Zoetis and Merial join to market drugs, vaccines for cattle in India

black and white cow
(Marielle den Hoedt / CC BY SA 2.0)

Zoetis ($ZTS) and Sanofi's ($SNY) Merial unit are teaming up to market drugs and vaccines for dairy cattle in India. The deal comes as Merial tries to build up its presence in the companion-animal and food-production markets and Zoetis looks to diversify its portfolio to chart growth.

Neither side is revealing financial details. But under the terms of the deal, Merial will market Zoetis' products including Bovical, Lutalyse, Xnel, Dectomax and vaccines such as Rispoval and Spirovac in India starting in April 2016, the company said in a statement.

Zoetis' meds "complement Merial's existing ruminant business" in the country and will help expand the company's footprint in India's "important dairy segment," Merial India Country Manager Sandeep Karkhanis said in a statement. The ruminant business comprises more than half of the animal health market in India. And the market for dairy products in the country is expected to grow by around 25% every year until 2020, according to an analysis from Credit Analysis & Research Limited.

Zoetis and Merial plan to cash in on this trend with drugs and vaccines for cattle, which keep the animals healthy for food production. The companies see Zoetis' products, combined with Merial's knowledge of India's health market, as paying dividends.

"This agreement reinforces the strategic importance of India and the animal health market in the country. We plan to keep our focus and investment in product innovation, acquisitions and alliances, growth areas and services to meet the evolving needs of our customers," Karkhanis said.

Ketan Dhamanaskar, Zoetis' GM of South Asia

Zoetis also wants to gain ground in India's companion animal market through the deal. Merial relies on its companion animal business for sales growth, and Zoetis will be able to leverage the company's expertise to boost its visibility in the market.

"As a result of this arrangement, Zoetis India Limited will also be able to focus its field force and resources on building a stronger presence and market leadership in the Poultry and Companion Animal sectors in India, which grew at 18.6% and 12.8% respectively in 2015," Zoetis' Managing Director for India and GM of South Asia Ketan Dhamanaskar said in a statement.

A deal with Merial comes at a pivotal moment for Zoetis. The company recently posted better-than-expected fourth-quarter results but dampened its sales forecast for 2016. Zoetis is looking to vaccines and new products to regain momentum.

"In our three years as a public company, we have been delivering consistent operational revenue growth, and we expect our 2015 growth to show once again that we are growing faster than the industry," said CEO Juan Ramón Alaix said last month.

- read the statement (PDF)