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Behind Zoetis’s Multi-Pronged Strategy to Strengthen Its Product Portfolio

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Zoetis’s product portfolio strategy

To ensure the consistent availability of revenues from its 300 product lines, Zoetis (ZTS) has adopted a robust, multi-pronged strategy. Aside from the targeted lifecycle innovations for its existing medicines and vaccines, the company also plans to expand its reach in adjacent areas like biodevices, genetics, and diagnostics.

The company is complementing these efforts by investing in operational efficiency programs and inorganic growth in 2017.

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Multiple initiatives

In 1Q17, Zoetis’s key livestock brands Excede anti-infective, Excenel RTU, Fostera, and Bovi-Shield witnessed label expansions and entries into new geographies.

The company has also focused its resources on expanding in the adjacent diagnostics area. In 1Q17, the company launched a new diagnostic test kit, Witness Lepto, to detect early signs of canine leptospires. The company also managed to secure new approvals for its Serelisa diagnostic kit in 1Q17.

Pharmaq and other acquisitions

On November 2, 2015, Zoetis announced its acquisition of Pharmaq and added the latter’s leading vaccines and other health products for aquaculture to its portfolio. On August 8, 2016, Zoetis also strengthened its veterinary point-of-care portfolio by announcing the acquisition of Scandinavian Micro Biodevices, a leading player in the lab-on-a-chip diagnostics area.

On April 13, 2017, the company announced the acquisition of Nexvet Biopharma, which will add to the monoclonal antibody portfolio of Zoetis and is targeting the reduction of chronic pain in companion animals.

These initiatives are expected to play a pivotal role in helping Zoetis compete effectively with animal health peers like Merck (MRK), Eli Lilly (LLY), and Sanofi (SNY).

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

In the next part, we’ll discuss Zoetis’s operational efficiency program.

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