Investment in Animal Health: Driving Veterinary Innovation and Growth

The animal health industry is undergoing a transformative phase, with investment in animal health unlocking significant opportunities for veterinary innovation. Drawing on proven strategies from human pharmaceuticals, this article examines five pivotal approaches shaping the future of the animal health sector. These insights offer valuable guidance for investors and stakeholders seeking to capitalise on the growing demand for companion animal care, sustainable livestock solutions, and advanced technologies.

Strategic Divestitures in Animal Health Investment

To prioritise high-growth sectors like companion animals, leading firms are divesting non-core assets. For instance, Zoetis sold its medicated feed additive portfolio to Phibro for $350 million, enabling a sharper focus on animal health investmentopportunities. This strategy of portfolio rationalisation is set to continue, particularly in lower-growth livestock sectors, fostering:

• Consolidation: Opportunities for mergers in underserved markets.

• Cross-Species Expansion: Broadening portfolios to include companion and livestock solutions.

Advancing Animal Health R&D Investment

Historically, animal health R&D investment has ranged from 8–12% of revenue, compared to 20–25% in human pharmaceuticals. This gap is narrowing as firms increase investment in innovative modalities like mRNA vaccines and monoclonal antibodies. Boehringer Ingelheim’s new US-based R&D facility exemplifies this commitment to veterinary innovation. Key focus areas include:

• Novel Therapies: Developing mRNA vaccines and monoclonal antibodies.

• Diagnostics: Enhancing tools to address antibiotic resistance and chronic conditions.

Mergers and Acquisitions in the Animal Health Sector

As human biopharma valuations stabilise, animal health investment has become a high-growth opportunity. Major players are acquiring biotech startups to access cutting-edge therapies. Notable examples include:

• Zoetis’ 2023 Acquisition of adivo: Expanding its antibody portfolio.

• Boehringer Ingelheim’s 2024 Purchase of Saiba: Strengthening vaccine development.

Navigating Regulatory Changes in Animal Health

The regulatory landscape for veterinary medicines is increasingly stringent, particularly regarding antibiotic use and sustainability. The EU’s 2022 regulations limiting prophylactic antibiotics and the US FDA’s focus on antimicrobial stewardship drive innovation in:

• Alternatives: Vaccines, probiotics, and precision therapeutics.

• Regional Compliance: Adapting to evolving standards in Asia and Latin America.

  
  

Digital Transformation in Veterinary Care

Digital technologies and AI are revolutionising the animal health sector. Key innovations include:

• AI Diagnostics: Zoetis’ Vetscan Imagyst delivers rapid, expert-level results.

• Wearable Devices: Real-time health monitoring for livestock and pets.

• Telemedicine: Expanding access to veterinary care in underserved regions.

  
  
  
  

Conclusion: Shaping the Future of Animal Health

The animal health industry offers a compelling blend of stability and growth for investors. By embracing strategic divestitures, robust animal health R&D investment, strategic acquisitions, regulatory compliance, and digital transformation in veterinary care, firms can lead the next wave of innovation.