IDEXX : Abaxis Competition & Zoetis Integration

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Is there a limit to this bundling strategy from the customer's perception? Even if the sales team is well-motivated and educated to sell both parts, are there limits to the value proposition from the customer's perspective?

It depends on how it's positioned. I wasn't part of those discussions. My role at Zoetis was strictly on the diagnostic side, trying to expand the diagnostic portfolio. I wasn't involved in conversations about positioning pharmaceuticals alongside diagnostics. What I do know is that in the first year, there was a significant leakage of diagnostic business away from Zoetis to IDEXX. They lost many customers because the focus remained on pharmaceuticals rather than diagnostics. This happened back in 2019 and 2020.

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I've read about Zoetis buying a few reference labs. What is the strategy now, and what is the importance of the reference labs in Zoetis's strategy?

You need to provide an offering that allows the customer to conduct testing in their preferred manner, not dictated by you. If the customer wants immediate results on-site or prefers to send it out, they should have that option. Zoetis has invested in some reference labs, but IDEXX has local reference labs everywhere, allowing for same-day turnaround for basic blood results. This doesn't work for Zoetis, as they have to ship blood to regional labs. While Zoetis has entered that marketplace, they are not competing at the same level as Antech or IDEXX in the laboratory business. They lack the infrastructure that those two companies have.

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Regarding the second notion of quality, in my view, it's about the breadth of the test. You mentioned different categories of tests, like hematology and chemical analysis. Within each category, there are numerous panels. Is Zoetis Abaxis able to match IDEXX in terms of the breadth of their portfolio, or is there a significant difference from the customer's perspective?

IDEXX offers a much broader range of point-of-care panels than Zoetis does today, especially in chemistry.

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