Jonathan Block, Managing Director at Stifel, Nicolaus & Co., Inc., Interviews with The Wall Street Transcript: Veterinary Point-of-Care Diagnostics Outpace Reference Labs

Wall Street Transcript

67 WALL STREET, New York - July 12, 2013 - The Wall Street Transcript has just published its Pet and Animal Care Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Improving Pet Acquisitions - Heightened Competition Among Medication Providers - Resiliency To Discretionary Spending Trends - Competition From Big-Box Retailers

Companies include: Patterson Companies Inc. (PDCO), Henry Schein Inc. (HSIC), IDEXX Laboratories Inc. (IDXX), Abaxis Inc. (ABAX), VCA Antech Inc. (WOOF), DENTSPLY International Inc. (XRAY), Align Technology Inc. (ALGN), Sirona Dental Systems Inc. (SIRO), Wal-Mart Stores Inc. (WMT), Quest Diagnostics Inc. (DGX), Laboratory Corp. of America Ho (LH), Heska Corp. (HSKA) and many more.

In the following excerpt from the Pet and Animal Care Report, an expert analyst discusses the outlook for the sector for investors:

TWST: How would you describe the competitive landscape for the veterinary industry, and what gives a company a strong competitive advantage in your mind?

Mr. Block: Yes, and that's one thing that when I started at Stifel in September, and we rolled out coverage of the vet and dental markets in November, I spoke about to our sales guys and clients. I think overall the vet industry is getting more competitive, and what I mean by that is if you go back about five years ago, there was a nice sort of duopoly at the reference lab, which was largely IDEXX and VCA. Of course they competed, but it was a duopoly, and for the most part everyone behaved themselves.

Then if you looked to in-clinic or the point-of-care, it was largely another duopoly between IDEXX and Abaxis. If you fast-forward to today, you've got to look at some of the changing dynamics. In other words, at the reference lab, Abaxis is a recent third entrant and largely competing on price.

At the point-of-care, you have Heska (HSKA). They were there in the past, but have since strengthened their bundled offering by buying a digital radiography company as well as ultrasound. You mentioned earlier the agreement that IDEXX had, the exclusivity that has now gone nonexclusive.

Abaxis over the years has built out their portfolio by adding stuff such as rapid assays, reference lab and i-STAT. So I think the landscape today in the vet world amongst a lot of these manufacturers is more competitive than where we were three to five years ago.

TWST: Aside from the economy, what are the key headwinds you're monitoring for the vet industry this year?

Mr. Block: I think a lot of it's going to come down to...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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