Zoetis (ZTS) Piper Sandler 36th Annual Healthcare Conference summary

Industry trends and growth drivers

• Generational shifts are increasing pet health spending, especially for chronic conditions, positioning the company for above-market growth in companion animal segments.

• Major franchises in dermatology and parasiticides continue to expand, with robust growth in both price and volume, particularly for innovative products like Trio.

• Volume growth is outpacing price increases, indicating strong demand elasticity and continued opportunity for price and volume expansion.

Product performance and market dynamics

• Recent launches, such as Librela and Apoquel Chewable, have contributed to growth, with stocking dynamics factored into guidance and minimal inventory impact expected.

• The dermatology franchise remains defensible due to product diversity, long market presence, and high customer satisfaction, with significant market expansion potential.

• Librela's sequential growth patterns are typical for new launches, with strong long-term prospects and increasing therapy duration in international markets.

Strategic priorities and innovation

• Internal investment in R&D, manufacturing, and digital technology is prioritized over dividends and share buybacks, though all are supported by strong cash flows.

• The pipeline includes promising areas such as oncology, chronic kidney disease, and cardiovascular health, with ongoing life cycle innovation in existing franchises.

• Production animal business continues to grow through geographic expansion and innovation, with a focus on vaccines, genetics, and sustainability.