Interview: Zoetis shifts from treatment to prevention

Mr Kelly is speaking at the F&A Next event, mid-May 2019, at Wageningen University, the Netherlands (see box). Mr Kelly has over 20 years experience in the animal health industry. Zoetis produces medicines, vaccines and diagnostic products. With a revenue of US$ 1.3 billion attributable to antibiotics for livestock, antibiotics are an important part of Zoetis’ total revenue of $ 5.8 billion.

Guidelines on antibiotic use

According to the World Health Organization (WHO), ‘over-use and misuse of antibiotics in animals contributes to the rising threat of antibiotic resistance’. In 2017, the WHO therefore released guidelines to cease the practice of routinely administration of antibiotics routinely to healthy animals.

The European Union placed restrictions on the use of antibiotics in 2 veterinary medicines regulations, which were adopted in 2018. The sales of veterinary antibiotics in the EU have decreased by more than 20% between 2011 and 2016, according to a report published by the European Medicines Agency (EMA). The United States banned antibiotics to promote growth in livestock, but still allow antibiotics to be given to healthy animals to prevent diseases.

More prevention versus treatment

Mr Kelly sees that there is a major shift going on from treating diseases to preventing diseases. “There is a lot of innovation in this area, also at Zoetis,” adds Mr Kelly. A primary focus for Zoetis in 2018 was to increase the scale and market position in veterinary diagnostics. As a result, the company Abaxis was acquired, which develops instruments to detect diseases in animals.

In addition, the acquisition of start-up SmartBow, developing electronic ear tags for cows to detect signs of disease, contributed to Zoetis’ renewed focus.

Startups are drivers for innovation

SmartBow is not the only start-up collaborating with Zoetis. Mr Kelly says, “We acquired SmartBow in 2018 after a few years of partnership. With this acquisition we are able to speed up and scale up the development of the technology. That’s the same with other start-ups we collaborate or partner with. These start-ups are drivers for innovation at Zoetis and the collaboration can help start-ups further in their development.”

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Mr Kelly expects the collaboration with start-ups to be one of the multiple drivers for the existing R&D department within the company. As a result of Zoetis and the market’s changing focus, the scope of the activities of Zoetis is becoming broader. From being a company that is mainly active in vaccines and medicines, it has become a company that also deals with diagnostics for detecting diseases, genetic testing for prediction and services.

Mr Kelly says, “This does not mean that we think that antibiotics must not be used. We believe that veterinarians and farmers need the right tools to help their animals, with the condition that they use them responsibly.”

Growth in developing markets

Mr Kelly notes another trend: the rapid growth of, and in, the developing markets. Zoetis mainly observes opportunities in developing countries like Brazil and India. The company therefore wishes to do most of its future investments in those areas.

Mr Kelly says, “The middle-class in developing countries is growing fast. The population is growing at a rapid pace and the Western trends are also reaching the developing countries. That means that attention paid to, for example, sustainability and food safety is increasing and becoming more global.”

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Another Western development that is moving to other countries is regulation. Mr Kelly says, “In the EU for example, we see a lot of regulation in animal health related subjects. There is a lot of focus on product and user safety. Additionally, we see a lot of innovation protection. Also these topics are becoming more and more important in developing countries. All in all, this means that standards for animal health products are being developed and implemented at a high pace.”

Pain management and sustainability

Zoetis is involved with multiple developments that are often driven by public opinion, followed by political influences and regulations that farmers and veterinarians have to cope with.

Mr Kelly says, “These 3 pillars drive a lot of innovation in animal health but are also different from each other. But in the end, we all want good and safe food products and healthy animals and our concerns and interests are not as far apart as we think. Keeping everybody happy is the thing you strive for.”

A good example of something everybody wants is reducing pain, especially in cattle. He says, “It is something that is not covered well enough yet. In the coming years we will continue with innovation in pain management. Another ongoing subject that will drive innovation is sustainability. We will need more food for more people, produced on the same amount of land, but with less animals. This challenge will keep us, and the whole livestock sector, busy in the coming years.”