Elanco, Zoetis extend losses amid rising bird flu cases
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Animal health companies Elanco Animal Health (ELAN
-0.2%), IDEXX Laboratories (IDXX
-0.4%) and Zoetis (ZTS
-2.3%) have continued their recent losses on Tuesday as the U.S. deals with a rising number of avian flu outbreaks.
After detections among waterfowl in mid-January along the eastern seaboard, the first related outbreak in poultry was reported in Indiana in early February, according to the Center for Infectious Disease Research and Policy (CIDRAP) of the University of Minnesota.
The outbreaks have now spread to Maryland and South Dakota, increasing the number of affected states to 12 this year. The Maryland Department of Agriculture has confirmed the virus as H5N1.
In a statement on Monday, the Centers for Disease Control and Prevention (CDC) said that the current H5N1 bird flu situation is mainly an animal health issue with low risk to humans.
However, according to Citi analyst Navann Ty, the spread of cases could lead to restrictions or lower demand for poultry and reduced flock sizes, which in turn can hurt the poultry businesses of Elanco (NYSE:ELAN) and Zoetis (NYSE:ZTS). Ty projects that U.S. poultry makes up about 5% of Elancoâs (ELAN) total sales.
Elanco (ELAN) and IDEXX (NASDAQ:IDXX) are trading lower for the third straight session, while Zoetis (ZTS) is in the red for the second consecutive day.
The shares of commercial chicken producers such as Pilgrim's Pride (PPC
-1.3%), Tyson Foods (TSN
-0.0%), and Cal- Maine Foods (CALM
-2.3%) are also on the decline.
Animal health companies, except Elanco (ELAN), have underperformed the broader market this year, as shown in this graph.