“They are the largest company, and two-thirds of Zoetis’ business is tied to the production animal or livestock market. The company sells products that are used to help producers grow healthy and safe livestock for protein consumption. Zoetis has meaningful exposure to the cattle market,” Ellich says. “The remaining one-third of Zoetis’ business is tied to the companion animal market.”
“Zoetis has a very good management team with a lot of experience, as well as industry-leading R&D out of Kalamazoo, Michigan, led by Dr. Cathy Knupp. The company spends about $400 million a year on R&D which is used to innovate new products or keep existing products fresh through lifecycle extension,” Ellich says.
“Zoetis launched a new anti-itching, atopic dermatitis product for dogs last year called APOQUEL, and the demand was huge. This was a new treatment in an area of unmet need, and the company’s marketing and sales efforts really helped propel it at launch,” Ellich added.
While there were supply issues that constrained the revenue for APOQUEL initially, Ellich believes those issue are now resolved, and that Zoetis will generate a substantial amount of revenue from the drug.
“In the second year on the market it’s going to generate about $125 million in revenue and should top $200 million next year. To put this in context, a blockbuster in the animal health world is $100 million of revenue or more versus $1 billion for human pharmaceuticals,” Ellich says
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