Biotech Values

[DewDiligence]

Zoetis (ZTS) IPO prices at $26/sh (above expected range):

http://www.reuters.com/article/2013/01/31/zoetis-idUSL1N0B0KGO20130131

Pfizer Inc's animal health subsidiary Zoetis raised $2.2 billion in its public offering on Thursday, becoming the largest IPO from a U.S. company since Facebook.

Madison, New Jersey-based Zoetis, which priced 86.1 million shares at $26 according to an underwriter, is now valued at around $13 billion. Shares of the company, which sells an array of products for livestock and domestic pets, were expected to price in a range of $22 to $25.

…The deal was between 10 and 20 times oversubscribed, according to a source with direct knowledge, meaning demand for the deal was very high [no kidding].

Zoetis, with annual sales of about $4.2 billion and 9,000 employees worldwide, is the largest player in the $22 billion animal health industry. It sells vaccines, diagnostics, anti-infectives and other medicines.

About two thirds of its sales are from products and services for livestock, including dairy and beef cattle, pigs, poultry and sheep. [Products for cattle comprise 38% of total revenues, according to the roadshow materials.] Its pet products include Revolution, a heartworm and flea-control medicine for cats and dogs, and Palladia, a cancer drug for dogs. The business began in 1952 as the Agriculture Division of Pfizer, and has steadily grown through in-house research and almost a dozen acquisitions, including the animal health units of rival drugmakers.

…Zoetis has operations in 60 countries, including emerging markets in Asia and South America. [61% of sales were ex-US in 2011 (the most recent full year for which data are available)].