Inside Zoetis’s Key Revenue Drivers



Zoetis’s Companion Animal Health segment

In 1Q17, Zoetis’s (ZTS) Companion Animal Health segment witnessed revenues ~$517 million, which represents a YoY (year-over-year) operational growth of around 12%. This growth was mainly driven by the robust demand for products like Cytopoint, Apoquel, and Simparica. Zoetis expects to see a double-digit YoY revenue growth rate—close to around 12%—for this segment in 2017.

In 1Q17, the oral tick and flea preventive Simparica reported revenues close to $29 million. The company also reported global sales worth $77 million for its dermatology portfolio, which mainly involves Apoquel and Cytopoint, in 1Q17.

The above diagram shows how the segment contributes a significant portion of Zoetis’s annual revenues. The company competes in this area with animal health peers Eli Lilly (LLY), Merck (MRK), and Sanofi (SNY).

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New product launches

On December 21, 2016, the USDA (US Department of Agriculture) approved Cytopoint, a monoclonal antibody used to reduce the symptoms of canine atopic dermatitis. The drug has been rapidly adopted by veterinary physicians and customers in US markets. The drug was also approved in Canada in March 2017.

On April 26, 2017, the EC (European Commission) also approved Cytopoint for a canine atopic dermatitis indication, thus expanding the geographic reach of this animal health therapy.

Stronghold Plus

On February 15, 2017, EC approved Stronghold Plus, a topical parasiticide administered once every month to treat cats suffering from ticks, lice, fleas, ear mites, and gastrointestinal nematodes and to prevent heartworm diseases in cats. This new therapy combines selamectin, the active ingredient in the Stronghold and Revolution drug lines, with sarolaner, the active ingredient in Simparica.

Stronghold Plus could prove to be a strong addition to the companion animal parasitic medicines market. According to Vetnosis’s Parasiticides Report from September 2016, in 2015, the companion animal parasitic medicines market was worth around $4.2 billion. Until 2020, this segment is expected to grow at a CAGR (compound average growth rate) of ~5%.

Notably, Zoetis makes up about 0.14% of the iShares Core S&P 500 ETF’s (IVV) total portfolio holdings.

Now let’s discuss the growth trends for Zoetis’s dermatology portfolio.


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