To completely destroy Lycan / Half-Breed in The Order 1886, you need to first understand what this creature actually is. Lycan's are ruthless, fearless and cruel monsters which would not think twice before ripping Sir Galahad's head apart.
Once you encounter a Lycan there is no turning back, try to recollect all the foul words you have ever learnt (you will need them!) and start preparing for super heart thumping experience.
Killing the Lycan is not easy as killing human enemies, it wont be like you fired a few shots and your enemy is down. Destroying a Lycan will need a little bit of planning and concentration.
The final destination of completely destroying a Lycan is piercing a sharp knife through its heart. To reach your aim, you need to start off with trying to cause severe injuries and make the Lycan weak. This will take lot of patience.
Shower it with a lot of gunfire which will paralyze the beast for only a few short seconds, this is when you go for the final blow. Be super speedy, equip with a knife and just go for it. You can also use the M2 Falchion Auto-Rifle to stun it.
During the whole drama of you trying to kill a Lycan, do not expect him to be easy and obedient, Lycan will give a hard time. If it grabs your character, don't forget to hit the X button as many times as you need to. When you need to dodge it desperately, tilt the left analog stick away from it and hit the X button simultaneously.
Another useful action will be using Sir Galahad's Blacksite ability to slow down things causing more injuries to the ware-wolf. Using the C-81 Maschinenpistole along with Blacksite will bring about a great deal of destruction.