Zoetis Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Erin Wright - Morgan Stanley - Analyst : Great. Thanks. So first, I'll do Librela first and then on tariffs. I guess, can you speak to what you're seeing across the US market in terms of the Librela label change, how vets are responding relative to bigger expectations there? And how do you think the longer-acting OA Pain products could potentially replace or enhance sort of the OA Pain offering as we head into potentially next year? And then on tariffs, can you describe what exactly is embedded in terms of the gross tariff impact and what mitigation efforts you have? And then what does it mean when you say enacted tariffs? I guess, what tariffs or jurisdictions are you incorporating or product categories do you -- where do you have, I guess, the most exposure and what sort of is the tariff impact now embedded in guidance? Thanks.

Question: Michael Ryskin - BofA Global Research - Analyst : Great. Thanks for taking the question, guys. I'll start on the competitive side of things. I think Wetteny and Kristin, you guys both called out competitive entrance a little bit more in your prepared remarks. Obviously, you've got -- had NexGard PLUS in the market for a while now and also Credelio Quattro and Librela. Just if you could dive into a little bit more of like where are you seeing the most competitive pressure, how is it taking shape?

Question: Jon Block - Stifel Nicolaus and Company, Incorporated - Analyst : Great. Thanks, guys. Maybe just building on a couple of the prior questions. Let me just -- pretty straightforward, but can you just maybe help us and bridge us to the $0.20 increase to the 2025 EPS guidance because just obviously back of the envelope, but even with the advantageous REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 12:30PM, ZTS.N - Q1 2025 Zoetis Inc Earnings Call movement FX, the lower interest expense, and the lower shares, I'm actually having a hard time getting to $0.20. And that's arguably before any tariff headwind. I don't know if you can give us like a gross, or net tariff impact on that side of the equation. And then Kristin, I guess it's a little bit more in Librela. Pretty direct question, do we assume or should we assume flat US Librela revenue for the next two to three quarters until the long-acting is out there? I think the target's year-end '25, give or take. Is there anything called in the near term to reaccelerate the US Librela revenues before the long-acting? And then I know you just gave some helpful information on the long-acting. Is that going to carry, call it, a different brand versus Librela? Thanks, guys.

Question: David Westenberg - Piper Sandler Companies - Analyst : Thanks. I'm going to actually get away from the Librela questions. So Amazon is now selling some of the online drugs, probably, I think it's just singles right now, but maybe get a broad spectrum. Can you talk about any changes in your sales or sales and marketing efforts, both in the terms

Question: Brandon Vazquez - William Blair & Company - Analyst : Hey, everyone, thanks for taking the question. Kristin, you made a comment on the Librela side that maybe consumer sentiment or consumer spending was weighing a little bit, maybe on compliance. Can you just talk a little bit about what you guys are seeing through April, given kind of consumer sentiments rolling over a little bit, not just in Librela, but just the broader portfolio? Are you seeing meaningful changes in compliance across the board or not? And just kind of the feeling as we're going through the second quarter. And then one quick model follow-up question. Wetteny, can you just talk about what price and volume expectations are for the rest of the year as well? Thanks.

Question: Chris Schott - JPMorgan - Analyst : Great. Thanks so much for the questions. Maybe just starting off on derm, can you just remind us of your latest expectations for Merck's entrance into the market? What's kind of reflected in guidance on that? And maybe bigger picture on Apoquel, what percent of the market is Chewable at this point? And how important is that, I guess, in terms of kind of protecting the franchise competitively? My second question, obviously, a very solid start to the year. I know you don't give quarterly guidance, but just anything notable we should be watching in terms of quarterly [gating] as we think about the rest of the year from here? Thanks so much.

Question: Navann Ty - BNP Paribas Exane - Analyst : Thanks for taking my question. One on Librela, do you expect to pivot back to accessing the moderate population in the US at some point? And a follow-up on the FDA, could you expect the FDA head count reduction to impact your competitors' timeline in derm? And finally, can you discuss the new flea tapeworm indication for Simparica Trio versus Elanco's Credelio Quattro? Thank you.

Question: Daniel Clark - Leerink Partners - Analyst : Great. Thank you. Just another question on Librela. When you think about how the launches progress versus your initial expectations, is it really on the patient start side or on the months on therapy side that you've seen like a bigger divergence from where you thought performance was going to be? That's my question. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 06, 2025 / 12:30PM, ZTS.N - Q1 2025 Zoetis Inc Earnings Call