has not met Ancora's director candidates and added that its leadership team is focused on "minimizing any distractions and executing actions" that it feels are in the best interest of all shareholders.

The company has not yet set its annual meeting date where investors pick their preferred directors if the two sides have not settled the matter beforehand. Last year's meeting was in May. Elanco has previously said it will propose amending its governing documents so that all directors will stand for election every year.

Earlier this week, Elanco reported adjusted fourth-quarter earnings of 8 cents per share, missing Wall Street analysts' consensus estimate of 10 cents per share. A year earlier the company reported adjusted EPS of 19 cents.

Total revenue grew by 5% to $1.04 billion during the quarter but the reported net loss swelled to $141 million, from a loss of $55 million a year earlier.

The company also announced a restructuring that will eliminate about 420 of the company's roughly 9,300 positions worldwide, leading to a charge of as much as $55 million this year but generating as much as $35 million in annualized savings in the future.

Elanco has faced activist investors before.

In 2020 it reached an agreement for board seats with Sachem Head Capital Management and in 2021 it faced pressure from Starboard Value, before the hedge fund withdrew its director nominations.

Ancora is currently also challenging the board at railroad Norfolk Southern, where it nominated eight independent director candidates and wants to replace the chief executive officer. (Reporting by Svea Herbst-Bayliss; Editing by Christopher Cushing and Nick Zieminski)