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Let's switch gears here and talk about bird flu because Zoettas has been granted a conditional license from the USDA for its avian flu vaccine. Since February twenty twenty two, more than one hundred and fifty million birds have been affected in the US, causing egg prices to surge to all time highs. Joining us now is the CEO of Zoettis, Kristen pak Christen, It's great to see you in studio.
First of all, Oh, it's very nice to be back in studio with you all.
So let's talk about your vaccine. When might we expect to see it roll out and how quickly would you expect that to actually show up in the price of eggs?
Sure, I mean what I want to start with is just really that my heart goes out to all these you know, producers, you know, both for boilers and egg layers. You know, they've been on the front lines at this crisis for a while now, and they've been doing everything they can, through biosecurity and many other strategies to try to control this, and Zoettas has been standing by and supporting them. As we think about bio security as well as diagnostics you know on farm with them align with
our purpose. So we were thrilled to get the conditional license of our AI the product for poultry specifically, And just to be clear, this is a conditional license that is up to regulatory authorities in partnership with producers to decide how and when to use, So the sole decision on the use of the vaccine is up to the US authorities.
Interesting, and I'm curious, you know what this means for your business because, as we've spoken about before, you're more heavily weighted to pets towards animals that we have in our houses versus livestock. So with that in mind, I mean, depending on the uptake, what could this mean for zoetas you.
Know for starters. But I think this is a great example is what you and I spoke about at JP Morgan just a few weeks ago, which is the strength of our innovation pipeline across species. Well, we're expecting, you know, a major approval every year for the next few years, many of which will really be blockbusters in important categories and animal health such as chronic kidney disease, on cology, cardiology, you know, and antibiotic alternatives for life stuck, et cetera.
So we're really excited about that pipeline. We think this is a great demonstration of that.
I don't want to get too far away from the AV and flu. We spoke with the NEC director Kevin Hassett about what's happened recently.
Listen to what he had to say.
What are we going to do about the fact that Joe Biden last year killed one hundred and thirty million chickens and that's why egg prices are so high? You know, were putting together a plan to manage the AV and flu in a much wiser way.
So he says, they were putting together a plan to manage the AV and flu in a much wiser way. Obviously a vaccine would be great for those animals who haven't gotten it yet. But you also make drax in, right, which is a drug that I'm not a doctor or a vet, but somehow helps cows and swines with respiratory illnesses. Are there other ways to deal with this problem or do you really have to, you know, nip it in the bud.
Sure, there's many ways to deal with this problem, and I think you know, what Zoetis is focused on is supporting our customers with a whole set of tools in order to do this. What else talking about before is really partnering with our producers to first start around biosecurity,
which they're focusing, you know, very intently on. But it is a challenge when a lot of the new spread you're seeing is spread by wild birds, and so you can't really stop the wild birds from flying over your farm, and that is really what is spreading some of the new We can also focus on better diagnostics to better understand that. There's lots of different tools in the toolbox, you know. Obviously the vaccine is one additional one and it's aligned with our purpose at Zoeti is to nurture
the world in humankind by advancing care for animals. And that's a one health focus, which is I think what the White House and the Congress and the USDA has been really focused on.
And not to put the cart before the horror said to speak. But you know, when you think about the expansion of the vaccine, I recognize that you still need regulatory approval, But what about other animals? Do you see yourself making one for cattle?
You know, We've really stepped in in multiple crises over the years. So we were helping the USDA with a vaccine that they used in their stockpile bon in twenty sixteen. As you think about the COVID crisis, we made vaccines that were used throughout wildlife and in zoos and things like that. So we will continue to partner with the USDA to meet whatever their needs are.
I want to broaden out a little bit because you mentioned your pipeline that you have coming up. There's a lot of excitement over renal disease. For example, you think about cats. You know, kidney diseases are really fatal to cats. And like you said, I mean, you have big blockbusters expected for the next couple of years. But then you take a look at the stock price over a five year basis, you're up about thirteen percent on a total return basis. That compares to about fifty two percent for
your peer group. So with that in mind, what do you think that shareholders are missing here about the story?
Yeah, we were thrilled to deliver double digit top and bottom line performance for twenty twenty four and to give an operational guide for this year. At the top line,
it's six to eight percent for organic operating growth. You know, I think there was a little bit of a disconnect with regards to foreign exchange for US, which was two hundred and fifty million on the top line for US in twenty twenty five fifty million on the bottom line, as well as a divestiture for US of medicated feed additives which is round three hundred and fifty five million that need to be taken out. So we're working through some of that, which we don't really believe was embedded
in the consensus as we saw last week. But we're really confident that we've got multiple drivers of sustainable growth in what is just a phenomenal industry and animal help which has been incredibly resilient and durable.
What does the product makes look like if I look over you know, just a list of your medicines. I see obviously, dealing with parasites is first and foremost. Then you've got like itchy skin problems, right, and then joint issues like arthritis. Are those the three biggest categories?
Yeah, we've got multi billion dollar franchises and the biggest categories. We've been driving double digit growth again, you know, in categories such as paras and dermatology. They've been around for more than a decade. So all these are billion dollar franchises for US, the largest being parasiticides. You've got dermatology where we've been in that market for over eleven years,
still last year driving seventeen percent growth. And then in oa pain where we're really excited about the recent launch in the US of Librella of cilensia, which has been on the market in international for many years, and adding to that over the coming years in renal, oncology, cardiology excepta But.
By the way, do you produce all this stuff here? Do you have overseas labs? I mean, the strong dollar is that really an issue for you?
So the good news is we have a global network, global supply chain. Our largest manufacturing sites are actually in the United States. We also have some significant sites in Europe, but the US is our primary manufacturing place for the for Everyso so the dollar first, right, Well, the dollar does well to that.
In fact, you're a CEO of a company, you want to focus on your products, you want to focus on your competition, you want to focus on getting new things out there. How much do you have to think about the strong dollar? Dynamic, particularly with all the tariff threats out there, the riot higher in the dollar.
Look, our focus is living our purpose and meeting our customer needs every day. We certainly are not experts in foreign exchange, so our goal is to deliver for our customers the products and solutions that they need. Obviously, we've got teams who manage scenarios as you think about, you know, for tariffs obviously, but we don't really make and day to day foreign exchange are. We focus on living our purpose, all.
Right, Christin, that's a good place to leave it. Great to speak to you today in studio. That is the WEETA CEO Kristen Peck joining on the news that Zetas has been granted a conditional license for its avian flu vaccine from the USDA