IDEXX points out diagnostic trends in sharp global recovery for vet clinics
13:41 PM | August 19, 2020 | Joseph Harvey
IDEXX Laboratories has highlighted the role veterinary diagnostics are playing in the companion animal market’s ongoing robust recovery.
The company has emphasized the stronger-than-expected comeback being witnessed by vet clinics that are moving back to normal levels of revenues, after the early stages of COVID-19 notably reduced visits.
In an earnings call after the firm's second-quarter results, Jay Mazelsky – IDEXX president and chief executive – stated: "Despite an overall 5% decline in the same-practice visit levels in Q2, vet clinics were able to increase in-practice revenues by 2.5% – supported by an increased emphasis of medical services enabled by diagnostics testing.
"Customers have adapted to new ways of delivering service, such as an increased use of telehealth and curbside checking where the pet owner remains in a car during the appointment. Staff from veterinary clinics have indicated that this has increased their comfort level with recommending more comprehensive and clinically relevant diagnostics with support from pet owners.
"Veterinarians also say they are increasingly focused on delivering core medical services for their patients, as a result of the substitution of product sales to e-retailers, which have accelerated. To treat, veterinarians have to first diagnose, and IDEXX's proprietary diagnostics are a key tool in advancing the standard of care."
IDEXX said these trends have led to an uptick in both wellness and non-wellness visits to veterinary clinics. While a portion of this growth can be attributed to pent-up demand, Mr Mazelsky said there is a "potential change in the delivery of care" with telemedicine and other online capabilities driving visits to the practice and higher uptake of diagnostics.
The firm noted the proportion of clinical visits that include at least one diagnostic test has increased since March in both wellness and-non wellness visits.
The company has also witnessed a greater spend on diagnostics per clinical visit. Mr Mazelsky said the average diagnostic revenues per clinical visit (including at least one diagnostic) was around 5% higher for the first half of 2020 versus the same period last year. Additionally, average diagnostics revenues per critical visit and per non-wellness visit have been higher year-on-year every month in 2020.
IDEXX also highlighted increased interest in pet ownership throughout the pandemic, including among current companion animal owners.
Mr Mazelsky remarked: “These improvement trends are global and have been sustained in early Q3, as evidenced by continued solid US clinical growth trends, albeit at moderated levels from the extraordinary growth rates seen in June.”
Brian McKeon, the firm's chief financial officer, suggested the international veterinary clinic market is also witnessing a v-shaped recovery. He said Europe has seen an overall strong improvement, with individual countries displaying varying trends. While consistent growth has been recorded by IDEXX in Germany and southern Europe, the UK lagged as lockdown measures were implemented at a later date compared to other nations.