Zoetis to sell some animal health brands, manufacturing unit

Indian drug company Zydus Cadila will acquire select animal health brands and a manufacturing unit from Zoetis Inc., according to reports. One news outlet reported the deal at $29 million.
Zydus says the acquisition will help the company gain access to a wide range of nutrition and therapeutic products.
'We believe that this strategic acquisition will strengthen our portfolio of brands and add new dimensions to our growth in the animal health business. We see this as an opportunity to catapult our business to higher levels of excellence,' Zydus Cadila Chairman and Managing Director Pankaj R. Patel said.
Last month, Zoetis reported that it had sold three facilities in North Carolina, Colorado and Arkansas to Huvepharma in a deal valued at $40 million.
In November 2015, Zoetis held a ribbon-cutting ceremony to celebrate the completion of its new global production and supply facility in Suzhou, China.
In July 2015, Zoetis agreed to acquire KL Products to strengthen its automation technology for poultry hatchery operations. The privately held company headquartered in London, Ontario, Canada, is a leader in automation systems for the poultry industry.
And in May 2015, Zoetis reported flat revenue in the first quarter of 2015, and announced a comprehensive operational efficiency initiative to enhance its long-term competitive position and profitability, which includes slashing $300 million in annual costs by 2017 and cutting at least 20 percent of its workforce.

Zoetis buys KL Products, boosting poultry health service

Zoetishas agreed to acquire KL Products to strengthen its automation technology for poultry hatchery operations. The privately held company headquartered in London, Ontario, Canada, is a leader in automation systems for the poultry industry. Terms of the transaction were not disclosed.
The acquisition enables Zoetis to provide poultry industry customers with full automation solutions for hatchery operations, complementing Zoetis’ category leading Embrex in ovo vaccine delivery systems.
“In the highly integrated global poultry industry, hatcheries are seeking ways to provide healthy, vaccinated chicks while increasing operational efficiencies,” said Steven Clarken, vice president and general manager, Global BioDevices at Zoetis. “This allows Zoetis to deliver tailored solutions that tightly integrate use of our Embrex BioDevice technology for efficacious and efficient in ovo vaccination with broader automation technology across hatchery operations. It exemplifies our commitment to be the preferred animal health partner to the poultry industry.”
Zoetis has mastered the science of in ovo vaccination in the poultry industry for more than two decades with its Embrex BioDevice technology.  The technology helps assure reliable, safe and effective vaccine delivery to every embryo.
“KL Products’ portfolio and capabilities complement Zoetis’ offerings and allow Zoetis to fulfill  poultry customers’ animal health needs, while providing increased efficiency across virtually every aspect of hatchery operations,” said KL Products President Patrick Poulin who will join Zoetis as director, Automation Solutions.
“The transaction is aligned with our value creation strategy to invest in complementary areas and technologies,” said Zoetis Group President Alejandro Bernal, who oversees the company’s Strategy, Commercial and Business Development organization and the Global BioDevices business. “Zoetis, with its scale, industry-leading poultry field force, skilled technical support team and global presence, is uniquely positioned to rapidly expand both the reach and penetration of these leading poultry technology platforms.”

Zoetis to cut jobs, costs after flat earnings report

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  Zoetis

  Zoetis reported flat revenue in the first quarter of 2015, and said it would slash its workforce by 20 percent.

  From WATTAgNet:
  Zoetis reported flat revenue in the first quarter of 2015, and announced a comprehensive operational efficiency initiative to enhance its long-term competitive position and profitability, which includes slashing $300 million in annual costs by 2017 and cutting at least 20 percent of its workforce.
  The company reported revenue of $1.1 billion for the first quarter of 2015, which was flat compared with the first quarter of 2014.
  Net income for the first quarter of 2015 was $165 million, or $0.33 per diluted share, an increase of 6 percent compared with the first quarter of 2014. Adjusted net income for the first quarter of 2015 was $207 million, or $0.41 per diluted share, an increase of 8 percent. Adjusted net income for the first quarter of 2015 excludes the net impact of $42 million, or $0.08 per diluted share, for purchase accounting adjustments, acquisition-related costs and certain significant items. On an operational basis, adjusted net income for the first quarter of 2015 increased 14 percent, with foreign currency having a negative impact of 6 percentage points.
  Zoetis said it would close 10 manufacturing plants, eliminate layers of management and abandon 300 of its product lines that aren’t performing well. However, the company said it would not cut back on its sales force or large U.S. plants.
  Plans include reducing its geographical divisions from four to two and cutting 2,500 jobs.

Zoetis net income up 20 percent in fourth quarter

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  Zoetis

  Zoetis has reported an increase in net income for the fourth quarter of fiscal year 2014 and for the full year.

  From WATTAgNet:
  Zoetis reported its net income for the fourth quarter of 2014 was $126 million, an increase of 20 percent when compared to the fourth quarter of 2013. Adjusted net income for the fourth quarter of 2014 was $203 million.
  On an operational basis, Zoetis’ adjusted net income for the fourth quarter of 2014 increased 12 percent, with foreign currency having a positive impact of 1 percentage point. In the fourth quarter, the company benefited from a lower than expected tax rate primarily due to the resolution of prior tax matters and the extension of the research and development tax credit; operational, adjusted pre-tax earnings for the fourth quarter declined 1 percent.
  For full year 2014, the company reported a net income $583 million, an increase of 16 percent when compared to the full year 2013. Adjusted net income for the full year 2014 was $790 million, an increase of 11 percent when compared to the adjusted full year 2013. Adjusted net income for the full year 2014 excludes the net impact of $207 million for purchase accounting adjustments, acquisition-related costs and certain significant items.
  On an operational basis, Zoetis’ adjusted net income for the full year 2014 increased 13 percent, with foreign currency having a negative impact of 2 percentage points.
  “We completed a very successful year in 2014 as we continue to create value for shareholders, delivering operational growth of 7 percent in revenue and 13 percent in adjusted net income for the full year,” said Zoetis CEO Juan Ramón Alaix. “We generated growth across all four of our regional segments for the year based on our market-leading franchises and the continued adoption of our newer products. Our 9 percent operational growth in our livestock products for the year demonstrated very favorable market conditions for meat and dairy producers, and the value our premium medicines and vaccines bring to protecting animals and improving productivity.”

Zoetis announces $500 million share repurchase program

Zoetis' board of directors has authorized a $500 million share repurchase program as part of its capital allocation plans.
The shares are expected to be repurchased at the discretion of management, depending on market conditions and business needs. The authorization allows for repurchases to be conducted through open market or privately negotiated transactions or otherwise. The announcement was made in conjunction with Zoetis Inc.’s Investor Day on November 18, 2014.
“A share repurchase program is an important tool for managing our allocation of capital, and it gives us additional flexibility to return capital to shareholders when it is not needed in the business,” said Paul Herendeen, executive vice president and chief financial officer, Zoetis. “We remain focused on investing capital internally to help grow the business, completing complementary business development activities that can generate additional value, and returning capital to shareholders as part of our total value proposition.”


Innovations driving growth
Dr. Alejandro Bernal, executive vice president and area president, Europe, Africa and Middle East region, cited the example of Poulvac E. coli vaccine as an example of how the company is responding quickly to regional market needs. Introduced into the poultry market in France in 2012, Poulvac had attained 46 percent market share in layers and breeders in France by the third quarter of 2014.
Dr. Catherine Knupp, executive vice president and president of research and development, Zoetis, said customer needs are what drive product development. She cited the example of the development of a porcine epidemic diarrhea (PED) virus vaccine for the U.S. swine market to show how responsive the company can be. First identified in the U.S. in April 2013, Zoetis was able to develop a vaccine and gain a conditional license for its use on September 2, 2014, just 14 months after the virus isolates were obtained by Zoetis. Knupp reported that the company continues to work to find solutions for PED virus in other countries.

Zoetis revenue increases 10 percent during third quarter

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  Zoetis

  Zoetis reported a 10 percent increase in revenue during the third quarter of 2014.

  From WATTAgNet:
  Zoetis on November 4 reported revenue of $1.2 billion for the third quarter of 2014, an increase of 10 percent from the third quarter of 2013. Revenue reflected an operational  increase of 10 percent, with foreign currency having no material impact on revenue growth this quarter.
  
  Net income for the third quarter of 2014 was $166 million, an increase of 27 percent, compared to the third quarter of 2013.
  
  “This quarter’s performance was driven largely by 13 percent operational revenue growth in our livestock products and continued discipline around our operating expenses,” said Zoetis Chief Executive Officer Juan Ramón Alaix.
  
  Zoetis organizes and manages its business across four regional operating segments: the United States (U.S.); Europe/Africa/Middle East (EuAfME); Canada/Latin America (CLAR); and Asia/Pacific (APAC). In each of those regional segments, the company experienced a revenue increase during the third quarter of 2014.
  
  Revenue in the U.S. was $532 million, an increase of 7 percent.  Revenue in EuAfME was $293 million, an increase of 12 percent operationally. Revenue in CLAR was $194 million, an increase of 17 percent, and revenue in APEC increased 7 percent operationally to $179 million.
  
  “All of our geographical segments benefited from the strong sales of livestock products in the quarter. We saw an increase in the use of our premium cattle products in key markets, as well as continued acceptance of new products in our swine and poultry portfolios," said Alaix. 

Zoetis revenue for fourth quarter of 2013 increases 7 percent

Zoetis' financial results for the fourth quarter and full year 2013 have been reported, with the company recording a revenue of $1.25 billion for the fourth quarter of 2013, an increase of 7 percent from the fourth quarter of 2012. Revenue reflected an operational increase of 9 percent with foreign currency having a negative impact of 2 percentage points.
Net income for the fourth quarter of 2013 was $105 million, or $0.21 per diluted share. Adjusted net income for the fourth quarter of 2013 was $180 million, or $0.36 per diluted share. Adjusted net income for the fourth quarter of 2013 excludes the net impact of $75 million, or $0.15 per diluted share, for purchase accounting adjustments, acquisition-related costs and certain significant items.
For full year 2013, the Zoetis revenue reached $4.56 billion, an increase of 5 percent from the full year 2012. Revenue reflected an operational increase of 7 percent, with foreign currency having a negative impact of 2 percentage points.
Net income for Zoetis for the full year 2013 was $504 million, or $1.01 per diluted share, an increase of 16 percent compared to the full year 2012. Adjusted net income for the full year 2013 was $709 million, or $1.42 per diluted share, an increase of 32 percent and 31 percent, respectively, compared to the adjusted full year 2012. Adjusted net income for the full year 2013 excludes the net impact of $205 million, or $0.41 per diluted share, for purchase accounting adjustments, acquisition-related costs and certain significant items.
Executive commentary
"In 2013, we successfully established ourselves as a new public company, delivered on our financial objectives, and continued meeting our customer commitments," said Zoetis CEO Juan Ramón Alaix. "Our performance in 2013, together with our guidance for 2014, confirms our long-term objective to grow revenue in line with, or faster than, the market; to grow adjusted net income faster than revenue; and to bring additional value to our customers, colleagues and shareholders."
"We continue to expand our diverse portfolio, receiving approvals and bringing important new products to our customers, such as Apoquel for veterinarians in the U.S., European Union and New Zealand," said Alaix. "We have maintained a reliable, high-quality supply of products around the world, while managing our separation from Pfizer. We also continue to achieve important milestones in standing up our company and achieving our growth strategies. I am very proud of the people of Zoetis for their dedication to our customers and for building on our legacy as the world leader in animal health."
"I am very pleased with our financial performance in our first year operating as a public company and with the progress we have made in building our infrastructure," said Rick Passov, executive vice president and chief financial officer of Zoetis.
Quarterly highlights
Zoetis organizes and manages its business across four regional operating segments: the United States (U.S.); Europe/Africa/Middle East (EuAfME); Canada/Latin America (CLAR); and Asia/Pacific (APAC). Within each of these regional segments, the company delivers a diverse portfolio of products for livestock and companion animals tailored to local trends and customer needs.
In the fourth quarter of 2013:

• Revenue in the U.S. was $516 million, an increase of 7 percent over the fourth quarter of 2012. Sales of livestock products grew 8 percent, with contributions across cattle, swine and poultry. Cattle products showed a significant increase during the quarter based on improved market conditions. Meanwhile, swine and poultry products benefited from continued growth in new products. Sales of companion animal products grew 5 percent.
• Revenue in EuAfME was $330 million, an increase of 9 percent operationally over the fourth quarter of 2012. Sales of livestock products grew 9 percent operationally, driven primarily by sales of swine and poultry products, particularly in Germany and Russia. Sales of companion animal products grew 9 percent operationally, and benefited again this quarter from increased sales associated with third-party manufacturing agreements. Excluding these sales, companion animal product sales grew 5 percent operationally.
• Revenue in CLAR was $223 million, an increase of 8 percent operationally over the fourth quarter of 2012. Sales of livestock products grew 7 percent operationally, driven largely by cattle product sales in Brazil. Poultry sales increased primarily due to medicated feed additives in Brazil and southern Latin America, and swine products grew due to sales of immunization products, anti-infectives and medicated feed additives in the region. Sales of companion animal products grew 14 percent operationally, largely due to increased sales in Canada and Brazil.
• Revenue in APAC was $185 million, an increase of 14 percent operationally over the fourth quarter of 2012. Sales of livestock products grew 16 percent operationally, driven primarily by swine, poultry and cattle products in India, Japan and China. Sales of companion animal products grew 8 percent operationally, tempered by a decline in equine products. Companion animal product growth was led by Japan based on continued acceptance of recently launched products.
Zoetis continues to drive demand and strengthen its diverse portfolio of products through brand lifecycle management, strong customer relationships and access to new markets and technologies. The company is focused on improving the performance and delivery of its current product lines; expanding product indications across species; and pursuing approvals across new geographies. Some recent highlights include:

• Expanding the portfolio's reach - Zoetis continues to receive approvals that help expand its key products into new markets or with new formulations. In swine products, for example, the Fostera PRRS vaccine received approvals in Korea, Thailand and Mexico in the fourth quarter, and is now available in six markets after being introduced in 2012. Fostera PRRS aids in the prevention of respiratory disease associated with porcine reproductive and respiratory syndrome (PRRS) virus that could compromise herd health and performance. In poultry products, the company's Poulvac line of vaccines continue to receive approvals in markets across Latin America and Europe; these vaccines help combat many common diseases, including Marek's disease, Newcastle disease, Salmonella, Infectious Bronchitis and Infectious Bursal Disease.
• Continuous innovation - Zoetis continues to advance animal health science through innovations that address unmet market needs or improve veterinarians' approach to treatment. In the fourth quarter, the company received U.S. regulatory approval for Fostera PCV MH, a new combination vaccine for swine, which is the first vaccine to offer one-bottle, one-dose convenience with the flexibility of two-dose administration. Apoquel (oclacitinib tablet) successfully completed its early experience program in the U.S. in the fourth quarter, and fully launched in the U.S., UK, Austria and Germany in January; other market launches will follow. Apoquel is approved for the control of pruritus associated with allergic dermatitis and the control of atopic dermatitis in dogs at least 12 months of age.
• Focus on emerging diseases - Zoetis also uses its research and development expertise to address emerging diseases. The company recently announced a research partnership with Iowa State University (ISU) to identify and test a vaccine candidate to help control porcine epidemic diarrhea virus (PEDV) in the United States. Zoetis also announced recently it was first to market in the U.S. with GA08, a conditionally licensed vaccine for an infectious bronchitis virus in poultry.
Financial guidance and commentary
Zoetis's guidance for full-year 2014 reflects the company's confidence in the diversity of its portfolio, the strength of its business model, and its view of the evolving market conditions for animal health products this year.
Zoetis provided its financial guidance for full year 2014, reflecting foreign exchange rates for late January:

• Revenue of between $4.65 billion to $4.75 billion
• Reported diluted EPS for the full year of between $1.15 to $1.21 per share
• Adjusted diluted EPS for the full year between $1.48 to $1.54 per share

Zoetis reports revenue increase in third quarter of 2013

Zoetis reported on November 5 an 8 percent increase in revenue for its third quarter, and a 19 percent decrease in net income when compared to the third quarter of 2012. Zoetis, the former animal health business of Pfizer, completed its third quarter since its formation.
Net income for the third quarter of 2013 was $131 million, a decrease of 19 percent, compared to the third quarter of 2012. Adjusted net income for the third quarter of 2013 was $172 million, an increase of 12 percent and 10 percent, respectively, compared to the adjusted third quarter of 2012. Adjusted net income for the third quarter of 2013 excludes the net impact of $41 million for purchase accounting adjustments, acquisition-related costs and certain significant items.
"With three quarters now reported in our first year, I am pleased with how we are meeting our commitments to customers, delivering financial results and setting a solid foundation for our future," said Zoetis Chief Executive Officer Juan Ramón Alaix. "We continue to build on the commercial performance, innovative research and development, and reliable supply chain that have been critical to our success, while managing through all the changes that come with standing up a new company."
"This quarter, our diverse portfolio of products was once again a key factor in delivering revenue growth across all of our regions, while our scope and scale helped us grow our adjusted earnings faster than sales. We saw significant growth in the U.S., our largest market, which reflects strong sales in both companion animal and livestock products. And, as expected, the growth in U.S. livestock products reflects the impact of drought conditions that were experienced in the year-ago quarter. We also saw balanced performance across our other regions based on continued market acceptance of new products, growth in emerging markets, and steady performance of our core product lines."