Chris Adolph, a veterinary specialist at Zoetis
Chris Adolph, a veterinary specialist at Zoetis ($ZTS), had just graduated from veterinary school when topical flea-and-tick fighters for dogs started hitting the market in the mid-1990s. They were a huge improvement over flea-fighting collars, but not nearly as exciting, he says, as the Zoetis product that won FDA approval on Feb. 25: Simparica (sarolaner), a once-monthly chewable pill that fends off fleas and four types of ticks.
Topical antiparasitics, such as Zoetis' own Revolution, "were such an advance over what we had," Adolph told FierceAnimalHealth in a phone interview. "But oral products represent the next level."
The entry of Simparica sets up a three-way race between Zoetis, Merck ($MRK) Animal Health and Sanofi's ($SNY) Merial to capture a global market for antiparasitics that consultant Vetnosis estimates to be worth more than $4 billion a year. Like Simparica, Merck's Bravecto and Merial's NexGard are in a class of oral medicines called isoxazolines. But the latter two have a distinct advantage: They've been on the market for nearly two years, making Zoetis a distant third in the race.
Adolph isn't concerned. In head-to-head studies against NexGard, Simparica killed fleas more rapidly than Merial's chew did, and it lasted longer--about 35 days. The long-acting nature of Simparica could prove to be a major advantage, says Adolph, who ran a veterinary practice in Tulsa, OK. "I know firsthand that pet owners are not prompt about giving medication," he says. "Life happens."
Competing against Bravecto on convenience could be trickier, however, because the Merck product only has to be given every three months. Zoetis does have some data from a head-to-head trial showing that its product is 100% effective against brown dog ticks at day 90, while Bravecto's efficacy drops to 50%.
Zoetis also hopes to compete on price. The average cost per pill (available in 7 dosage strengths) will be less than that of NexGard or Bravecto, Adolph says.
The Simparica approval was a bright spot in what has been an otherwise challenging start to 2016 for Zoetis. In January, the company was hit with an unexpected $35 million to $45 million tax charge after the European Commission ruled that a commonly used tax scheme in Belgium that Zoetis and other multinational companies were using is illegal. And even though Zoetis' fourth-quarter earnings beat estimates, it had to dampen its revenue forecasts for this year due primarily to volatile foreign exchange rates.
Investors are clearly taking a wait-and-see approach to the Simparica approval. Zoetis' stock dropped about 1% the day after the news to $42.38, and it's down 10% for the year so far.
- here's the release from Zoetis
Image courtesy of Elizabeth Tersigni CC BY 2.0