Zoetis Inc Q3 2025 Earnings Call Transcript

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

Question: Erin Wright - Morgan Stanley - Analyst : Great. So first, I just wanted to know kind of what meaningfully changed for you kind of on an intra-quarter basis after you raised guidance last quarter? And what were some of the key surprises that you saw, whether it's competition or destock or otherwise. But also on competition, just you mentioned some of the competitive dynamics in dermatology. I'm just curious how you're seeing practices at this point, how they're looking at the category? Are they carrying both JAK inhibitors in some of those certain international markets that you were talking about? And what do you have embedded now in terms of competition? Like do you think that guidance is conservative enough at this point? And should we anticipate a continuing impact as we head into 2026. How does that fit into your typical 6% to 8% top line growth guidance that you would typically give as we head into next

Question: Michael Ryskin - Bofa Merrill Lynch Asset Holdings Inc - Analyst : I want to stick on that topic of what's changed. I mean I hear your answer with me on some of the macro and some of the vet dynamics. I think the pushback I have is that we've seen that be a challenge in the end market for several years now. I think I mean it's 2022 and 2023, where they really started being the case. And Zoetis has really consistently been able to put up better numbers than that in companion in the US really through the second quarter, surprisingly strong. We've heard you guys speak a thousand times about how you're insulated from some of those vet challenges about the importance of medication, about some of the alternate channels that you're able to build to and all of that has been able to sustain that growth. So it really is a pretty striking change in the companion outlook in the US and globally, sort of what we've seen over the last couple of years versus 3Q. So I was just wondering the timing with competition coming on you mentioned some of that, but that could be playing a bigger role because that would indicate a little last longer. Just wondering if you could maybe dive in some of those changes a little bit more. And then as a follow-up, you alluded to some of the intra-quarter dynamics being short living by the end of the quarter, seeing better trends. Just anything you could say on distributor levels inventory levels among some of your customers. Can you just sort of thought on that as you look to the fourth quarter and again into next year. 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, 2025 / 1:30PM, ZTS.N - Q3 2025 Zoetis Inc Earnings Call

Question: Brandon Vazquez - William Blair Capital Partners - Analyst : I wanted to switch a little bit and talk about the new long-acting OA drugs that have been approved or are upcoming. The question being -- but clearly, Librela has launched didn't go as planned. I think the safety and efficacy stands behind it, but social media kind of got a little bit ahead of the drug and impacted its adoption as we're seeing, what have you guys learned what's going to change as you launch these new long-acting OA drugs because a successful launch of these into 2026 feels like it could be one of the key levers to remain within that 6% to 8% organic growth that you guys have talked about for a long time. Just curious on thoughts on what that launch might look like relative to what Librela was? And what gives you the confidence that can kind of have a more successful ramp from there.

Question: Christopher Schott - JPMorgan Chase & Co - Analyst : I'm just still trying to get my hands around what happened with US Derm this quarter. I know you've talked a lot about the comps and macro. But can you just elaborate a little bit more in terms of what we're seeing either with Zenrelia or positioning ahead of a potential Merck launch, it just seems like we saw quite a trend break this quarter relative to the past year. I was trying to get a little bit more color there. And just as a follow-up, on the therapeutic visit side, it sounds like from your commentary that we need to see some of these visit trends improved to get new starts in the right place, et cetera. Can you just elaborate a little bit more in terms of what your outlook of when we could see that recovery or more just qualitatively, what it's going to take to get these to recover again?

Question: Navann Ty - Exane Bnp Paribas - Analyst : One on the derm portfolio, if you could quantify maybe how much is due to distributor inventory dynamics versus the competitive pressure from Zenrelia and Numelvy in Europe. And also on Librela, when do you see signs of stabilization? And what are the drivers of that in your view?

Question: Andrea Alfonso - UBS AG - Analyst : I wanted to just probe a little bit more on the Simparica Trio franchise in the US in the quarter outside of the tough comp. I guess, I would be curious if you could provide any color on the actual dosage share and debt clinics particularly among new puppies, did you retain or seed some share? And also curious if you could speak to maybe some of the pricing spreads versus the competitors? Have they narrowed some of those new launches. And then separately, but sort of the same topic is in one of your slides in the investor deck, there was some mention of new canine parasiticides and the innovation road map slide. just curious at all, if you can comment, are those simply long-acting, maybe any new efficacy and breadth that you expect to roll out there?