Zoetis Completes Purchase of PHARMAQ

Zoetis Inc. (NYSE:ZTS) announced that it has completed the purchase of PHARMAQ, the global leader in vaccines and innovation for health products in aquaculture, for a price of $765 million on a debt-free basis, having fulfilled all closing requirements.

Zoetis purchased PHARMAQ from a company owned by Permira IV, a fund managed by the global investment firm Permira, which has been the majority owner of the company since 2013.

“We are very pleased to welcome the PHARMAQ team to Zoetis, and we look forward to the future success we can build together as a market leader in aquatic health,” said Zoetis Chief Executive Officer Juan Ramón Alaix. “The PHARMAQ people, products and late-stage pipeline give Zoetis a strong platform for growth in the fastest growing animal health market.”

Zoetis plans to run the PHARMAQ business largely as a stand-alone operation within the company to help maintain its focus on critical customer needs and R&D milestones that will assure continued success.

About Zoetis
Zoetis (zô-EH-tis) is the leading animal health company, dedicated to supporting its customers and their businesses. Building on more than 60 years of experience in animal health, Zoetis discovers, develops, manufactures and markets veterinary vaccines and medicines, complemented by diagnostic products and genetic tests and supported by a range of services. In 2014, the company generated annual revenue of $4.8 billion. With approximately 10,000 employees worldwide at the beginning of 2015, Zoetis serves veterinarians, livestock producers and people who raise and care for farm and companion animals with sales of its products in 120 countries. For more information,  visit www.zoetis.com.

About PHARMAQ
PHARMAQ is the world's leading pharmaceutical company supplying the aquaculture industry and part of Zoetis, the world leader in animal health. The company provides environmentally sound, safe and efficacious health products to the global aquaculture industry through targeted research and the commitment of dedicated people. The vaccines are manufactured in a state of the art production facility in Overhalla and Oslo, Norway. Administration and research and development activities are based in Oslo with subsidiaries in Norway, Chile, United Kingdom, Vietnam, Turkey, Spain, Panama and Hong Kong. PHARMAQ has approximately 200 employees. The company's products are marketed in Europe, North and South America, and Asia. For further information, please visit our website: www.pharmaq.no/.

Zoetis Expands Manufacturing Capabilities

Zoetis Inc. has finished a 19,000 square-foot expansion at its manufacturing facility in Lincoln, Nebraska. Zoetis and its predecessors have been located in Lincoln since the early 1900’s. The Lincoln location employs approximately 500 people and up to 30 new positions will accompany the expansion. The plant currently produces BOVI-SHIELD GOLD®, RESPISURE ONE® , RIMADYL®, and SYNOVEX®.

Site Leader in Lincoln, Betty Mason said, “Zoetis is excited to expand its footprint in Lincoln and provide veterinarians, livestock producers, pet owners and the animals in their care with a reliable, consistent supply of quality animal health products. The entire community can be proud of our expanded manufacturing operations, which enable us to produce 1,200 finished goods for more than 100 markets around the world.”

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Zoetis Receives Conditional License for Canine Atopic Dermatitis Immunotherapeutic

On August 3rd, Zoetis announced that they received a conditional licnese from the United States Department of Agriculture (USDA) for Canine Atopic Dermatitis Immunotherapeutic. Canine Atopic Dermatitis Immunotherapeutic is an antibody therapy that is designed to reduce clinical signs associated with atopic dermatitis in dogs. The USDA is currently only offering conditional licenses for biological products for canine atopic dermatitis. Zoetis is working towards a full license for Canine Atopic Dermatitis Immunotherapeutic.

Canine Atopic Dermatitis Immunotherapeutic “contains an antibody that specifically targets and neutralizes interleukin-31 (IL-31), a key protein that is responsible for sending the itch signal to the brain. It will be available in a ready-to-use, sterile liquid administered as a once-monthly subcutaneous injection and will help provide sustained relief from the itching associated with atopic dermatitis in dogs of any age.”

Veterinary dermatologist, Dr. Thomas Lewis II said, “The introduction of Canine Atopic Dermatitis Immunotherapeutic will provide veterinarians an innovative new option to address this very challenging skin condition. By helping to relieve itching and the clinical signs associated with atopic dermatitis in affected dogs, it will also help restore quality of life for both atopic dogs and the people who love them.”

Zoetis already manufactures Apoquel, a medication for the control of pruritus associated with allergic dermatitis and the control of atopic dermatitis in dogs. According to Zoetis, Canine Atopic Dermatitis Immunotherapeutic “represents another major innovation to emerge from the proprietary research and development platform Zoetis has built based on new scientific insights into the pathway of allergic skin conditions.”

Executive Vice President and President of Research and Development at Zoetis, Catherine Knupp said, “We have been active in building a research platform in monoclonal antibodies that will have a broad application across species and medical conditions. This first product from that platform builds on our knowledge base in the area of canine dermatology and further reinforces our dedication to developing innovative dermatology solutions.”

Canine Atopic Dermatitis Immunotherapeutic will become available to veterinary dermatologists in the fourth quarter of 2015.

READ THE FULL NEWS RELEASE

Zoetis Announces 2015 Q2 Results

Zoetis Chief Financial Officer, Paul Herendeen said, “With our operational efficiency initiative, we have begun the process to re-shape our business around the key products, markets and manufacturing sites that will make us an even stronger and more profitable leader in animal health. Execution of these plans is underway. We are pleased to see continued efficiency and expense control in this quarter’s results, along with excellent sales growth, and we are updating our full year guidance for 2015 and reaffirming our long-term goals for 2016 and 2017.”

Summarized results of Zoetis' second quarter: 

• Delivers 11% Operational Revenue Growth and 20% Operational Growth in Adjusted Net Income, Excluding Foreign Exchange
• Records $263 Million in Charges Related to Comprehensive Operational Efficiency Initiative, Resulting in Net Loss of $37 Million, or Net Loss per Diluted Share of $0.07
• Second Quarter 2015 Revenue of $1.2 Billion Increased 1%
• Second Quarter 2015 Adjusted Net Income of $216 Million, or Adjusted Diluted EPS of $0.43, Increased 14% and 13%, Respectively
• Updates Full Year 2015 Revenue Guidance to $4.700 - $4.775 Billion
• Updates Full Year 2015 Adjusted Diluted EPS Guidance to $1.63 - $1.68

The full report may be found here.

Zoetis Chief Executive Officer, Juan Ramón Alaix said, “In the second quarter, we generated operational revenue growth of 11% based on the strength and diversity of our business. Our adjusted net income grew 20% operationally, and we continue delivering our long-term value proposition to shareholders -- growing adjusted net income faster than sales. The growth this quarter was driven by the positive performance of our portfolio in both companion animal and livestock products, the addition of Abbott Animal Health products, the growth of APOQUEL® and other new products, and the continued discipline on operating expenses. Our broad portfolio, proven business model and dedicated Zoetis colleagues enabled us to deliver these results as we began implementing significant changes to become more competitive and profitable. We remain committed to maintaining our commercial, R&D and manufacturing strengths, while reducing complexity in our business and achieving our efficiency goals.”

Zoetis Shares 2015 Q3 Dividend

Zoetis has declared their 2015 third quarter dividend payable for common stock holders at $0.083 per share. Holders of common stock on Thursday August 13th, 2015, will receive their payment on Tuesday September 1st, 2015.

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Zoetis Welcomes Questions on Second Quarter 2015 Financial Results

The animal health company Zoetis Inc. is hosting a webcast and conference call during which they will respond to questions from financial analysts. The event will be held at 0830 EDT on Tuesday August 4th, 2015. Chief Executive Officer, Juan Ramón Alaix and Executive Vice President and Chief Financial Officer Paul Herendee will be reviewing the results.

This event is open to investors and the public through Zoetis Events. For those unable to join the live event a replay will be available.

About Zoetis

Zoetis (zô-EH-tis) is the leading animal health company, dedicated to supporting its customers and their businesses. Building on more than 60 years of experience in animal health, Zoetis discovers, develops, manufactures and markets veterinary vaccines and medicines, complemented by diagnostic products and genetic tests and supported by a range of services.

In 2014, the company generated annual revenue of $4.8 billion. With approximately 10,000 employees worldwide at the beginning of 2015, Zoetis has a local presence in approximately 70 countries, including 27 manufacturing facilities in 10 countries. Its products serve veterinarians, livestock producers and people who raise and care for farm and companion animals in 120 countries.

READ THE PRESS RELEASE

A Quick Market History of Apoquel

In May 2013 the “U.S. Food and Drug Administration approved Apoquel (oclacitinib tablet) for the control of pruritus associated with allergic dermatitis and the control of atopic dermatitis in dogs at least 12 months of age. Pruritus, or itching, is the most common sign of allergies in dogs. Developed by Zoetis, Apoquel is the first Janus kinase (JAK) inhibitor approved for veterinary use that targets the itch and inflammation pathway. Apoquel provides fast-acting relief from itching and improves inflammation for the estimated 8.2 million dogs that suffer from short- and long-term allergic skin conditions.” 1 Atopic dermatitis is one of the most common allergies in dogs, affecting approximately 10 percent of the dog population. Itching caused by an allergic skin disease can be an acute, short-term condition or can be recurrent or chronic—all which can impact the quality of life for both the dog and its owner unless they are controlled with effective management. 1

Apoquel entered the market on January 20th, 2014. Apoquel was highly successful and in July 2014 Zoetis could no longer produce enough medication. Zoetis made plans to increase the production of Apoquel but told customers that it will take approximately nine months for production to be increased. Zoetis gave priority to pets already on the medication to allow them to continue therapy and did not fulfill new orders for pets not on the medication. Steven Leder, Senior Vice President of Zoetis’ U.S. Companion Animal Division, said “I apologize for the frustration and disappointment this situation is causing you and the discomfort to dogs that need the product but cannot access Apoquel.”

In February 2015, acquired Abbott Animal Health and this should allow the company to increase production of Apoquel. Zoetis CEO, Juan Ramon Alaix said, “We expect to see stronger performance in this area in the future as we significantly increase the supply of Apoquel in April 2015 and continue our investment in discovering, acquiring and launching new products for companion animals.” In order to meet such a strong demand for Apoquel, Zoetis has reduced manufacturing time and increased manufacturing capacity.

Where does the production and distribution of Apoquel stand today? According to the US Zoetis website, “Apoquel (oclacitinib tablet) is now available for purchase to all veterinarians based on  predetermined order limits. We will closely monitor purchasing behavior and intend to gradually increase the supply of Apoquel throughout 2015. We are committed to providing a better customer service experience in 2015 and appreciate your patience and understanding throughout the past year.”

About APOQUEL

While most current therapies are broad-based agents, APOQUEL is uniquely targeted to stop the itch and inflammation associated with allergic skin disease. It is a selective inhibitor of the Janus kinase (JAK) 1 enzyme, a protein that is integral to the signaling pathway that results in itching and inflammation. Its novel mechanism of action on the JAK enzymes is specifically designed to target the pruritogenic and proinflammatory pathways involved in the itch cycle, allowing control of the signs of allergic disease.

Current treatments for allergic skin disease are limiting. In acute and chronic cases of allergic dermatitis, steroids may effectively reduce pruritus, but the short- and long-term side effects (including polydipsia, polyphagia, polyuria, pancreatitis, gastrointestinal ulceration, lipidemias, diabetes, muscle wasting and iatrogenic Cushing’s syndrome) and intricate dosing schedules can be challenging to dogs and their owners.

“The approval of APOQUEL provides a much-needed, new, targeted treatment choice for dogs that suffer from allergic skin conditions and affords the damaged skin an opportunity to heal, while allowing the veterinarian ample time to identify the underlying cause of a dog’s allergic disease,” said Catherine Knupp, Executive Vice President and President, Research and Development at Zoetis. “Zoetis is committed to research and development programs that address the real world challenges veterinarians face while serving the unmet needs of our veterinary customers in better ways.”

Discovered and developed by Zoetis, APOQUEL will be available by prescription only. APOQUEL tablets, dosed at 0.18 to 0.27 mg per pound (0.4 to 0.6 mg/kg), are administered orally, twice daily for up to 14 days, and then administered once daily for maintenance therapy. APOQUEL may be administered with or without food.

Zoetis plans to make APOQUEL available to veterinarians by the First Quarter 2014. During the coming months, Zoetis will be educating veterinarians on the new science associated with canine allergic diseases to lay the groundwork for a successful launch. For more information, please visit www.Apoquel.com. As the latest addition to the company’s diverse portfolio of companion animal medicines, this approval signifies an important milestone for this leading animal health company.

About Zoetis

Zoetis (zō-EH-tis) is the leading animal health company, dedicated to supporting customers and businesses focused on raising and caring for livestock and companion animals. Building on a 60-year history as the animal health business of Pfizer, Zoetis discovers, develops, manufactures and markets veterinary vaccines and medicines, complemented by diagnostic products and genetic tests and supported by a range of services. The company generated annual revenues of $4.3 billion in 2012. It has more than 9,300 employees worldwide and a local presence in approximately 70 countries, including 29 manufacturing facilities in 11 countries. Its products serve veterinarians, livestock producers and people who raise and care for livestock and companion animals in 120 countries. For more information, visit www.zoetis.com or www.zoetisus.com.

Zoetis Releases First Quarter Results

Last week Zoetis release the results of their first quarter. Here are the highlights:

• First Quarter 2015 Revenue of $1.1 Billion Was Flat Compared to First Quarter 2014; an Increase of 6% Excluding Foreign Exchange
• First Quarter 2015 Reported Net Income of $165 Million, or $0.33 per Diluted Share, Increased 6%
• First Quarter 2015 Adjusted Net Income of $207 Million, or Adjusted Diluted EPS of $0.41, Increased 8%; an Increase of 14% Excluding Foreign Exchange
• Announces Comprehensive Initiative to Simplify Operations, Improve Cost Structure, and Better Allocate Resources to Generate Cost Savings of Approximately $300 Million by 2017
• Updates Full Year 2015 Revenue Guidance to $4.675 - $4.775 Billion and Reaffirms Full Year 2015 Adjusted Diluted EPS Guidance of $1.61 - $1.68

Zoetis has created an Operational Efficiency Initiative that will reduce company complexity and optimize resource allocation and efficiency. The initiative is expected to decrease company costs by $300 million and increase the company’s 2017 operating profit by $200 million.

READ THE FULL REPORT

Zoetis Appoints Roman Trawicki as President of Global Manufacturing and Supply

Trawicki brings more than 20 years of experience in healthcare manufacturing and operations to his role at Zoetis.

Trawicki will oversee the company’s global manufacturing and supply network that produces more than 300 animal health product lines for the company. As the world leader in animal health, Zoetis utilizes a network of 27 internal manufacturing facilities and about 200 external suppliers to manufacture and deliver its products to veterinarians and livestock producers in more than 120 countries.

Trawicki will join Zoetis from GE Healthcare, where he has been General Manager of Global Supply Chain for Medical Diagnostics focusing on diagnostics, injectable contrast media and nuclear medicines. In that role, he managed 2,500 colleagues across the world in 16 manufacturing sites.  He gained additional experience in lean manufacturing, supply and operations during his career roles with GE Healthcare, Coloplast as well as Smith and Nephew.

“I am confident that Zoetis will benefit from Roman’s experience and leadership, along with his manufacturing, operations, and continuous improvement expertise,” said Kristin Peck, Executive Vice President and Group President for Zoetis, with responsibility for manufacturing and supply. “He brings an outside perspective that will strengthen our manufacturing organization and serve us well as we capitalize on advances inside and outside of Zoetis to optimize our network for the future. As always, our collective goal remains to deliver high quality, reliable supply at competitive costs, and drive profitable results for Zoetis.”

Zoetis Acquiring Abbott Health in Deal Worth $255 Million

$255 million deal expands Zoetis companion animal product portfolio to bring veterinarians solutions for pain, diabetes and oncology. Transaction furthers Zoetis’ bolt-on acquisition strategy aimed at expanding complementary animal health businesses to create additional value for shareholders.

The deal was announced in today, just one day ahead of the Zoetis Inaugural Investor Day on Tuesday, 18 November. Zoetis has received a great deal of attention, since activist investor William Ackman purchased holdings in the company. Just last week Zoetis adopted a Shareholders Rights Plan which has been referred to as a 'poison pill' intended to protect existing shareholders.

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Dr. Melodie Chan to Deliver 2014 Leaders KeyNote

Leaders of the Urban Animal industry arrive at Summit 2014 during an interesting time.

The landscape is changing daily: Deconstruction or reconstruction of the industry supply chain is taking place; Consolidation of consumer purchasing power by big box retailers and large online portals challenges the role of the independent service provider; and, Disruption of communication channels by the internet has left traditional marketing elements in the dustbin of history.

More than ever before, the environment faced by leaders is volatile, uncertain, complex and ambiguous (VUCA). In addition, most current leaders are 'digital immigrants' surrounded by 'digital natives' they struggle to understand. The language, culture and customs now appearing in the workforce they lead and in the customer base they serve, often feels foreign to them. The need for leaders to constantly discern between danger and opportunity is great. 

As leaders contemplate their careers and the future of the organizations they lead, they can be paralyzed by fear and uncertainty or they can invent a future where they succeed. 

Melodie Chan, DVM, is Senior Manager Veterinary Services (Cattle/Equine/Genetics), for Zoetis. Dr. Chan will deliver the 2014 Leaders Keynote to Summit delegates. Melodie Chan first appeared on the Urban Animal radar screen in 2009 as a member of the CVMA Innovation Task Force along with Jean Gauvin, Chair and Larry Evans, Secretary. Jean Gauvin is currently the President of the Canadian Veterinary Medical Association. Summit 2014 is the first time all three innovator/futurists will be together since 2010. 

Summit 2014 delegates can expect to be inspired, energized and equipped to invent a successful future by Dr. Chan's address.

Register for this Keynote

Will Zoetis be gobbled up by Bayer?

Consolidation continues in the Pharmaceutical industry

A recent article in Bloomberg News argues the case for such an acquisition. 

Bloomberg places Zoetis No. 1 in the global animal-health business, with $4.56 billion in revenue last year. Bayer is in fifth place, with 1.31 billion euros in last year’s sales after Merck & Co. (MRK), Sanofi (SAN) and Eli Lilly.

Read the article