Animal Health: Corporate Practice Pulse—Labor Easing, Price Sensitivity

Research evidence excerpt

Animal Health: Corporate Practice Pulse—Labor Easing, Price Sensitivity

labor supply will help ease pricing and fill IDXX 560.11

empty shifts. Furthermore, a number of consolidators noted they are seeing pockets of TRUP 24.61

improving SSS, even in older/mature practices.

INDUSTRY RISKS

• Elanco is gaining ground, though Zoetis still leads in the clinic. We heard from a Competition, regulation, consolidation,

delays in launch of new products number of practices that are actively increasing their Elanco purchases, with Zenrelia

sweeping JAK inhibitor share and Credelio Quattro still seen as having meaningful

runway ahead. Zoetis continues to be viewed as the most complete and best-organized

drug manufacturer in the channel, and few practices described a world where Zoetis is

not their primary partner. Net-net, we still view Elanco as gaining share among corporate,

though it will need to be earned from a touch competitor.

• Pharma competition. On the Q1 2026 earnings call, Zoetis raised some comments

about competitors using price. This was supported by the practices we spoke to which

also mentioned that they are leaning into price more following years of inflationary

pressure from suppliers. In addition, the new Merck products, Nulmelvi and Quantum,

had a much better reception from the corporate groups compared to our checks just

a few months ago and our survey vets took in March. We believe the Merck products

could see an inflection in 2026.

• Diagnostics. The key insight from the conference much fewer consolidators are making

modality-by-modality diagnostic decisions — they are making partner decisions — and

IDEXX is viewed as the only option capable of serving as a true enterprise partner. This

largely centered on PIMS integration and software depth.