Zoetis CEO Kristin Peck sits down with Jim Cramer

OK, I love pets. I just love them. And right now, I think there are a lot of opportunities in the humanization of pets teams, which is why can I want to talk about Zoetis, which is a major player in the animal health space. Yesterday, the stock jumped more than 3%. If we learned that arrival, Elanco will be delaying the launch of their competing canine, a dermatitis drug and it's going to need a safety warning label. In early May, Zoetis also reported great quarter. Still, the stock remains down within 12% for the year. So what do you make of this one, which is partly on the new Highless? Let's take a close up with Kristen Peck. She's the CEO of Zawetas to learn more. Miss Beck, welcome back to may of money. Hey, it's great to be back to him. Good to see you. OK, so Kristen, first people, I want to tell people at home, the reason why I'm not going to grill you on the quarter is you are in the quarter and the law says you can't talk about the numbers, but there's no nobody says you can't talk about the pipeline and how you're doing from the previous quarter. I was your, the Apoquel was introduced on our show many, many years ago and I didn't even understand that that there could be blockbusters for pets. Is there was a sense that maybe it wouldn't be that a rival come in it looks like. So you're going to withstand the challenge. Yes, I mean, first of all, Apoquel is the number one product for atopic dermatitis. We took a market that was $70 million and we've made it a $1.5 billion market. I mean, Apoquel is a phenomenal drug. It's been on the market, as you know, for 11 years. We got rid of the Elizabethan collar, which you've always talked a lot about because we all suffer from when they're wearing the collar, you, your heart goes out. They can't tell you if we know what's, you know, they can't. When they knock their heads, that's all over. And it's a real medical condition. It's more than an annoyance. And we have 11 years of data. Our product is safe and efficacious. So this is a really critical category. I think we really helped build it. We've leveraged direct consumer advertising. We've been leveraged auto ship, which I know you spoke about earlier this week on your show as well. So I think we're really proud of our safety and efficacy record for Apoquel. But it's not all that you have and you've got others that are are just, you have got the Simperica Trio that is incredibly strong. Yeah, I mean we're really proud of Zoetis to have three of the top five selling animal health medicines. We have Apoquel. We also have Cytopoint, which is a monoclonal antibody for atopic dermatitis and Simperica Trio, which is phenomenal. It's a triple combination product for dogs, for parasites, for fleas, ticks and heartworm. I only mentioned that's what we've been doing this week, the dog those got their shots this week and we also use your product. I did want to point out that Elanco, which I think look, I know that you never slide competition, but it would have been great if their drug did not have a warning label from the point of view of them. But it, it's, it happens. This is a very hard drug to make. Well, look, I mean, I think what I'm really proud of and you and I have talked about this, you know, many times. We're the number one leader in innovation and R&D. We have spent $5 billion since we IPO building that R&D. And what makes us so successful is the thoughtfulness of our commercial teams, our R&D teams, our regulatory teams, and as we thought about the development of our products, really ensuring we balance safety and efficacy. And as you look at a product like Apoquel, you know, we're really proud of that safety and efficacy and that and that data that we have that supports that. Absolutely. Now you have also taught me a lot about illnesses for non companion animals, for livestock. I remember once when you explained to me the way that some of these flus work and how they're not like human flus, they're different. Tell me about this bird flu situation. We usually don't hear about these things until when you realize it's impacting the food supply around the world. Yeah. I mean, you and I've been talking about bird flu for years. We talked about it. I think, you know, many years ago as we saw avian influenza start to emerge. And I think what people are talking about now is it's moving species. It's gone from poultry into livestock. And I think what you're talking about right now is a lot of the attention now as well in dairy. And we know we're partnered with both the USDA. I met with Secretary Vilsack a few weeks ago to really look at how we can better support both the USDA as well as, you know, our customers. We've started development for clinical trials for, you know, using a vaccine in dairy cattle in case that ends up being needed. But right now, we're just going to support our customers in the USDA to be able to have whatever strategy they think makes the most sense. There was a time before we got in kind of a cold trade war that I thought you were also the expert in help in helping what looking what's going on in China? Do we have any? Is everything so out of kilter that even when it comes to animals that we don't speak to the Chinese about these kinds of things? Look, the exported market is quite important. As you look at the livestock industry in the US and especially as you look at poultry, we're close to 25% of the poultry market is exported. And I'd love to say that all the tariff decisions around the world and trade decisions are made on science, but we all know that's not always how it is. So sometimes you see markets around the world use any excuse they can, you know, And it seems a shame that sometimes vaccinating animals for different diseases can make an animal not be able to export it to a market. OK. Now we have been big believers that something has changed here because we've also been supporting Chewie ever since. Was it 19? We had kind of an over earning for the pet, for companion animals because during COVID and then things went way, way down. And then we had Chewy on in December. They said, listen, it's starting to perk up. The the veterinary business is starting to perk up. We're getting back to some sort of normal baseline. Is that what is that what you're seeing too? You know, what we're really seeing is that animal health consistently is more resilient than other industries. And you know, 86% of pet owners would pay whatever it took to take care of their pets. Even if you asked a pet owner, if I had a 20% decrease in your take home pay, would you spend less to care for your pet? And the answer is a resounding no. And if you look at Zowetis's performance over the last 11 years with an 8% compan annual growth rate on the top line, I think it underscores we're an incredibly resilient industry. And when you're Zowetis and you bring the level of innovation that we bring to the market, I think it really is incredibly durable. And as we look at the consumer right now, when it comes to animal health, we do not see a demand issue. If anything, as you know, in our sector with the veterinary workforce issues, we're more concerned about supply than we are about demand. And is your question interesting that Walmart takes out the 51 human clinics and then goes all in on pets because I think they know how important this growth industry is to America? Well, as you and I talked about it a few months ago, I'm really excited about the different business models you're now seeing in animal health at different, you know, locations, whether it be, you know, Walmart or telehealth or high end concierge clinics. There's really a different value proposition for every consumer. And I think that's really critical given the humanization of pets that we want to make sure that pets can be taken care of no matter how much money you have. And that's whatever. Since the spin off. We also we had Ray model like song for when the spin off occurred. I said look, which is the big one, but then that people thought that was because I like Purina Catchow so much 'cause I had 6 cats at the time. But I just know that you have been a great spokesperson for the industry. That's Kristen Peck, CEO of Zowetis ZTSI think have been held back by that Elonko drug. Elonko was hurting the stock. OK, And that's no longer the case. Bad money's back here for the Coming up, a company that's keeping it 100. Kramer mines for Tech Insights next.