Navann Ty

Navann Ty inquired about the specific drivers behind the outperformance of the Zoetis MFA portfolio and sought clarification on whether the $10 million negative impact on the legacy MFA business in Q2 2026 is expected to fully recover in Q3. She also asked for an update on the commercial traction and veterinary feedback for Restoris since its launch in the companion animal segment.

Answer

Glenn David, Chief Financial Officer, confirmed that the $10 million impact on the legacy MFA business is expected to return in the second half of the fiscal year. Regarding the Zoetis MFA outperformance, Mr. David attributed it to tremendous execution and integration by the team, leading to market share gains. Larry Miller, Chief Operating Officer, added that the team's focus on customer needs, particularly for animals growing to heavier harvest weights, and the value customers place on protecting animals at historic high values, contributed to strong receptivity. Donnie Bendheim, EVP of Corporate Strategy and CEO Designate, noted that Restoris's launch has proceeded according to plan, with positive interest and excitement from the veterinary community at recent conferences.

Navann Ty asked about the specific drivers of the Zoetis MFA portfolio's outperformance and sought clarification on whether the $10 million impact on the legacy MFA business is expected to fully recover in Q3. He also inquired about the commercial traction and veterinary feedback for the Restoris companion animal product since its recent launch.

Answer

Glenn David, CFO, confirmed the $10 million legacy MFA impact is expected to return in the second half of the year. He attributed Zoetis MFA outperformance to strong team execution, effective customer interactions, and market share gains. Larry Miller, COO, added that focusing on segment shifts, promoting product indications for longer feeding trends, and high animal value contributed to customer receptivity. Donnie Bendheim, EVP of Corporate Strategy and CEO Designate, stated Restoris's launch was on plan, noting positive foot traffic and interest at VMX and upcoming Western Vet Conference, indicating excitement within the vet community.

Navann Ty from BNP Paribas asked about the expected growth of the legacy MFA business and whether it would outpace the market. He also inquired if there was any evidence of sales pull-forward in international markets ahead of potential tariffs.

Answer

CFO Glenn David responded that the legacy MFA business is expected to grow in the flat to low single-digit range, consistent with a mature market, as reflected in the fiscal 2026 guidance. He stated that while the company strategically purchased inventory ahead of potential tariffs, they do not believe there was any customer sales pull-forward, and the Q4 results represent true underlying demand.

Navann Ty of BNP Paribas noted that his intended questions regarding the guidance for the Zoetis MFA acquisition and the company's strategic priorities following the discontinuation of the atopic dermatitis product had already been addressed by previous questions.

Answer

As the analyst's questions were previously answered, no new information was provided by management in response. The key topics of interest were the financial outlook for the Zoetis MFA portfolio and the company's R&D strategy.

Navann Ty asked for details on the integration plans for the pending Zoetis acquisition and inquired about the completion and terms of the recent debt refinancing, specifically regarding its structure to support the deal.

Answer

CEO Jack Bendheim explained that the company is working with third-party consultants on the Zoetis integration to ensure a smooth transition and is building internal resources to support the expanded business in China and the U.S. beef market. He also confirmed the debt refinancing is complete and includes a $350 million delayed draw loan specifically to fund the Zoetis acquisition upon its closing.

Navann Ty inquired about the revenue contribution of MyDay private label contracts in APAC throughout 2026 and 2027. He also asked for more details on the recently improving cycles in the fertility business, changes in the competitive landscape, and new technologies clinics are interested in.

Answer

President and CEO Al White explained that MyDay private label momentum, now expanding to EMEA and the US, will build through Q3 and Q4 as contracts are executed, leading to stair-step improvements in sales. For fertility, he mentioned three new genomics tests launched at ASRM, other technology advancements in genomics and capital equipment, and super exciting R&D in the coming years, noting improving cycle activity in the U.S.

Navann Ty of BNP Paribas asked for clarification on the drivers behind the expected Q4 rebound in the Fertility business and requested a qualitative outlook for the segment in fiscal 2026.

Answer

President and CEO Al White clarified that he expects another 'pressured quarter' for Fertility in Q4 due to a very difficult comparison to the prior year's 13% growth. However, looking to fiscal 2026, he expressed optimism, expecting improvement as cycles in Asia-Pacific rebound post-'Year of the Snake' and as clinics, which have been delaying purchases, begin to invest in equipment upgrades again.

Navann Ty asked about Cooper's fertility revenue mix, noting that a fertility pharma company did not revise its global guidance despite softness in China, and questioned if this was due to a difference between consumables and therapeutics.

Answer

President & CEO Albert White drew a clear distinction, stating that Cooper's fertility business consists of consumables, genetic testing, and capital equipment, with no exposure to fertility pharma products. He explicitly advised against linking the performance of the pharma market to Cooper's device and consumables market.

Navann Ty from BNP Paribas asked for more details on Cooper's private label contracts, such as customer concentration and duration, and inquired about observations since the approval of a competing low-copper IUD for PARAGARD.

Answer

CEO Al White described the private label business as a diverse portfolio with many long-term contracts, some extending up to 10 years but many in the 2-5 year range, often involving multiple brands even within the same customer. Regarding PARAGARD, he reiterated that the competitor's product was recently approved and the company is in a 'wait and see' mode while continuing to execute its own strategy.

Navann Ty asked if CooperVision has enough visibility on its manufacturing capacity to resume more product launch activities. He also inquired if the new single-hand inserter for PARAGARD serves as a key differentiator against upcoming competition.

Answer

CEO Al White confirmed that the company is making great progress on capacity, has good visibility, and is actively evaluating incremental launch opportunities. Regarding PARAGARD, he stated the new inserter puts the product "on par" with other IUDs in the market, making it more competitive by improving its ease of use for practitioners.

Navann Ty asked about the pricing and promotional strategy for Zenrelia and Credelio Quattro, including the extent and duration of promotional activities. She also inquired about the status of governmental incentives for Bovaer and the progress on pivoting to a productivity focus for the product.

Answer

Jeff Simmons, President and CEO, explained that Zenrelia in the U.S. was initially priced at a 20% discount due to its label, but as its value profile grows, Elanco intends to price to value. He noted that the European label is different, and strong value is already being observed there. For both Zenrelia and Quattro, the increased investment involves a multi-pronged approach including multimedia, an expanded sales force with incentives, and distribution partnerships, which will continue as a 'lean-in' strategy. Regarding Bovaer, Simmons confirmed the absence of governmental incentives in 2025. He highlighted the strong demand from CPG companies, which are utilizing Bovaer to support their brands and paying for it through an inset market, thereby benefiting dairy producers. This strategy, which previously saw $10 million flow from CPG companies to producers in a prior quarter, will continue.

Navann Ty from BNP Paribas asked about the pricing and promotional strategy for Zenrelia and Credelio Quattro, including the extent and length of promotional activity. She also inquired about the status of governmental incentives for Bovaer and progress on pivoting to a productivity focus.

Answer

President and CEO Jeff Simmons explained that Zenrelia was initially priced at a 20% discount in the U.S. due to its label, but Elanco aims to price to value as its profile grows. For both products, increased investment includes multimedia, sales force expansion and incentives, and distribution, forming a multi-pronged 'next-gen commercial' strategy. For Bovaer, Jeff Simmons confirmed the absence of governmental incentives in 2025, noting strong demand from CPG companies that are utilizing Bovaer to benefit dairy producers through an 'inset market' strategy, which will continue.

Navann Ty of BNP Paribas inquired about the progress of the Beauvaire methane-reduction product, specifically regarding government incentives. He also asked how the newly approved Advantage collar will be positioned relative to the premium Seresto collar and questioned the company's long-term capital allocation priorities once the leverage target of under three times is achieved.

Answer

CEO Jeffrey Simmons explained that the Beauvaire strategy has pivoted from focusing on grants to emphasizing direct economic value for farmers and brand value for CPG companies, which is proving successful. He positioned the 4-month Advantage collar as a way to offer more forms at different price points to expand the overall retail portfolio. CFO Bob VanHimbergen reiterated that debt paydown remains the primary priority, and the company will only consider broader capital allocation flexibility after reaching its long-term goal of under 3x leverage.

Navann Ty inquired about quantifying the dermatology portfolio's performance impact from distributor inventory dynamics versus competitive pressure from Zenrelia and Numelvi. She also asked when signs of Librela stabilization were observed and what factors are driving this trend.

Answer

Wetteny Joseph, Chief Financial Officer, stated that distributor inventory levels were not a significant factor for dermatology, noting a $10 million contribution from Apoquel stocking. He confirmed that competitive patient share gains from Zenrelia were in line with expectations and limited. Kristin Peck, Chief Executive Officer, reiterated that recent signs of sequential stabilization in Librela give confidence that actions are working and it will return to growth in 2026, based on rolling trends observed over four to six weeks.

Navann Ty from BNP Paribas asked for a quantification of the derm portfolio's performance impact from distributor inventory dynamics versus competitive pressure from Zenrelia and Numelvi, and inquired about the timing and drivers of Librela's stabilization.

Answer

CFO Wetteny Joseph clarified that distributor inventory levels were not a significant factor, with Apoquel stocking contributing approximately $10 million to U.S. dermatology figures. He stated that Zenrelia's patient share gains were limited and in line with expectations, not a key differentiator from prior forecasts. CEO Kristin Peck reiterated that recent sequential stabilization in Librela trends, observed over four to six weeks, gives confidence that the company's actions are working and will lead to a return to growth in 2026.

Navann Ty asked for an update on the approval timeline for the long-acting osteoarthritis (OA) pain therapy and requested details on the new product's profile, including its dosing frequency and potential safety profile.

Answer

CEO Kristin Peck confirmed that Zoetis still expects approval for its long-acting OA pain therapies for both dogs and cats in a major market this year. She described the new product as a three-month injectable monoclonal antibody that is a new molecule targeting a unique binding site, allowing for a 10x lower dose. She could not comment on a future label but expressed excitement for the innovation.

Navann Ty of BNP Paribas asked about the specific levers Zoetis is using to defend Apoquel against new competition, promotional plans for other parasiticides, and progress on its long-acting injectable pipeline.

Answer

CEO Kristin Peck stated that the strategy for defending Apoquel remains unchanged, focusing on its 11-year safety and efficacy profile, deep customer relationships, and DTC investment, without needing new tactics. She noted that new entrants typically grow the overall market. Regarding innovation, she confirmed that long-acting injectables across key franchises are an important near-term growth driver, though specific launch timelines have not been provided.

Navann Ty asked about current trends across the U.S. med spa, plastic surgery, and dermatology channels and requested details on the structure of the upcoming 2026 provider loyalty program.

Answer

CEO Marla Beck described the specialty facial category as strong, with providers using HydraFacial as a key traffic driver, leading to double-digit growth in some large national accounts. Regarding the 2026 loyalty program, she explained it will be simplified, feature more incremental benefit levels for the 93% of providers enrolled, and be structured to incorporate new product lines like skincare and back bar items.

Navann Ty from BNP Paribas asked for clarification on the toxin demand slowdown, noting that competitors had not highlighted similar trends. He also questioned the strategy for achieving second-half Jeuveau revenue targets, particularly regarding promotional activities.

Answer

President & CEO David Moatazedi stated that third-party data confirmed a market decline and pointed to the market leader's performance as evidence. He explained that Evolus adjusted its promotional strategy, using the Evolus Rewards program and media collaborations to subsidize consumer costs and drive pull-through at the clinic level to support second-half performance.

Navann Ty questioned the basis for management's confidence in reiterating the 2025 revenue guidance, asking if it was based on expected outperformance from ex-U.S. markets or higher-than-expected Evolysse sales. He also requested early metrics to compare the Evolysse launch against the initial Jeuveau launch.

Answer

CFO Sandra Beaver explained that confidence in the guidance stems from the company's accelerated market share gains, which have more than offset slower market growth. She noted that gaining 1% of market share is seven times more impactful to revenue than 1% of market growth. CEO David Moatazedi added that while it's too early for revenue figures, early Evolysse launch metrics, such as webcast attendance and trial program deployment, are significantly outperforming those seen during the Jeuveau launch, indicating a very fast start.

Navann Ty from BNP Paribas inquired about recent pricing trends for Jeuveau, the company's market share, and its initial thoughts on the U.S. toxin market outlook for 2025.

Answer

CFO Sandra Beaver responded that Evolus has continued to opportunistically increase Jeuveau's price while gaining market share, which reached approximately 13% at the end of Q3. Regarding the 2025 outlook, she stated it's too early for specific projections but expects the overall toxin market to maintain healthy mid-to-high single-digit growth.

Navann Ty of BNP Paribas inquired if the sales force had communicated the upcoming InVue Dx FNA (fine needle aspirate) expansion to customers, asked about the revenue contribution from CancerDx, and questioned how competitors are reacting to these recent innovations.

Answer

President and CEO Jay Mazelsky confirmed that customers are broadly aware of the future FNA capability but are buying InVue Dx based on its current menu. Both Mazelsky and CFO Andrew Emerson stated that revenue for new innovations like CancerDx is not broken out. Mazelsky characterized the competitive landscape as unchanged, emphasizing that IDEXX must continue to earn customer loyalty by expanding its portfolio.

Navann Ty asked if the sales team had communicated the upcoming FNA menu expansion for InVueDx to customers, inquired about the revenue contribution from CancerDx, and questioned how competitors are reacting to these new innovations.

Answer

CEO Jay Mazelsky confirmed that customers are broadly aware that the InVueDx menu will grow over time but are purchasing the instrument based on its currently available ear cytology and blood morphology tests. Both Mazelsky and CFO Andrew Emerson reiterated that the company does not break out revenue for specific new products. Mazelsky concluded that the overall competitive landscape has not fundamentally changed, and IDEXX continues to compete for every deal.

Navann Ty asked how innovations in affordability, such as payment plans, and IDEXX's own software like Vello could help mitigate lower vet visits. He also requested updated thoughts on sector conditions given the divergence between wellness and non-wellness visit trends.

Answer

CEO Jay Mazelsky noted that most IDEXX instruments are placed via programs with built-in financing, minimizing upfront cash constraints for practices, and positioned Vello as a tool to enhance clinic productivity. Executive Brian McKeon clarified the visit data, explaining that after adjusting for an increase in low-diagnostic pain medication visits, both wellness (down ~4%) and non-wellness (down ~3%) visits are pressured, indicating a broad-based macro challenge rather than a simple divergence.

Navann Ty asked if the Breast Health commercial changes were fully implemented in Q3 and inquired about the current M&A environment.

Answer

CEO Stephen MacMillan confirmed the sales force restructure was largely implemented in Q2 and settled in well during Q3, with a new end-of-life gantry strategy just beginning. Regarding M&A, he said the company remains patient and is focused on finding deals similar to its recent acquisitions, noting the funnel of appropriately sized deals is good.