Animal health companies expand into high-growth treatment markets

Three major pet health players are investing in cancer diagnostics and treatments for pets, pointing to it as a key growth opportunity in the industry. These efforts accompany research, development and the launch of innovative treatments that target chronic and dermatological diseases. 

Executives from Elanco, Zoetis and IDEXX Laboratories discussed these opportunities at recent healthcare conferences, sharing concerns about access to veterinary care and rising competition, while presenting pricing and patent-protection strategies.

However, the companies reported mixed financial results. Elanco recorded strong second-quarter growth, and IDEXX benefited from rising diagnostics utilization, but Zoetis sales fell due to a “more pressured companion animal market.”

Oncology development

IDEXX is expanding its Cancer Dx platform as demand for cancer testing grows. The company initially launched the platform to detect lymphoma. According to CEO Mike Erickson, the initial tests could detect this type of cancer up to 8 months before any clinical signs, with “99% plus specificity, 79% sensitivity.”

After that, it plans to expand the platform into a “multi-cancer panel” that will also detect mast cell tumor and hemangiosarcoma (cancer of blood vessels). “These are 3 of the most common and most dangerous cancers, covering 40% of all the cancers in dogs,” Erickson said, adding that IDEXX expects the solution to be available by the end of this year. 

Elanco and Zoetis also see a growing opportunity in oncology, driven partly by pet-owner behavior. “We’re chasing oncology. We need a broad-spectrum oncology product that’s cost-efficient. That’s going to be a big market for us coming up,” Elanco CEO Jeff Simmons says. 

Zoetis, which produces Palladia tablets for the treatment of cutaneous mast cell tumors in dogs, says owners are already testing their pets ‘aggressively’ for cancer even when no treatment is available, suggesting demand could increase if more therapies reach the market.

According to Zoetis CEO Kristin Peck, any cancer medication launched needs to be safe enough to be administered by general-practice veterinarians. The executive also says Zoetis has 2 products in the pipeline. 

Chronic conditions and diagnostics 

Other complex diseases are also attracting investment. Elanco’s CEO says companies are competing to develop treatments for chronic kidney disease (CKD), as between a quarter and a third of cats are estimated to develop renal failure.

Zoetis is also targeting CKD. “There really are no treatments for renal and chronic kidney disease. So this is a huge addressable market of $3 billion (€2.7B). And what we’re really focused on is multiple products and multiple diagnostics and biomarkers,” Peck says.

One of its products, targeted for approval by the end of 2027, aims to slow disease progression and prevent kidney damage, the CEO explains, adding that the company is also working on products that will treat symptoms of late-stage disease. “It’s the most near-term opportunity we’re looking at, but it’s also the biggest.”

IDEXX has seen good momentum in diagnostics, with growth in diagnostic frequency and utilization during the second quarter (Q2) among its partners. Its Companion Animal Group’s diagnostics recurring revenue grew 11% year over year on a reported basis, supported by increased diagnostics utilization. 

Competition in dermatology

While Elanco celebrated strong results in the dermatology category, Zoetis expressed concern. According to CEO Jeff Simmons, Zenrelia, a once-daily prescription oral treatment for allergies and atopic dermatitis in dogs, was the “single largest contributor to global Elanco growth” in Q2. He added that the international dermatology market grew 9% in the first half of 2026. 

Simmons used Brazil as an example, where the treatment reached more than 50% market share within 18 months. The season when dogs experience allergy-related itching in Europe has expanded from 3-4 to 5-7 months as weather patterns change, Simmons says, helping Zenrelia gain 10 percentage points of market share in the region during the first half.

Zoetis, on the other hand, felt the impact of higher competition. “We have been the market leader in some of the key categories that now have new competition. And in a world that’s not growing, that competition when you have close to 100% share in something like derm is coming out,” Peck says.

Peck notes increased competition against Apoquel. Zoetis is expanding its dermatology portfolio and expects US approval for long-acting Cytopoint Plus by the end of 2026. 

Some products in this line are under patent protection until 2032. “We have a decent amount of time in the Apoquel film-coated tablets. So we’ll continue to invest. There are still 16 million untreated dogs in the US with dermatological conditions; we think there’s a lot of room to grow,” she adds.

Innovation supports pricing

Companies are using product differentiation to protect pricing and market share. Elanco says its price growth accelerated in July and August, supported by what it described as medical differentiation. 

A survey the company conducted in May of 1,400 US pet owners found that 86% planned to spend the same or more on pet health. The manufacturer uses this data to support its pricing approach, although it says targeted promotions remain common, particularly among corporate veterinary practices.

Zoetis is taking a similar approach, saying targeted promotions generate a higher return on investment than broad list-price changes or general promotions.

Mixed financial results

New Jersey-based Zoetis posted revenue of $2.5 billion (€2.2B), flat year over year on a reported basis, and net income of $691 million (€617M), down 5%.

The company’s CEO attributes the weaker results to a “more pressured Companion Animal market, lower clinic visits, pet owner price sensitivity and heightened competition in key categories.”

Headquartered in Indianapolis, Elanco posted revenue of $1.4 billion (€1.25B), a 10% YoY jump, while net income was $54 million (€48M), up almost fivefold from 2025. According to Simmons, Pet Health revenue rose 12% on a reported basis, or 11% on an organic, constant-currency basis, driven by both price and volume. 

Apart from Zenrelia, the CEO also highlighted Credelio Quattro, which Elanco says is the “first and only monthly chewable tablet to protect against ticks, fleas, heartworm disease, roundworms, hookworms and tapeworms” in dogs.

Diagnostics provider IDEXX Laboratories’ revenue reached $1.2 billion (€1B), up 10% YoY, while net income rose to $338.4 million (€290M), up about 15%.