J.P. 摩根-美股醫(yī)療保健行業(yè)-獸醫(yī)調(diào)查要點(diǎn)：對(duì)我們動(dòng)物健康的影響-2021.4

NorthAmericaEquityResearch

April2021

VetSurveyTakeaways

ImplicationsforOurAnimalHealthCoverage

Pharmaceuticals

ChrisSchott,CFAAC

(1-212)622-5676

christopher.t.schott@J.P.MorganSecuritiesLLC

ChristopherNeyor

(1-212)622-0334

christopher.z.neyor@J.P.MorganSecuritiesLLC

EkaterinaKnyazkova

(1-212)622-9576

Ekaterina.v.knyazkova@J.P.MorganSecuritiesLLC

XilingChen

(1-212)622-0364

Xiling.chen@

J.P.MorganSecuritiesLLC

Seetheendpagesofthispresentationforanalystcertificationandimportantdisclosures,includingnon-USanalystdisclosures.

J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheir

investmentdecision.

1

KeyTakeaways

1Wesurveyed25USveterinarianswhotreatatotalof~65,000dogsand~29,000catsonvarioustopicsrelevantfortheindustry,includingtrendsandexpectationsfordiagnostics,parasiticide,dermatology,andpainmarkets.

1Overallmarketdynamicsremainhealthy:Veterinariansareexpectingtotreatmoredogs,runmoretestsandearnmoremoneypervisitin2021

1Veterinariansexpecttotreatmoredogs(+9%YoY)andrunmorediagnostictests(+6%YoY)in2021.

1Revenuepervisitincreasedformostpracticesthroughthepandemic(+13%YoYin2020),drivenbyhigherdiagnosticutilizationandstandardofcare.Veterinariansseethesetrendspersistingandexpectrevenuepervisittoincreasein2021(+11%YoY).

1Positive:ZTS,IDXX,ELAN,HSKA

1Parasiticidemarketdynamics:.Significantsharegainsaheadfororalproducts,~35%ofdogsstillaren’tgettingcompleteparasiticidecoverage

1Unsurprisingly,mostveterinariansfavornewer-genoralproductsandexpectoralstocontinuegainingshareintheirpracticesovertime(~68%in2019to~85%in2025)attheexpenseofbothtopicalsandcollars(whichatthispointareincreasinglysoldthroughnon-vetchannels).

1Veterinariansestimate~10%ofdogswon’thaveanyparasiticidecoveragein2021andanother~25%onlypartialcoverage,suggestingroomfortheparasiticidemarkettoexpandovertime.

1Positive:ZTS

1Neutral/Negative:ELAN

1SimparicaTrio:Verypositivevetfeedbackthusfar,participantsseetheproductcapturing~40%oftheoralparasiticidemarketby2023(vs~17%ofthedogsintheirpracticetoday).

1Ontheflea&tick(orflea&worm)sideofthemarket,veterinariansseeSimparicaTriotakesharefromBravecto,TrifexisandNexGard,withmorelimitedimpactonCredelio(lowstartingshare).

1Onthewormsideofthemarket,veterinariansseearoleforbothSimparicaTrioandProHeart12withZTSsharecomingprimarilyfromHeartGard,followedbyInterceptorPlusandTriHeart.

1VeterinariansseelimitedSimparicacannibalization,withonly~10%ofSimparicaTriousecomingfrompastSimparicausers.

1WhileuseofTriowasaboveoverallmarketaverages,surveyresultssuggestacontinuedstrongrampfortheproductgoingforward

1Positive:ZTS

1Neutral/Negative:ELAN

2

KeyTakeaways

1Seresto:Mixedviewsonrecentheadlines.

1~55%ofveterinarianswereconcernedabouttherecentSerestoheadlineswhileotherslargelydismissedherisk.Only~35%hadreceivedquestions/concernsfrompetownersusingtheproduct.

1WithSerestolargelysoldoutsidethevetclinic(andvetingeneralnotallthatsupportiveofcollars),itremainsunclearifthereisanyreadacrosstothebroaderSerestouserbasefromtheseresults.

1Neutral/Negative:ELAN

1Derm:ParticipantsseeApoquelpenetrationpeakingbutroomforCytopointtogrow,remainopentoprescribingapotentialdermcompetitor.

1VeterinariansexpectedtheiruseofApoqueltoremainrelativelyflatovertimeandtheiruseofCytopointtogrowfrom~35%todayto~45%oftargetdogs5yearsfromnow.

1Mostveterinariansremainrelativelyopentoprescribingahypotheticalcompetitiveproduct,assumingacomparablesafetyandefficacyprofile(whichvetssawasmostimportant).

1Neutral:ZTS

1Positive:ELAN(assumingdermapprovalsovertime)

1Solensia/Librella:VeterinariansareveryreceptivetoZTS’supcomingpainlaunches

1Veterinariansaregenerallyopentoutilizingbothproducts,citingunmetneedinthespace,desireformorein-clinicinjectibles,trustinZTSandsomefamiliaritywiththeNGFmechanism.

1VeterinariansseeLibrellacapturing~31%shareoverthenext5years(and~19%share2yearsfromnowassuminga2022approval).

1ForfelineOA,veterinariansseeasizeablepatientpopulation(~23%ofcatstreatedhaveOA)andseeSolensiacapturing~46%ofthemarketfiveyearspost-launch.

1Positive:ZTS

1Galliprant:Vetsseeanevolvingrolefortheproduct.

1VeterinarianswerefamiliarbutonlyoccasionallyprescribingGalliprant.However,thosewhousethedruggenerallylikeit.

1VetsexpecttheiruseofGallipranttoincreasefrom~14%todayto~19%2yearsfromnow.5yearsfromnow,veterinariansexpecttheiruseofGallipranttoplateauasZTS’sLibrellaentersthemarket.

1Neutral:ELAN

3

KeyTakeaways

1Diagnosticmarketdynamics:Vetsseediagnosticutilizationincreasing.

1Veterinariansexpecttorun~47%oftestsin-house(vs~53%sentouttoreferencelabs)withthepercentagesunchanged2018-2021.

1Mostveterinariansdonotexpecttoswitchdiagnosticprovidersin2021(95%likelystayingwithexpectingproviders)orthrough2025(76%veryunlikelyorunlikelytoswitch),suggestingbroadsatisfactionwithexistingrelationshipsandthestickynatureofthemarket.

1Veterinariansareexpectingtoutilizediagnosticsinmorewellness(58%in2020vs61%expectedin2021)andnon-wellness(71%in

2020vs73%expectedin2021)visits.

1Positive:IDXX,HSKA

1Onnewofferings,~60%ofpracticesexpecttohaveaurinesedimentanalyzerby2025(vsjust~32%today).

1Positive:IDXX,HSKA,ZTS

1Fecaltesting:veterinariansaren’tparticularlyexcitedaboutfecalanalyzersbutHSKAusersaremorereceptive.

1VeterinariansgenerallydidnotthinkthattheirpracticewouldbenefitfromafecalanalyzerlikeZTS’sVetScanImagystorHSKA’selementAIM,citingworkflowandcostasthebiggestbarrierstoadoption.

1However,Heskausers’responsesweremorefavorable(6.3/10vs4.4/10forallvets),whichweseeasparticularlyimportantasHSKArollsoutelementAIMtoitssubscriberbaselaterthisyear.

1Neutral:HSKA

4

SURVEYBACKGROUND

5

SurveyBackground&MarketTrends:VetsAreSeeingMoreDogsAnd

RunningMoreTests

1Surveyedveterinarianstreatedatotalof~66,500dogsand~28,800catsin2019.Theseveterinariansexpecttotreat~73,200dogs(+10%)and~29,500(+2%)catsin2021.

1Surveyedveterinariansran~52,800diagnostictestsin2019andexpecttorun~60,300testsin2021(+14%).

1JPMView:

1Theincreaseindogsveterinariansexpecttoseein2021isconsistentwithcommentsZTS,ELAN,IDXXandHSKA(andmanyothers)havemadearoundtheCOVID-19driven“puppyadoptionboom”.Thisstepupinpetownershipshouldrepresentadurablebenefittotheindustryevenasadoptiongrowthratesnormalizeovertime.

1Resultssuggestanincreaseindiagnosticutilizationbothin2020andin2021andweseethistrendcontinuingovertimeaspenetrationofmanyoftheseproductsremainslow.

Q:Howmanydogs(cats)haveyoutreated/seenorexpecttotreat/seeineachofthefollowingyears?

80000

70000

60000

50000

40000

30000

20000

10000

0

2020petadoptionuptick

dogs

cats

201920202021

Source:J.P.Morgansurvey

Q:Howmanydiagnostictests(bloodwork,urine,fecal,etc)haveyourun-in-houseorsenttoareferencelabineachofthefollowingyears?

70000

60000

50000

40000

30000

20000

10000

0

6

DiagnosticTestingVolumes

201920202021

2019

2020

Q:Pleaseestimatethepracticerevenuepervisitin2019,2020andyourexpectationsfor2021?

$243

$215

$300

$250

$200

$150

$100

$50

$0

$269

2021

MarketTrends:PracticesAreEarningMoreRevenuePerVisit

1Veterinarians’practicesgeneratedrevenuesof$216/visitin2019.Veterinarianssawrevenuesincreasingin2020($243/visit,+12%)andexpectthistrendtocontinuein2021($269/visit,+10%).

1Thebiggestfactorscontributingtopracticerevenuegrowthincludedmoretesting,higherstandardorcareandagreaterwillingnesstotreatchronicconditions(inpartduetospendingmoretimewithpetsathome)andclientswantingtoruncomprehensivetestsgivenchallengesschedulingappointments.

1JPMView:

1TheseresultsahighlyconsistentwithcommentsmadebyIDXX,ZTSandothers.Petownersareincreasinglywillingtospendontheiranimalsandvetsareofferingawiderrangeofservices(includingmorediagnostics).

Q:Explainwhichfactorscontributedtogrowth(ordeclines)inrevenuepervisit?

Clientsmorewillingtododiagnostictesting

Clientswantingtorunalltestsbecausedifficulttogetappointments

increasingnumberofpetownerswithtimetomanagechronicconditionsandconductappropriatefollowup

Morenewpets,morepeopleathomewithpets,competitorsdroppingemergencyserviceslocally

Economicpositionofclients,decreasedabilitytocomeintopractice

Routinepriceincrease,moreinsurance

WEaresocrazybusy.Allappointmentfullnowpluswaitinglistandithasbeenthiswaysincelatelastyear…

NormalYOYincreaseandfolkswillingtodomore

Willingnesstospendmoneyforpreventativemanagement

theownersabilitytoaffordthecostoftestsandproducts

Withthepandemicpeopledon'twanttohavetocomebackforasecondvisit…everyoneisgettingastimuluscheckwhichtheyarespendingwithus!

Allgrowth,increaseinpetsinhousesunderquarantine.Increaseintimespentwithpetstonoticesaidpetsidiosyncrasiesandcallinthinkingitsabnormal…

7

Source:J.P.Morgansurvey.Note:Thesesurveycommentshavebeenreproducedintheiroriginalformandhavenotbeenedited.SurveycommentsshouldnotbeattributedtoJ.P.Morganandarenotrepresentativeofitsviews.

SURVEYRESULTS:PARASITICIDES

8

flea&tick+wormproduct

39%

flea&tickproductonly

9%

~35%ofDogsAreNotGettingSufficientParasiticideCoverage

1Veterinariansestimate~39%ofdogsintheirpracticewillbetakingaflea&tickproduct(suchasNexGard)andawormproduct(suchasHeartGard),~14%willbetakingaflea&tick&wormproduct(SimparicaTrio)and~12%aflea&wormproduct(suchasTrifexis),

1Thisleaves~35%notreceivingfullcoverageincluding~15%ofdogswillbetakingonlyawormproduct(suchasHeartGard),~9%onlyaflea&tickproduct(suchasNexGard)and~11%willhavenoparasiticidecoverage.

1JPMView:

1Theseresultshighlightthatasignificantnumberofdogs(~35%)includedinthesurveyarenotgettingsufficientparasiticidecoverage,missingeitherworm,fleaortickprotection(ornotgettinganyprotectionatall).

1ConvertingthesedogstoSimparicaTriooranotherflea&tick+awormcombo(onceapproved)wouldtranslateintosignificantgrowthfortheoverallparasiticidemarket.

Source:J.P.Morgansurvey

Q:Ofthedogsinyourpractice,pleaseestimatethepercentreceivingeachofthefollowingparasiticidetherapiesin2021?

NOcoverage

11%

flea&tick&wormproduct

14%

wormproduct

only

15%

flea&wormproduct

12%

9

Unsurprisingly,VeterinariansExpectOralstoGainShareOverTime

1Lookingatflea&tickproducts,veterinariansareexpectingoralstogainshareovertime(from~68%in2019to~85%in2025).

1Veterinariansexpecttopicalstolosethemostshare(from~24%in2019to~10%in2025),followedbycollars(from~7%in

2019to~3%in2025).

1JPMView:

1Theseresultsarelargelyin-linewithourexpectations-andconsistentwithresponseswehaveseeninpriorsurveys–withvetclinicsadoptingoralsoverotherflea&tickproductsovertime.Thisresultslikeoverstatetheerosionoftopicalsandcollars,whicharelargelyavailableOTCandthroughnon-vetchannels

1ForAdvantage(ELAN):TheseresultssupportourviewthatAdvantageinthevetchannelshouldcontinuetodeclineovertimeasoralscontinuegainingsharerelativetotopicals.However,weexpecterosiontomoderateovertimeasmorevolumeflowsthroughonline/alternativechannels.

1ForSeresto(ELAN):Theseresultssuggestamodestlysmallerroleforcollarsovertimeinthevetclinic.Thatsaid,weseenon-vetchannelsastheprimarymarketforaproductlikeSeresto

Q:Ofthedogsinyourpracticethatareonpreventativeparaciticideflea&tickproduct,pleaseestimatethepercentthatarereceiving(andwillbereceivinginthefuture)eachofthefollowingproductcategories

90

80

70

60

50

40

30

20

10

0

Source:J.P.Morgansurvey

oral

other

topicalcollar

2019202120232025

10

SimparicaTrioPoisedtoGainSignificantShare

1Amongoralflea&tickandflea&wormproducts,in2019themostusedproductamongourvetswasMerck’sBravecto(~38%share),followedbyBI’sNexGard(~22%),ELAN’sTrifexis(~17%),ZTS’sSimparica(~12%)andELAN’sCredelio(~10%).

1VeterinariansexpectSimparicaTriotoquicklygainshare,estimating~17%sharefortheproductin2021and~40%in2023.

1VetsseeTriosharecomingfromBravecto(~11%shareloss),Trifexis(~10%shareloss)andNexGard(~9%shareloss).VeterinariansareexpectingmoremodesterosionforCredelioandSimparica(likelysomeTriocannibalization).

1JPMView:

1ForSimparica/SimparicaTrio(ZTS):Obviouslytheseresultspointtoverystronguptake(~40%shareby2023)forSimparicaTriooverthenextseveralyears,wellaboveourexpectations.Thatsaid,othertriples,onceapproved,likelymoderatethissharegain.VeterinariansarealsoexpectingonlymodestcannibalizationforSimparica,aclearpositivefortheoverallfranchiseandconsistentwithZTSmgmtcomments.

1ForTrifexis(ELAN):VeterinariansseeTrifexislosingsharetoSimparicaTrio,andweseetheproductbecomingasmallerandsmallerpartofELAN’sparasiticideportfolioovertime.

Q:OfthedogsinyourpracticethatareonpreventativeORALparaciticideflea&tickor(flea&worm)products,pleaseestimatethepercentthatarereceivingthefollowing:

Source:J.P.Morgan

45.0

40.0

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0

survey

SimparicaTrioNexGardSimparicaBravectoCredelioTrifexisOther

201920212023

11

VetsSeeaRoleforBothSimparicaTrioandProHeart12

1Amongwormproducts,in2019themostusedproductwasBI’sHeartGard(~42%share),followedbyELAN’sInterceptorPlus(~19%),Merck’sTriHeart(~17%),ZTS’sProheart6/12(~13%).

1VeterinariansexpectSimparicaTriotoquicklygainshare,estimating~18%sharefortheproductin2021and~35%in2023.

1VeterinariansseeSimparicaTrioshareinthewormmarketcominglargelyfromHeartGard(~21%shareloss),followedbyInterceptorPlus(7%)andTriHeart(6%).

1Interestingly,veterinariansexpectZTS’sinjectibleProHeart6/12togainshareoverthenextseveralyears(~4%sharegainby

2023)reflectingsharegainsintheportionofthemarketstilloptingforseparatewormandflea/tickofferings.

1JPMView:

1ForInterceptorPlus(ELAN):VeterinariansseeInterceptor/InterceptorPluslosingsomesharetoSimparicaTriointhewormmarket,albeitnotasmuchasBI’sNexGard.

1ForProHeart12(ZTS):TheseresultssuggestaroleforBOTHSimparicaTrioandProHeart12inthewormmarketandhealthysharesgainsforZTSintheparasiticidemarketovertime.

Q:Outofthedogsreceivingawormproduct(suchasHeartgardandProHeart)orSimparicaTrio,pleaseestimatethepercentofdogsinyourpracticethatare(orwillbe)oneachofthefollowing?

45

40

35

30

25

20

15

10

5

0

SimparicaTrioHeartGardTriHeartInterceptorProHeart6/12Other

201920212023

12

Source:J.P.Morgansurvey

Flea&worm

12%

Flea&ticktopicals

14%

SimparicaTriotoSupportShareGainsforZTSinParasiticideMarketWithLittleCannibalizationforSimparica

1AmongdogsonSimparicaTrio,only~11%ofdogswerepreviouslyonSimparica,~47%wereonotherflea&tickoralslikeNexGardandBravecto,~14%wereonflea&ticktopicalslikeAdvantage,~12%wereonaflea&wormproductlikeTrifexisand~5%werepreviouslyusingacollar.For~11%ofdogs,SimparicaTriowastheirfirstproduct.

1JPMView:

1ForSimparicaTrio(ZTS):Theseresultsagainhighlightthatvolumefortheproductisprimarilycomingfromnon-ZTSproducts(Nexgard,Bravecto,etc),withonly~11%comingfromSimparica(againhighlightingmorelimitedcannibalization).

1ThisshouldsupportmeanigfulsharegainsforZTSintheparasiticidemarketovertime.

Source:J.P.Morgansurvey

Q:ForthedogsonSimparicaTrio,whichflea&tick(orflea&worm)

productweretheyusingpriortoSimparicaTrio?

n/a-newpuppy

11%

Simparica11%

Flea&tickcollars

5%

Otherflea&tickorals

47%

13

VeterinariansHaveHadAPositiveExperiencew/SimparicaTrio

1Oftheveterinarianswhohaveprescribedtheproduct(22outof25),veterinarianswerehighlysatisfiedwithSimparicaTrio(average=8.2,median=8)whenaskedtoratetheirexperiencewiththeproductonascaleof1to10

1Mostveterinarianshighlightedtheproduct’sconvenience,effectivenessandtolerability.Afewveterinarianshighlightedtheproduct’shighcost(n=2).

Q:HowwouldyourateyourexperiencewithSimparicaTriosofar?Pleaseelaborateonyourratingabove.

Stillnewsocan'tsayI'mextremelysatisfiedyet.Alsofinditverycostly.

Easyandwelltolerated

Goodproduct

wehavenotbeenusingtheproductverylong,butwehavenothadanycomplaintsfromowners

Coupleofvomitingdogs.Notnervous.Yet.

greatnewproduct,weareinaheavytickandheartwormarea.

It'sokay

Effectiveandpalatable

wereallyonlyjuststartedtoofferit.Myonlycomplaintisitisnottootasty-myowndogsdon'tlikethetaste.

Workswell,expensivebuteasytouse.

goodstats,toleratedwellandpricecheaperthansomeotheroptions

I'mhappywithwhatIhave

Nosideeffectsnoted,dogslikethem

Reliableproductandconvenient

StillintestingphaseofefficacyforthisdemographicLowparasiterange

Q:HowwouldyourateyourexperiencewithSimparicaTriosofar?Pleaserateonascaleof1-10.

8

7

6

5

4

3

2

1

0

12345678910

14

Source:J.P.Morgansurvey.Note:Thesesurveycommentshavebeenreproducedintheiroriginalformandhavenotbeenedited.SurveycommentsshouldnotbeattributedtoJ.P.Morganandarenotrepresentativeofitsviews.

Q:AreyouconcernedabouttherecentmediaheadlinesonSeresto?

Q:Havepetownersontheproductvoicedanyconcernstoyouthusfar?

No44%

Yes36%

No

64%

Yes56%

Seresto:VeterinariansHaveMixedViewsonRecentHeadlines

1WhenaskedaboutrecentSerestoheadlines,veterinarianshadmixedviews.14vets(56%)wereconcernedaboutrecentmediaarticleshighlightingsafetyissuesfortheproduct,while11vetswerenotconcerned.Atthesametime,~35%ofvetshavehadpetownersvoiceconcerns,while65%vetshavenot.

1Vets’commentswereverydiverse,ragingfrom“Ithinkthiswassensationalizedmediamostly”to“ownersareveryconcernedfortheirpets,andtheirchildren(andthemselves)”to“wedon’tusethesecollarsanyways”.

1JPMView:

1ForSeresto(ELAN):Whileveterinarianviewsonrecentheadlinesweredifficulttogauge,itisimportanttohighlightthatSerestoislargelypurchasedoutsidethevetclinic(OTCproduct).Ultimately,petownerswilldeterminewhetherornottobuytheproductandatthispointitistooearlytotelltowhatextentmediaheadlinesareresonatingwiththebroaderpopulation(overallmediaimpressionsonthetopicseemedtohavepeakedlastmonth).

Q:AreyouconcernedabouttherecentmediaheadlinesonSeresto?Havepetownersvoicedanyconcernstoyouthusfar?Pleasexplain

Peoplewillbelievethesearticlesasfact.Wehavealreadyhadpeoplecontactuswithconcernsaboutit…

Stoppedclientsfromusing

wehaveseenacaseofsuspectedSerestorelatedtoxicity

Ithinkthiswassensationalizedmediamostly.ClientsthatuseSerestoandlikeitareloyaltotheproduct.Wecontinuetoprovideitasanoption.

Clientshaveyettoaskaboutthis.

Thesewereisolatedincidentsandwedon'tusethesecollarsanyway.

Notenoughinformationyet.

Ownersareveryconcernedfortheirpetsandtheirchildren(andthemselves...Manyhavequestionedtheirpetsepilepsyascausedbythesecollars

Itisaverylownumberperyearandreportedcasesarenotalwaysvalidated.Everycomplaintisregistered

Ihaven'thadbadexperienceswithSeresto.TheAVMAstatementwashelpfulinbackingupmylackoffaithintheseadversereports.

15

Source:J.P.Morgansurvey.Note:Thesesurveycommentshavebeenreproducedintheiroriginalformandhavenotbeenedited.SurveycommentsshouldnotbeattributedtoJ.P.Morganandarenotrepresentativeofitsviews.

SURVEYRESULTS:DERM

16

VeterinariansSeeCytopointUseIncreasing,AreSatisfiedWithBothApoquelandCytopoint

1Onaverage,veterinariansexpectedtheiruseofApoqueltoremainrelativelyflatovertime,from~46%todayto~48%5yearsfromnow.AtthesametimeveterinariansexpectedtheiruseofCytopointtoincreasesignificantlyfrom~35%todayto~44%5yearsfromnow(vs~21%2yearsago).

1Onaverage,whenaskedtoratetheirexperiencewiththeproductonascaleof1to10,veterinarianswerehighlysatisfiedwithApoquel(average=8.3,median=8)andCytopoint(average=8.3,median=9).

1JPMView:

1TheseresultssuggestthatwhileApoquelpenetrationmaybepeaking(notentirelysurprisingconsideringhasbeenonthemarketformorethan7yearsnow),veterinariansareexpectingtheiruseofCytopointtoincreaseovertime,whichbodeswellforZTS’sdermatologyportfolio.

1Veterinarians’positiveexperienceswithApoquelandCytopointarenotsurprisinggiventhecommercialsuccessZTShasseenwiththetwoproducts.

Q:Ofthedogsyoutreatforatopicdermatitisorallergicdermatitis,towhatpercentdoyouprescribeApoquelandCytopoint?

60%

50%

40%

30%

20%

10%

0%

ApoquelCytopoint

2yearsagotoday2yearsfromnow5yearsfromnow

Source:J.P.Morgansurvey

Q:HowwouldyourateyourexperiencewithApoquelandCytopointsofar?Pleaserateonascaleof1-10

10

9

8

7

6

5

4

3

2

1

0

12345678910

ApoquelCytopoint

17

VeterinariansAreGenerallyReceptivetoaDermCompetitor

1WhenaskedhowlikelytheywouldbetoprescribeaproductcomparabletoApoquel,veterinariansweregenerallytoopentotheidea(average=7.5,median=8).

1Notsurprisingly,efficacy,verycloselyfollowedbysafetywerethemostimportantfactorsindecidingtoswitchtoahypotheticalApoquelcompetitor.Costwasthethirdmostimportantfactor.

1JPMView:

1ItisnotsurprisingthatveterinariansarereceptivetotheideaofprescribingahypotheticalApoquelcompetitor,asvetsarealmostalwayshappytohavemoreoptions.

1Ultimately,weseeuptakeforapotentialcompetitortobedrivenbythecompetitor’sefficacyandsafetyprofilerelativetoZTS’sproduct.Andveterinarians’loyaltytoZTS’sportfoliowillservethecompanywellwhencompetitiondoesinevitablyemerge.

Q:IfaproductcomparabletoApoquelweretobeapprovedtoday,howlikelywouldyoubetoprescribeit?

8

7

6

5

4

3

2

1

0

12345678910

Source:J.P.Morgansurvey

Q:WhichfactorswouldyouseeasmostimportantwhendecidingonwhethertoswitchfromApoqueltoacompetitiveproduct?

18

3

2.5

2

1.5

1

0.5

0

cost

experiencewithproduct

efficacyprofilesafetyprofile

SURVEYRESULTS:PAIN

19

Q:HowwouldyourateyourexperiencewithGalliprantsofar?Pleaserateonascaleof1-10.

VeterinariansGenerallySatisfiedWithGalliprant

1Ofthesurveyedveterinarians,whilemostwerefamiliarwithGalliprant(23/25),asmallerpercentage(15/25)haveprescribedtheproduct(andonly8veterinariansprescribedtheproductoften),suggestinglessfamiliarityandutilizationforGalliprant.

1However,oftheveterinarianswhohaveprescribedtheproduct,whenaskedtoratetheirexperienceonascaleof1to10,veterinariansweresatisfiedwithGalliprant(average=7.4,median=7).

1Veterinarianshighlightedtheproduct’sfavorablesafetyprofile.Whilesomethoughttheproductwaseffective(particularlyinOA),otherspointedtomoremixedexperiences(“doesn’tworkaswellasotherNSAIDs”).Anumberonvetsalsonotedthehighcostoftheproduct.

1JPMView:

1ForGalliprant(ELAN):Thesecommentsweren’tsurprising(andconsistentwithourpreviousAHsurvey)andresponsessuggestveterinariansarestillintheearlystagesofadoptingtheproduct.

1ForZTS:Thereappearstoberoomforfurtherimprovementinthepainmarketfromhere.

Pleaseelaborateonyourratingabove

6

5

4

3

2

1

0

12345678910

Effectiveforchronicarthritis,butnotbeneficialforacutepainorspinaldisease

Ok

Livetheproduct,hatetheprice

Goodpaincontrol.Notalwaysthe"safernsaid"asadvertised

Seemstoworkforsome,isthesecondorthirdMedIchoose

Somedogsdevelopdryeye

verygoodforOAandpostoppaincontrol

Highcost

Iseegoodefficacy,butlongtermusecanbecostly

OverallIthinkitunderperformscomparableproducts.Idon'tthinkwehavehadthebestindicationsforitsusehowever.

Itworks!

bettersafetyprofilebutdoesnotseemtoworkaswellasotherNSAIDSandmoreexpensive

Havenotusedenough

20

Source:J.P.Morgansurvey.Note:Thesesurveycommentshavebeenreproducedintheiroriginalformandhavenotbeenedited.Surveycomments

shouldnotbeattributedtoJ.P.Morganandarenotrepresentativeofitsviews.

Q:Basedonyourknowledgeand