From Consolidation to Companion Revolution?

December 23, 2025

The animal health industry is undergoing a profound transformation, characterized by robust innovation and sustained growth despite significant consolidation. Drawing from my extensive experience in corporate roles and ongoing consultancy work—where I remain deeply connected to the sector—I have observed this evolution first hand. A decade ago, many of us believed new molecular discoveries were unlikely due to high costs and limited focus from major players. Recent developments have proven otherwise. Strategic investments by leading companies such as Zoetis, MSD Animal Health, Elanco, and Boehringer Ingelheim have driven remarkable advancements, particularly in companion animal health.

The market today is highly consolidated, with the top 10 companies accounting for approximately $35 billion in sales—over 70% of the reported segment. The top four alone contribute around 55%. While consolidation raises questions about competition and innovation, my perspective remains optimistic. This structure has enabled greater R&D scale, resulting in meaningful breakthroughs. Monoclonal antibodies now address life-threatening conditions like canine parvovirus and oncology in pets, reducing reliance on off-label human medications (though options remain limited). Long-acting therapies for pain, allergies, and parasites have become standard, significantly improving clinical outcomes.

Financial performance reflects this momentum. Data in the sector is fragmented across numerous sources, but through years of meticulous collection and analysis—harnessing AI tools for processing while I guide the methodology and assumptions—I project the reported segment from major companies to reach $47–48 billion by 2025. I approach projections conservatively, factoring in realistic growth rates and potential macroeconomic headwinds. Including regional and local players (over 50 entities, many with limited global reach), the total market aligns closely with this figure.

A key indicator of the industry's innovative strength lies in the composition of its portfolio: at least one-third of the products from major players are either truly novel or protected by intellectual property, reflecting substantial investment in R&D. Moreover, the top 20 products alone likely generate over $10–12 billion in annual sales, with 13–14 of them benefiting from active IP protection. This underscores a vital lesson for the sector—patient, focused development efforts and commitment to innovation ultimately pay off, rewarding those companies that prioritize long-term scientific advancement over short-term gains.

Consolidation stems largely from the absence of substantial new capital entrants (beyond occasional private equity like EQT) and the short investment horizons of financial players, who prioritize operational efficiencies over long-term R&D. This model is understandable but often overlooks broader opportunities in a dynamic sector facing complex challenges—from pricing pressures and regulatory requirements to veterinary practice consolidation.

Pet humanization continues to accelerate growth. With 350–400 million cats and dogs worldwide increasingly treated as family members, the companion segment holds immense potential. Adjusting for body weight and care intensity, treatment paradigms could mirror those for 100–150 million humans within 10–15 years. To illustrate this long-term upside—purely hypothetical and aspirational, far from today's reality—I've outlined a "dream scenario" for 2035 (below, 2 tables for dogs and cats by major conditions). These figures represent what the market might look like if companion care evolves to approximate select human health segments (adjusted for feasibility). They are highly speculative, may never materialize, and serve only as thought-provoking benchmarks based on current trends extrapolated conservatively.

"As I told you, these are highly speculative figures, and I am fully aware that they are extremely unlikely to materialize, regardless of any scientific or statistical interpretation. (That said, should your marketing team ever consider incorporating these into budget planning, I strongly recommend thinking twice—or perhaps consulting a financial advisor first.)"

Through numerous consultancies, I've engaged with talented professionals deeply passionate about animal health. Many recognize the untapped potential yet hesitate on strategic risks. The future of consolidation may hinge less on the top four (whose paths are clear) and more on mid-tier players like Ceva, Virbac, and Dechra—their focus, investor support, and willingness for bold moves will shape outcomes.

The industry remains modest in scale but rich in opportunity. New entrants with fresh perspectives could still emerge and claim meaningful share.

What are your thoughts on consolidation's impact or the companion market's trajectory? I'd welcome discussion in the comments.

#AnimalHealth #VeterinaryMedicine #Innovation #MarketTrends #PetCare

Wishing you all a joyful Christmas filled with warmth, good health, and cherished moments with loved ones—both human and furry. Here's to a bright 2026 for the animal health community!

(Note: This article was crafted in collaboration with AI tools for data organization, projections, and formatting; the vision, insights, direction, and final wording are entirely mine, driven by my passion and years of direct experience in the industry.)

Grateful for the contributions of key players shaping the animal health industry. Tagging some leading organizations to hear their perspectives: @Zoetis @Elanco @BoehringerIngelheimAnimalHealth @MSDAnimalHealth @Dechra @CevaAnimalHealth @Virbac @PhibroAnimalHealth @WorldOrganisationforAnimalHealth @Bimeda @Hipra @Idexx @Vetaquinol @Norbrook @AVMA

What are your views on the future of animal health? Let's connect and discuss.