In a move that rocked the animal health industry, the European Commission has launched an investigation into Zoetis Inc (NYSE: ZTS). The probe is centered on allegations that Zoetis impeded the market entry of a competitor’s pain medication for dogs.
Zoetis stands as the purveyor of Librela, a groundbreaking monoclonal antibody medication endorsed for alleviating osteoarthritis-related pain in canines across Europe. The monthly administered drug provides a pioneering option for pain relief, especially poignant for aged dogs.
The European Commission’s concern stems from Zoetis acquiring another pain alleviation product, poised for a market launch by a third-party entity in the European Economic Area (EEA). Anticipation was high for this product to offer an alternative pain management solution for the furry companions.
However, fears have arisen that Zoetis might have violated EU competition regulations. Allegations suggest that Zoetis’s actions, including suspending development of the rival product and declining its transfer to the rightful third party, could have infringed antitrust laws.
The pharmaceutical giant countered these accusations, as Reuters revealed that the issue originated from an experimental compound procured by the company seven years prior. Zoetis maintains that the compound acquisition and subsequent development cessation adhered to legal protocols and due diligence standards.
Margrethe Vestager, Executive Vice President overseeing competition policy, articulated the importance of fostering competition in veterinary medication. She underscored the significance of offering pet owners a spectrum of safe, innovative, and affordable options. Vestager hinted at the investigation’s objective—to scrutinize whether Zoetis unlawfully barred a potential competitor in the realm of chronic pain management for dogs.
Current Market Performance: ZTS shares are currently marked at an impressive 1.25% surge, standing firm at $167.75 as of the latest market update on Wednesday.
Image Source: Shutterstock
