France-based Vetoquinol might not have quite the name recognition as its rivals in animal health, but it has been pursuing an aggressive growth strategy over the past few years that has kept it at No. 10 on FierceAnimalHealth’s list of the top companies in the field. That strategy includes moving away from antibiotics--once the bread and butter of the 83-year-old company.
Judging from its third-quarter results, Vetoquinol seems to be making progress toward meeting that goal. The company reported on October 18 that its third-quarter sales rose 2.3% at constant exchange rates to €85.3 million ($92.8 million). Sales during the period were especially strong in the Americas and Asia Pacific, according to a press release, where organic growth was 5.9% and 14.6% respectively.
Vetoquinol has been increasing its presence in companion animal health, expanding its catalog to include a variety of oral-care and vitamin products, as well as the antifungal Clotrimazole for dogs and cats and Vetprophen to manage arthritis pain in dogs. Last year, the company won European approval for Upcard, a drug to treat congestive heart failure in dogs. Cardiology and nephrology are among Vetoquinol's biggest priorities in R&D.
The company’s expansion strategy also includes M&A, and in 2014 it bought the veterinary division of Canada’s Bioniche Life Sciences. That addition brought the company into the field of assisted reproduction for cattle and horses.
But regulatory changes meant to stem antibiotics use in farm animals--particularly in the U.S.--have taken a toll on Vetoquinol. The FDA is getting set to implement tough new rules regulating the labeling and prescribing of antibiotics in food animals--moves meant to stem the rise of drug-resistant super-bugs in people. In the first nine months of the year, Vetoquinol’s livestock sales dropped 2.5%, it said.
Now Europe is catching up to the States and implementing its own antibiotics restrictions. As a result, Vetoquinol’s sales in Europe dropped 3.3% during the third quarter, according to the release.
Vetoquinol will continue to look for acquisition targets to help increase its footprint in companion animal health and other fast-growing sectors of the industry, said CEO Matthieu Frechin in the release. That strategy “has allowed us to rebalance our business model by reducing our dependence on antibiotics and strengthening our international footprint,” he said. “Given our strong balance sheet, we are capable of accelerating this transformation process via external growth, by aiming at significant acquisitions in our traditional areas of business or in new sectors of the animal health market.”
- here’s the earnings release