Zoetis Inc Q3 2024 Earnings Call Transcript

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

Question: Erin Wilson Wright - Morgan Stanley - Analyst : A 2-parter here. So first on Librela, how should we be thinking about the quarterly progression from here in terms of US Librela? And how has the experience been in terms of reorder rates and the months on therapy relative to your internal expectations? And then just how we should think about that quarterly progression given the stocking dynamics in the fourth quarter and into 2025? And then as we think about bigger picture here, just several moving pieces into 2020. in 2025 from a profit perspective, I guess you continue to invest in innovation, Librela scale, you have favorable mix also from MSA sale. Like how do you think about the level of investments that you need to make next year and sort of how much you're going to let sort of the enhanced product mix more skewed towards that companion animal actually flow through in terms of margin expansion next year as well. So how do you think about those headwinds and tailwinds, I guess, into 2025?

Question: Michael Ryskin - BofA Securities - Analyst : I want to follow up on a couple of points you touched on there. First, just in the quarter, thinking about Librela progression year-to-date. I know you had some destocking dynamics earlier in the year, just making sure for Librela for Trio for Derm, was there anything like that in the third quarter in terms of inventory management with customers, people stocking for year-end or maybe destocking any promotions, anything like that? I just want to make sure we're looking at "clean numbers here, especially some competing launches going on for some of these things. And then two, I want to touch a little bit on the MFA component. You updated the guide for that divestment for the fourth quarter as you touched on two months in the US, on OUS. How should we think about full year 2025 impact in terms of updating our numbers. I think it's roughly $350 million in annual revenues, but anything you can say in terms of how much SG&A spend, how much R&D spend falls into that just so we can start to true up our models for next year?

Question: Brandon Vazquez - William Blair & Company L.L.C. - Analyst : I want to focus on parasiticides and Simparica Trio. It's been really not a strong segment for you guys, especially Trio. Can you talk a little bit about despite more competition in the market why you guys seem to be taking care, perhaps it's something on the commercial side and maybe some of the execution you guys have there. So just any color there and how much that can continue into '25. And then a quick follow-up is just if there's any -- Wetteny, for you, if there's any price mix commentary you could give us on the quarter, especially in the companion animal side. .

Question: Jonathan Block - Stifel, Nicolaus & Company, Incorporated - Analyst : First one, are there any different marching orders for the sales force is US Librela now largely moves from, call it, new practice adoption to more driving utilization and getting into model to moderate. Maybe the tack on to that would be any specific thoughts about 4Q revenue from US Librela,

Question: David Westenberg - Piper Sandler & Co. - Analyst : Congrats on great quarter. A little bit touch on macro real quick. Just in terms of how you price relative to veterinary CPI? Is that ever a consideration and as we go into next year, do you also consider some of the clinic growth assumptions that we've seen Yes, you are isolated in a lot of ways because you can buy off channel. However, those initial scripts do need to come on visits, and we've seen visits for the last year being quite down. Now -- and then just a second on a clarification, Whitney, I think you said in your prepared remarks, a reasonable promotion environment or something along the lines of that. Can you clarify what you mean if you meant Zoetis an industry-wide -- and specifically, I'm thinking about some of the promotion environments, beginning of next year as we enter a parasiticide season. You'll have a full season of Quattro might be lapping some of the promotions from NexGuard Plus, I don't know anything like that. So if I could just get a clarity there.

Question: Balaji Prasad - Barclays Bank - Analyst : Two from me, 1 speaking a bit more about 2025. Could you comment about -- comment on the incremental growth drivers and headwinds, especially that you see. And Wetteny, especially as we think about OpEx, again, I don't want to get into guidance, but if you can just comment on the pushes and pulls towards your OpEx spend in the year. Secondly, with regard to Simparica Trio again, can you comment on what kind of move REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2024 / 1:30PM, ZTS.N - Q3 2024 Zoetis Inc Earnings Call -- in terms of the $5 million -- 57 million dogs that you have provided that could move to soils what's the pace of conversion that could be achieved on a real estate basis?

Question: Jonathan Block - Stifel, Nicolaus & Company, Incorporated - Analyst : Kristen, it sounds like the company is confident in its ability to take another year of above-average price increases. And I'm kind of curious like what's sort of given you that confidence and given the evolving competitive landscape and current macro climate? And then just a sort of part of REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2024 / 1:30PM, ZTS.N - Q3 2024 Zoetis Inc Earnings Call that, could you give us an update on what percentage of the companion business is flowing through alternate site versus the vet office and if that's having any impact on any sort of pricing or customer trends that we should be aware of?

Question: Navann Ty Dietschi - BNP Paribas Exane - Analyst : One on competition and 1 on innovation. So on competition, can you expand on which levers is what is using to defend Apoquel versus Anvia? Would that be -- or is about the safety at both near-term pricing or anything else. And for Credelio Cuatro, did you plan any promotions around that launch maybe to a lesser extent that when you were facing Nexa -- and then on innovation, are you able to discuss progress around the long-acting injectables, monoclonal antibodies and parasiticide and longer term innovation in CKD, oncology and cardiology?