Pfizer’s animal health unit, Zoetis, soars in IPO

Topics: From the Wires, ,

Shares of Pfizer’s animal health business, Zoetis, surged in their trading debut Friday after the company’s initial public offering of stock raised $2.2 billion — the largest IPO by a U.S. company since Facebook Inc. raised $16 billion last May.

Zoetis shares, trading under the “ZTS” ticker, rose 19 percent, or $5.01, to close at $31.01.

Investors may have been attracted to the animal health company because of its growth potential as people in developed countries spend more on their pets and farmers in developing countries raise more livestock to satisfy growing demand for meat as consumers’ incomes rise. Prices are also stable because insurance plans are rarely involved in setting them, and generic competition is rare.

The spinoff is part of Pfizer’s ongoing effort to appease shareholders. Many have been unhappy since Pfizer, the world’s largest drugmaker by revenue, halved its 32-cent dividend four years ago to help fund its $68 billion acquisition of Wyeth. Pfizer also sold off its nutrition business for $11.5 billion late last year and has been gradually increasing the dividend, so far to 24 cents.

The proceeds from the Zoetis IPO went to retire Pfizer debt.

Pfizer Inc. sold 86.1 million shares for $26 apiece, $1 above the top end of the $22 to $25 range it had estimated for Zoetis. That left it with an ownership stake of at least 80 percent in Zoetis. Pfizer is likely to cut back its stake with further stock sales, said Scott Sweet, senior managing partner at IPOBoutique.com, which invests in IPOs and advises other investors on the deals.

With annual sales of about $4.2 billion, Zoetis Inc. is the world’s largest maker of medicines for pets and farm animals. It invests $400 million in research and development per year, which its CEO, Juan Ramon Alaix, the former president of Pfizer Animal Health, said is the most in the industry. The company is using that money to create new medicines and vaccines, along with new formulations and uses for some current products, and combination medicines.

Among its innovations, as part of Pfizer, the company created an injectable medicine for common bacterial skin infections in dogs and cats, Alaix said in an interview. The one shot spared pet owners the chore of forcing pills down the throat of their dog or cat three times a day, often for weeks, as required with older drugs. It also developed the first Lyme disease vaccine for dogs and a new vaccine to combat Hendra virus, which infects horses and can be transferred to humans.

Like Pfizer and other makers of medicines for people, Zoetis plans to expand in emerging markets such as China to increase growth.

Zoetis is currently based in Madison, N.J., at a campus shared with other Pfizer businesses, but Alaix said it will relocate at some point within New Jersey.

Pfizer shares rose 35 cents, or 1.3 percent, to end at $27.63.

___

AP Business Writer Tom Murphy in Indianapolis contributed to this story.

Next Article

Featured Slide Shows

Gripping photos: The people of the Turkey protests (slideshow)

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11
  • The protests take on a festive element as police forces move out of the park and square. Wearing a gas mask, this young man dances to traditional Turkish music in front of Taksim Square’s Ataturk Monument.

  • In Gezi Park since March 31st, this protester, originally caught off-guard by the Government’s teargas and water cannons, went out and bought a Russian army mask from WWII, preparing for what was to come.

  • This rambunctious boy seems to be enjoying the chaos. After taking this picture he threw a stone at the already destroyed building in the background.

  • Forming a line, the police face off directly with protesters in Taksim Square. After a while, they retreated and there was a general cheer – a back-and-forth dance that has been common since the beginning of this protest.

  • An elderly woman in Gezi Park reads the news. The tent community occupying the park was violently destroyed on June 16th.

  • Many different groups had set up booths to promote their cause in Taksim Square and Gezi Park. Standing in front of one, this man waves his flag while posing with conviction.

  • Many home-remedies are used to minimize the effects of tear gas. This woman has put a milky solution on her face, removing her mask after the tear gas dissipated. Before sunrise, the police came again for another round of teargasing.

  • People capitalize on the uprising -- selling flags, beer, gas masks, sky lanterns and spray paint to name just a few of the popular items.

  • On Monday morning, June 11, the police execute a strong offensive. Many plain-clothed police officers, like the ones seen here, clash with protesters in the side streets away from the main stand-off in Taksim.

  • The authorities seem to be most aggressive in the night, pushing protesters away from the square and park. After being teargassed this young woman catches her breath with other protesters on Siraselviler Street.

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 11

Comments

0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>