Zoetis to buy veterinary diagnostics firm Abaxis for $1.9 billion
Top animal health company Zoetis Inc will buy Abaxis Inc for $1.9 billion, looking to capture a bigger slice of the fast-growing market for diagnostics services that cater to household pets and farm animals.
The deal announced Wednesday reflects Zoetis’ expectation that the diagnostics category will grow at a faster pace than the broader animal health industry.
Abaxis — which makes blood and urine tests to predict, detect and treat diseases such as heartworm, Lyme disease or tick-borne infections — will also help its New Jersey-based acquirer bolster its presence in overseas markets.
Zoetis faces much lesser competition internationally than in the United States, its Chief Executive Officer Juan Alaix said on a conference call with analysts.
“The characteristic of patients in animal health is that they don’t speak. So in our industry, almost every animal getting into clinics needs to have a diagnostic test,” Alaix said.
The veterinary diagnostics market worldwide is expected grow to $3.6 billion in 2022 from $2.3 billion in 2017, according to research firm MarketsandMarkets.
By contrast, the global animal medicines and vaccines market is worth around $30 billion, according to veterinary consultancy Vetnosis.
Much of Zoetis’ revenue is driven by its animal dermatology business, and diagnostics contribute just under 1pc of its overall annual revenue of more than $5 billion.