Zoetis (ZTS) BNP Paribas 2nd Annual Animal Health Day summary

Tariffs and supply chain management

• Guidance was updated to reflect enacted tariffs, revising adjusted net income growth to 5%-7% while maintaining 6%-8% organic operational growth.

• Mitigation strategies include inventory management, dual sourcing, pricing adjustments, and potential manufacturing investments, with actions timed based on tariff developments.

• The company leverages its global supply chain and U.S. manufacturing footprint, exporting more than it imports, and continues to lobby for animal health exceptions to pharma tariffs.

• Ongoing scenario planning ensures readiness to respond to evolving tariff situations without premature action.

Librela launch and market dynamics

• Librela continues to see double-digit growth internationally, but U.S. uptake is slower than desired, with only 1.2-1.3 million of 27 million medicalized dogs with OA treated.

• Focused efforts include education for veterinarians and pet owners, targeted DTC campaigns, and leveraging post-launch Phase IV studies to support product efficacy and safety.

• Label updates in the U.S. align with international standards, and vet satisfaction remains high despite slower uptake.

• Transition to moderate OA cases in the U.S. is progressing but not ahead of international markets, with no published percentages yet.

Innovation pipeline and lifecycle management

• The pipeline includes long-acting monoclonal antibodies for OA pain, expected to be accretive to margins and drive incremental revenue despite some cannibalization of short-acting products.

• Lifecycle innovation, such as new formulations and expanded indications, is balanced with net new innovation, supporting sustained growth and lower risk.

• The company maintains a competitive edge in monoclonal antibody manufacturing, with over 50 mAb substrates in development and significant scale advantages.

• Ongoing investment in R&D and manufacturing aims to stay ahead of anticipated competition in 2026-2027.