AnimalTracksChewonThis:1QVeterinarySurvey;InitialCOVID-19Impact;SustainedConfidenceinZTSandCHWYLifeScienceToolsandDiagnostics|ChannelCheck■InitialCOVID-19pandemicimpacton1QVetpracticevolume,revenue:Accordingtoourproprietarysurveyof75UScompanionanimalveterinarians,47%ofpracticesexperiencedpositivevolumegrowthin1Q,declining-0.1%onaweightedavg.basis,thefirstquarterinoursurvey’shistoryinwhichpatienttrafficwasnegativeonaweightedavg.basis,attributabletosocialdistancingprotocolsatvetsandcallsfromveterinaryindustryorganizationstodelayroutineandelectiveproceduresinresponsetoCOVID-19pandemic.Practicerevenuesfaredslightlybetterthanoveralltraffic,increasing0.1%onaweightedavg.basisin1Q,withsustainedstrengthinacutevisits/ERhelpingtooffsetdeclinesinroutineprocedures.For2Q,vetsarecallingforamorepronounced(-2.4%weightedavg.)declineinpracticevolume,asexpected,butrespondentsexpecttheCOVIDimpacttobeconcentratedinthecomingmonths,withthemajority(73%)expectingpostponedvisitstooccurwithinthenextthreemonths.Morebroadly,wereiteratetheresiliencyoftheAnimalHealthsector,whichreboundedrelativelyrapidlyinpriorrecessionaryperiods.■ZTS—LeadingtheAnimalKingdom:Themajority(59%)ofrespondentsselectedZoetis(ZTS,Outperform)asthebestpositionedinAnimalHealth,notingitshigh-impactandcomprehensiveportfolio.ResponsesregardingitsblockbusterSimparicaTrio(est.mid-Aprillaunch)wereencouraging,withoverhalf(51%)likelytoprescribetheparasiticideovercurrentofferings,andthevastmajority(60%)viewingthelaunchasintimeforthe2020flea/tickseason.Feedbackonitsatopicdermatitisportfoliowasincrementallypositive,with55%expectingtoprescribemoreApoquelin2020(vs.2019),andtheadvantagesofCytopointareincreasinglyresonatingwithoverwhelminglyconstructivefeedback,suggestingupsidetoour2020estimateof$227million,+10%($802totalatopicderm).Thevastmajority(73%)ofrespondentsexpressedwillingnesstoprescribeZTS’supcomingmonoclonalantibodycandidatetotreatfelinepain(est.2021launch),underscoringthedireneedfortheproduct.Whileourrecentconversations...
