Zoetis Inc at Morgan Stanley Global Healthcare Conference Transcript

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

Question: Erin Wright - Morgan Stanley - Analyst : Great. Thanks. That was very helpful. And I want to talk a little bit about your expectations for 2025 and especially as we head into 2026 as well. But I'll start with kind of operational revenue growth. You recently raised your target for 2025 by 25 bps to 6.5% to 8% growth in 2025. Can you outline some of those key assumptions across companion animal and livestock, and how do we think about the quarterly progression from here and what continues or not into 2026?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Okay, that's helpful. And then as we think about 2026 then, what continues in terms of -- as you think about kind of mid- to high single-digit long-term growth, you're always at that 3 point or so premium to sort of the market growth rate, 6% to 9% is sort of that long-term range, the 8% that you talked about. I guess, what would get you to deviate from that at all, I guess, into 2026?

Question: Erin Wright - Morgan Stanley - Analyst : And I know, Kristin, and you talked about, Wetteny, like in terms of the base business, but Kristin, you're highlighting the pipeline a lot. But can you talk a little bit about that base business and your expectations there? Because presumably, some of the strength is about leveraging your size and your scale and your ability to bundle across the portfolio and those customer relationships that are strong and that are durable. Can you talk a little bit about how you're thinking about addressing that even more kind of going forward? Or what can you do on that front to accelerate the base business as well?

Question: Erin Wright - Morgan Stanley - Analyst : In terms of the alternative channels in retail, that helps to have different growth than what we're seeing in terms of the vet office visit trends you're less levered to that metric in terms of who's walking in the front door. That said, what are you seeing, though, right now in terms of veterinary office business? At some point, you do want them to actually go to the vet, right? But at the same time, you're able to leverage this alternative channel to bridge to growth in the meantime. But what are seeing in terms of current fundamentals? I know you look at a little bit different data than like that sort of data for instance.

Question: Erin Wright - Morgan Stanley - Analyst : Would you ever take a more direct-to-consumer approach similar to like the conversations for Lilly and others on the human pharma side? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 08, 2025 / 5:05PM, ZTS.N - Zoetis Inc at Morgan Stanley Global Healthcare Conference

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Great. I want to switch gears to Librela. So obviously, this is something that's evolving in terms of this we measured launch or ramp for Librela, especially in the US, but also internationally to some extent. I guess, give us the latest in terms of Librela, in terms of the feedback that you're getting from customers, how is that improving? How are you navigating some of the conversations with both clinicians and pet owners on that front? And how should we think about, I guess, the quarterly cadence from here?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Great. And when do you think we would have this sort of data readout from the Phase 4 studies?

Question: Erin Wright - Morgan Stanley - Analyst : Great. And then how do you think about the long-acting fitting into your strategy now from a pain perspective? Will this help to fill in some of the void from Librela? Will it be purely additive? And how do you think that this will be -- they are different, ultimately different products that are going to be launched put in the same category? And how do you expect to kind of navigate that as well as addressing some of the, I guess, strategy around your launch process with Librela, the lessons you've learned there?

Question: Erin Wright - Morgan Stanley - Analyst : Given the launch process that you expect in the long-acting, do you anticipate that this will be a material contributor from a financial perspective in 2026, assuming it launches in that timeline?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And let's switch gears to parasiticide. So Simparica Trio has been knocking it out of the park in terms of strength across that segment. Where do you stand now in terms of market share? Can you talk a little bit about the competitive landscape, reorder rates, what you're seeing in terms of engagement across corporates and otherwise and just an update on Simparica Trio?

Question: Erin Wright - Morgan Stanley - Analyst : And it's a pretty brand-loyal category, right? I guess, do you have any metrics around that in terms of retention across this category typically?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And then what about what's next in parasiticides? Can you talk a little bit about injectable products, long-acting injectable products, and how that kind of fits into your strategy as well?

Question: Erin Wright - Morgan Stanley - Analyst : I think you did mention, though, that new canine parasiticides will be in the next two years but not necessarily injectable. Is that the case? And then within five years, you should have long-acting parasiticides that still roughly the timeline?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Got it. And then do you think you'll be first to market in a long-acting combination in the US market for parasiticide?

Question: Erin Wright - Morgan Stanley - Analyst : Okay. And then let's go to atopic dermatitis or your derm category, you anticipated competition coming. Obviously, some of that's played out, some of it's not relative to your expectations. Can you talk about a new entrant coming in, how you're anticipating to navigate that? What's your approach to the market, what's your go-to-market strategy and what you have embedded in terms of competition in your guidance? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 08, 2025 / 5:05PM, ZTS.N - Zoetis Inc at Morgan Stanley Global Healthcare Conference

Question: Erin Wright - Morgan Stanley - Analyst : And can you talk about your relationship with distributors there? Can you get in front of some of the competitive dynamics that are at play. Can you better leverage the chewable version, switch people to Cytopoint, or leverage those distribution relationships where you can in terms of like minimum revenue or volume commitments on that front?

Question: Erin Wright - Morgan Stanley - Analyst : And what about Cytopoint long-acting, what's the latest in terms of timeline on that front?

Question: Erin Wright - Morgan Stanley - Analyst : Okay, okay. Renal oncology, what's next in the pipeline. What are you most excited about? What I think CKD is the one that's near term of the two, probably. Can you give us an update there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 08, 2025 / 5:05PM, ZTS.N - Zoetis Inc at Morgan Stanley Global Healthcare Conference I think you -- previously, it was a multibillion dollar kind of opportunity for you. But can you talk about the strategy, what you're focused on? And then which one you're more excited about in terms of CKD versus oncology?

Question: Erin Wright - Morgan Stanley - Analyst : Yeah. No, in oncology, there were definitely prior iterations of B-cell T-cell lymphoma in monoclonal antibodies. I would think that there's opportunities there, especially with the expanding diagnostics alongside that, whether it's pure diagnostics or other diagnostics as well, canine lymphoma being a big area. I mean, is that a key area of focus for you? And then also just on the diagnostics front and so on that, is that also an innovation driver for you going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 08, 2025 / 5:05PM, ZTS.N - Zoetis Inc at Morgan Stanley Global Healthcare Conference

Question: Erin Wright - Morgan Stanley - Analyst : Okay. Great. and your business mix has evolved dramatically even since the IPO with a greater proportion of your total revenue associated with higher margin, faster growing companion animal products. Can you talk a little bit about that margin flow through? How you see that playing out, your long-term margin targets and what you're anticipating kind of heading into 2026, what can ultimately kind of drop through? I think we've all wanted to see maybe a little bit more of that drop through. But at the same time, you're investing and you're investing in growth rate and growth opportunities. So how do you balance that? And how do you think about margin expansion longer term?

Question: Erin Wright - Morgan Stanley - Analyst : And any update on like tariff exposure?