Zoetis Inc Q4 2024 Earnings Call Summary

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

Question: Michael Ryskin - BofA Securities - Analyst : I've got two related ones. I'll sneak them in together. So first, Wetteny in your prepared remarks, you sort of said you have a range of assumptions for new market entrants and market conditions in the guide. I want to dive into that. There's a lot of competition in the market this year that you already have one on the market for derm. There's a second major Apoquel competitor expected this summer. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 1:30PM, ZTS.N - Q4 2024 Zoetis Inc Earnings Call So explicitly, could you sort of walk us through what you're factoring into the guide? Whether it's in terms of color for growth for those products? You kind of gave some broad comments on growth expectations, but also just sort of incremental headwinds from competition and how that could play out? And then tied to that, I guess, are you taking on any incremental investments to support your major brands, derm, combo in terms of go-to-market strategy, commercial efforts, maybe in terms of bundling products together, alternative channels? Just sort of how are you adjusting that in the face of some of that growing competition?

Question: Erin Wilson Wright - Morgan Stanley - Analyst : I want to dig a little bit more into Librela. Just can you speak to how bets are responding following the and label change? Like has that helped them in terms of understanding kind of how to prescribe? And you mentioned it's not linear, but how do we think about US Librela contributions in terms of what's embedded in the guide for 2025? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 1:30PM, ZTS.N - Q4 2024 Zoetis Inc Earnings Call And just to confirm, the long-acting and other pipeline products are not embedded in your guidance for this year? And then just the last one, just on the margin improvement year-to-year in 2025. Can you talk a little bit about what's driving that in terms of the mix shift with the MFA divestiture or anything else to call out?

Question: Jonathan Block - Stifel, Nicolaus & Company, Incorporated - Analyst : Just Wetteny, any thoughts on the revenue cadence for 2025? Arguably competition will pick up in some key areas. You called it out, that's more back part of the year. You got arguably an easy comp in the fourth quarter. So curious on the cadence. And then, just for R&D, flat year-over-year, you walked through some of that. Is this sort of a new beginning for you guys where this can be considered a more leverageable, call it, line item going forward?

Question: Balaji Prasad - Barclays Bank - Analyst : A couple of questions for me. Firstly, Wetteny clarified that none of the expected approvals within the next 12 months have been factored into the guidance. Curious to understand, maybe excluding FX, what are the upside risk to guidance that you can see from here? And on the same line of the three buckets of approvals on drivers, as you can describe that for -- is there any way to quantify the approval though in the second bucket in the 12 to 36 months, what the TAM for these approvals are and what are the investments into this?

Question: Christopher Schott - JPMorgan Chase & Co. - Analyst : Just two for me. First on Librela. Is there any updates in terms of how you're seeing veterinarians approach patient selection as think about severe patients versus moderate? Is it still skewed more towards severe? Are you starting to make progress on the moderate side? And the second question was on Simparica Trio, obviously, very healthy growth in 2024. Just any pushes and pulls we should think about for that product specifically in '25? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 13, 2025 / 1:30PM, ZTS.N - Q4 2024 Zoetis Inc Earnings Call

Question: Glen Santangelo - Jefferies LLC - Analyst : I just wanted to follow up on some of the comments you made with respect to the organic growth. If you look at the sort of pricing expectation you're building into your assumption this year. I think you said it would be better than your 2% to 3% normalized expectation. So with sort of half of the operational growth coming from pricing, it seems like you're assuming some modest slowdown on the volume side, just sort of given that you expect significant double-digit growth in your three major franchises. I guess maybe talk about if either you or Kristin can talk about maybe some of the other areas of the portfolio where you may be seeing some levels of deceleration in volume and maybe that's just some level of conservatism you're building into your guidance?

Question: Navann Ty Dietschi - BNP Paribas Exane - Analyst : I have two questions, please. The first one on Librela, if you -- can you discuss any expected impact of the US label changes, if any, on the transition to the moderate population in the US? And then my second question is on innovation. If you can comment on the blockbuster potential of the expected approvals that you have listed?

Question: Andrea Alfonso - UBS Investment Bank - Analyst : I specifically wanted to ask about the dermatology franchise and how you're thinking about your positioning in 2025 from a pricing versus mix standpoint in light of competitive entries? And have you had to amplify some of your education and awareness efforts around efficacy relatively? And then I guess finally, what's sort of your view on kind of the mix shift between Cytopoint and Apoquel?

Question: Daniel Clark - Leerink Partners - Analyst : Just wanted to drill down a little bit on your the 50% of puppies are on triple combo parasiticide. What are the different pushes and pulls that you think could maybe drive that number higher? And how are you thinking about that for 2025?