Zoetis (ZTS) Morgan Stanley 24th Annual Global Healthcare Conference summary

Leadership and strategic priorities

• New CFO/COO sees significant value creation potential, driven by a robust innovation pipeline and a passionate team.

• Focus is on understanding animal health dynamics, leveraging innovation, and executing a value creation agenda.

• Confidence in current financial guidance, with updates expected in November.

Market environment and performance

• Pet care market has shifted from growth to decline, with vet visits and affordability challenges impacting demand.

• Competitive pressures have intensified, especially in derm and parasiticides, leading to share loss.

• Livestock segment is experiencing strong double-digit growth, driven by increased protein consumption in developed markets.

Pricing strategy and competitive response

• Targeted, cyclical price promotions began in Q2 and intensified in Q3 to defend share amid new competition.

• Promotions are highly targeted, not broad-based, and focus on switching customers from competitors.

• List price reductions are limited to areas facing generic competition, such as Cerenia and Convenia.