Few pet owners are comfortable with seeing their animals in pain, and Zoetis CEO Juan Ramon Alaix said his company's latest blockbuster drug, Apoquel, stretches the boundaries of allergic itch treatment in pets.
"It's better in terms of efficacy. It's faster," Alaix told "Mad Money" host Jim Cramer on Monday. "You don't see the side effects that you see with steroids, which is very important for pet owners and veterinarians."
Alaix said innovation led his company to release this landmark drug, which quickly swept up 47 percent of the market share in the atopic dermatitis space for dogs.
The drug is often paired with an injectable medication called Cytopoint, which uses monoclonal antibodies to produce fewer side effects.
The company's recently announced acquisition of Nexvet Biopharma, a leader in pet medications that use monoclonal antibodies, will be key to developing medicines with fewer adverse side effects and could actually forge the way to disrupting the fairly barren treatment market for cats, the CEO said.
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"Today, there is nothing available for a cat which is working well. Monoclonal antibodies will be an injectable formulation, and this will [work] very well for treating a cat with these pain conditions," he told Cramer.
It's no secret that merger and acquisition activity has been a key to Zoetis' rise. The company is a high taxpayer, and Alaix said that if lawmakers in Washington pass corporate tax reform, the company would not slow its takeover streak.
"We still have opportunities to bring new companies in the core business, but also in the complimentary, diagnostics or genetics or biodevices," he said, touting the company's recent acquisitions of Nexvet, Pharmaq, and Scandinavian Micro Biodevices.
Spending on takeovers would, however, come second to investing in the business by way of research and development, manufacturing, and commercial initiatives, Alaix said, adding that any additional cash would be returned to shareholders via dividends or share buybacks.
"It will be very positive. Definitely, we see that as an opportunity to significantly increase our profitability," the CEO said. "We still plan to continue growing this EBITDA margin, but the help of the tax reform will also have a positive impact in our operation."
Correction: This story was revised to say that Zoetis' acquisition of Nexvet is not yet completed, and that Cytopoint treats allergic itch in dogs.
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