Healthcare for pets is a hot market, with several industry players making million dollar moves to capitalise on the world’s growing number of pet owners.
Australia’s Nexvet, a developer of therapeutics for pets, is one of those, considering listing on the share market in 2014, either in the United States or Australia.
Nexvet has created a technology enabling it to rapidly take a mouse or human antibody and convert it into a product for dogs, cats or horses.
Chief executive Mark Heffernan says many of the increasing number of elderly people, and people living alone, have pets as companions.
Pet owners are also increasingly willing to spend more money on looking after the health of their animals, because they are considered part of the family.
“Internationally, particularly in the US, the animal health market is incredibly hot at the moment,” Dr Heffernan said.
Greencross, the owner of 100 Australian clinics, says the country has one of the highest rates of pet ownership in the world.
Sixty-three per cent of households own a pet, and 53 per cent of households own a dog or cat.
Nexvet’s Dr Heffernan said there was a growing market for animal healthcare in Asia, particularly in China, where having a pet was a symbol of wealth.
Despite a worldwide economic slowdown, the animal healthcare market has prospered.
Animal health company Zoetis – a spin-off from Pfizer – listed on the United States share market in February 2013 after a $US2.2 billion initial public offering.
That was followed by the listing of Aratana Therapeutics.
Dr Heffernan said investors had an appetite for animal health because of several factors.
The path to market was shorter than in human health, the risk profile was significantly lower compared to human health, and the cost to get a product to market was significantly less.
Nexvet’s key market is the treatment of pain in dogs and cats.
Dr Heffernan said the global market for drugs to treat arthritic pain in dogs was worth about half a billion dollars a year.
But those drugs had side-effects such as gastro-intestinal bleeding, ulcerations, diarrhoea and liver toxicity.
Currently there was no drug to safely treat chronic pain in cats because they induced toxicity, but that sector of the market could be worth at least $100 million.
Last week, Greencross and pet retailer Mammoth Pet Holdings announced that they would merge to create Australasia’s largest integrated consumer-facing pet care company.
Mammoth operates under the Petbarn brand in Australia and the Animates brand in New Zealand.
The merged group will operate 124 stores and 100 vet clinics across Australia and New Zealand.
Greencross said the merger would give it a leading position in the highly fragmented pet care and pet services industry, which has a combined market worth about $7 billion in Australia.
Greencross managing director Glen Richards said at the company’s annual general meeting last week that pet owners were visiting the vet earlier and more frequently when their pets were sick, feeding them better quality pet food, keeping up to date with vaccinations and parasite preventatives, and using screening tests for early detection of disease.
