Ladies and gentlemen, the program is about to begin. Reminder that you can submit questions at any time via the Ask Questions tab on the webcast page. At this time is my pleasure to turn the program over to your host, Michael Ryskin. Please go ahead. Great. Thanks for joining us. Again, my name is Mike Ryskin. I'm on the B of A Life Science Tools, Diagnostics, and Animal Health team. And joining us for our next session from Zoetis is CFO Wetteny Joseph. Wetteny, thanks again for joining us. Thanks for having me, Mike. Similar format to prior sessions. Shouldn't be any surprises. We're gonna do 40 minutes of fireside chat. Feel free to hit me up with questions via Bloomberg, email, or via the portal, and we'll work them in. Just to kick things off, Wetteny, our standard default Q, you know, opening question is, you know, you recently reported Q4 results, initiated fiscal year 2024 guidance a couple weeks ago. Can you run through sort of the key talking points? What's set up for you as you wrap up 2023, and what's top of mind as you go into 2024? Yeah, Mike, we're very pleased to deliver strong results for the quarter. The fourth quarter came in at 8% operational growth, and that's really the third straight quarter of 8% or 9% operational growth. We saw balanced growth from U.S. The U.S. grew 9% and the international grew about 8%. You saw growth from price as well as volume. Companion animal, third straight double-digit growth rate at 10% as well. Then, last but not least, livestock returned to growth in 2023 in a big way, growing 6% on the quarter as well as 6% on the full year, above the livestock, you know, global market growth rate. So that really capped off 2023 on a strong note. You know, we had strong growth of 7% on the year, clearly growing faster than the industry once again. That's despite, you know, the starting point where we had some destocking in the first quarter, and then we saw some of the challenges in some markets like China, for example, as we went through the year. I think this really highlights our ability to grow faster than the market, and we issued guidance that also reflects that, right? I mean, guidance on 2024 at 7%-9% operational growth, coming from multiple sources, and certainly contribution from our, newest, major franchise here with OA pain mAbs, with both Librela and Solensia, coming off of, the recent launch in the U.S. and continued growth outside the U.S. in the markets where we already launched. Solensia also contributing to that growth for us. We see contribution coming from our key derm franchise as well as Trio, even in the face of competition. And Trio, I'm sure we'll get into it in the session here, has continued to do really well, despite direct competition in terms of the triple combination space. And we expect to grow the bottom line 9%-11% at ANI, on an operational basis. And we're still making investments in across our business. Certainly, you see it in the guidance in terms of R&D, and other aspects of the business. And that 9%-11% is despite having a non-recurring item in 2023 that contributed in terms of a royalty settlement in the first quarter to the tune of about $37 million. So when you factor that on the guide of 2024, that 9%-11% is a couple points above that, when you put those puts and takes in. We're positioned to continue to return excess cash to our investors via our dividend, which we've announced an increase on as we've done, as well as share buybacks as well. Okay. That's a great overview, great recap, of the last couple weeks. I wanna touch on a couple things real quick from 2023, but I do wanna spend most of the time talking about the future and not the past. But first, one area where we still have a lot of questions and a lot of confusion is on the 4Q 2023 margin dynamic. You know, you normally have some seasonality in margins where 4Q margins tend to be a little lower. It has to do with mix and timing, things like that. But this quarter was a little bit worse than we expected. So could you just, you know, walk us through the bridge of what happened in 4Q on the margin line? You know, revenues were solid, but it really was, Yeah. You know, gross and operating that, that surprised a little bit. Yeah. Look, I think the biggest impact we saw in our margins was from FX. We saw FX headwinds exiting the year. We saw FX headwinds really throughout the year come in. And there was an outsize effect from currencies like Argentina, as well as Brazil and Turkey, but outsize effect given the devaluation in Argentina. And as that goes through our cost of goods, as well as existing receivables on the balance sheet, as those get collected, it has a direct impact in terms of the FX losses that you see in those at an outsize compared to the relative proportion of our revenues that are coming from that market. But I think, you know, we also saw some mixed impacts. And I think with mix, it's important to note that it's not just how much what was the percentage of companion animal versus percentage of livestock? Within them, we also saw mix down in each category. So let me just explain a little bit what that means. Within companion animal, you saw a bigger contribution from Librela than we anticipated going into the end of the year in the fourth quarter. Well, that bigger contribution from Librela, as we've been saying all along, is coming in at a margin rate that is below the company average. So the more we outperform on Librela, the more pressure you saw on margins because the units that we're producing for 2023 are at a level given the big capacity we've built to capitalize on demand as we look ahead. That means the unit costs are higher in 2023, and therefore, they're diluted to the overall company margins. Now, in 2024, Librela margins and our mAb margins as we launch in Librela and Solensia, when we look at those products, you're gonna see those be accretive to the company gross margins in 2024. And then as we exit 2024 and get into 2025 and beyond, those will be at the higher end of our companion animal innovative products. So that's the kind of journey we're on. So when we talk about mix, there is mix within those categories that are also saw some pressure in the fourth quarter. And then livestock coming in at 6% on the quarter, 6% on the year, clearly above what we were saying that we were expecting livestock to do. But within livestock, we saw more MFAs, which is at the lower end of the range in terms of margins for livestock, by the way. And so those are the real impacts that we saw exiting the year. Clearly, if you look at our guidance for 2024, given where we see the mix coming in and so on, of course, we're not forecasting FX other than what we know are the delayed effects. But if you set aside FX from an operational perspective, clearly, we're giving a guidance here that through gross margins and bottom line, we're gonna see expansion at two points at the ANI level above the revenue growth rate. Okay. That's, that's really helpful. The subcomponent mix shift is an interesting color. And talking about the 2024 guide, and you mentioned the other income from 1Q 2023, is there anything else we should keep in mind as we think about phasing through the year, you know, whether it's op or non-op items, for 2024? Look, I think, you know, we expect roughly normalized growth across the year. Now, that's plus or minus a point. I'm not gonna get that level of precision on a quarter-by-quarter basis. I think most everyone aware of how we started 2023 and know we have a relatively easy comp, at the top line on the companion animal U.S. business. Now, if you look at international grew 10% companion animal last year in the first quarter, livestock grew 12% in the first quarter, clearly outsized growth in the first quarter. So that presents a tough comp. Now, livestock is, you know, roughly 1/3 of the overall revenue, so it's not gonna move as much as companion animal does, but it's still, a bit of a mix, headwind if you look at the top line. So it's not all easy comps, if you will, is what I'm trying to say. And then if you look at China, it continues to be a headwind for us. Certainly, you saw China start to really decline in the second half of 2023. That continues through the first half of 2024. So those are the percentages. And I think livestock, we expect to grow in the low single digits, so below the 6% that you saw, more in line with the overall market for livestock, which is 2%-4%-ish, is what we would expect livestock to grow. So I think those are pieces that you consider. And then when you, as you walk through the bottom line, clearly, we're expecting to leverage our SG&A. We will be making investments behind our, you know, key franchises, certainly our pain franchises. We're launching DTC already. We have already launched DTC in the U.S. behind Librela, for example. So those will be. But you saw real leverage, strong leverage of our SG&A as you look at the guidance that we issued. We will see an uptick again in terms of growth for R&D above, slightly above the overall revenue growth rate, not quite as hot as it was in 2023, but certainly still ahead. I think those are the pieces. I think, you know, the bottom line, the settlement in the first quarter certainly is a headwind for us, particularly in the first quarter, but for the year. There are a couple things that go the other way, right? I mean, if you look at the fourth quarter, we had some unusual non-recurring items that happened in the fourth quarter, namely the write-down of the one asset that was within our operational figures but a non-operational item there, as well as contribution to our foundation, for example. So those things not repeating go the other way in terms of as you lap the fourth quarter of 2024. Okay. All right. That's helpful. Now I wanna jump into the sort of the meat of the discussion. First, I wanna start with Librela, obviously, a massive area of focus, so there's a lot to talk about here. First, you know, you talked about your, your 4Q result coming in a little bit above your initial expectations. You also talked about on the earnings call thinking that you had maybe, you know, a third of that revenue being tied to stocking, which, again, is not unusual or unexpected. There's always gonna be some stocking in the first quarter of a regional launch. So how do you think about Librela as you proceed now? You've got one quarter under your belt, you know, positive feedback from vets, strong uptake. Is it, you know, even with that stocking, reasonable to expect at least some level of quarter-over-quarter growth as you go into 2Q and then sort of into 1Q and then proceeding from there? Yeah. Look, we're very pleased with how Librela has performed out of the gates, our penetration levels, which is essentially the percentage of clinics that have the product, surpassing our expectations to the point that we exited 2023 already launching DTC to bring more pet-owner awareness to the solution here, to drive them to the clinic. So all those levers, going really well for us on the product and posting $44 million in the fourth quarter, well above what we were expecting. But as we exited the year with that momentum, it also meant that there's relatively more of those that are stocking because that's the initial orders some of those clinics were placing. So we're putting somewhere in 1/4 to 1/3 of the total for the quarter. That would translate to about $12 million-$15 million of stocking in that number. When you adjust for that as we go into the first quarter here, I don't wanna get into specific guidance on a specific product for a specific quarter, but I do think when you factor $12 million-$15 million of that number in Q4, something approaching or in the neighborhood of what we did in the first quarter would still be pretty substantial growth for us in Q1 and about where I would expect this product to go. Okay. And then the way we've typically seen products ramp in animal health, and a lot of it has been, you know, your disclosures on the Apoquel side of Cytopoint, Trio, is a relatively linear ramp. You know, you don't you don't get the ramps if you have in human health where, you know, product spikes in year one or two and then kind of plates out those. You know, you in animal health, you often see if it's $100 million year one, it's $200 million year two, $300 million year three, $400 million year four. Obviously, you know, regional launches or new geographies or product enhancements can swing that. But is there any reason I think that a Librela curve will be different than just that traditional penetration-driven model? Yeah. I think overall, directionally, you're right in that expectation and that's what we've seen in other products. It won't be perfectly linear. There's always some level of, you know, stocking that happens. We're still penetrating more clinics even though we're above where we were expecting to, to exit 2023 and enter into 2024. So those may have some dynamics there as we start to launch some of the DTC. Those may be. But overall, when you step back and you look at year on year- on- year, I think the, the what you described is about what we would expect to see on the product. And, and keep, keep in mind, we have experience with Librela specifically and Solensia in markets outside the U.S. that we've seen, those, those happen that way as well. How do you think about further market penetration? I think one of the things we talked about in Librela is, there's a lot of potential use cases where whether you're talking about, you know, really sick dogs or expanding into a little bit of that younger population, what have you seen in terms of? I mean, it's been four or five months in the U.S. now. What have been the use cases by vets? You know, how can you drive that to sort of expand the market opportunity there? Yeah, Mike. Look, I think, you know, as you can expect, we're still early in this. So I think we'll continue to analyze and see where the product is. But it is certainly important as we continue the launch to see that transition into moderate cases that, you know, if you look at the preexisting, you know, care with NSAIDs, you have a balance between the risk and benefit of using an NSAID on an animal that's moderate case. It may not meet the case, right? But on a product with a profile of Librela, you would wanna see that product going into those moderate cases. And that will really expand this as they will be on the product longer. And so the duration of therapy is a key driver in terms of expanding this market. So we would look to see those start to happen in the product as we continue the ramp, which is very important on this. But you can imagine the initial use cases are gonna be slanted more so to those older, more severe, dogs. And then as vets get more and more comfortable with the product, they'll start to use it on those moderate cases given the safety and efficacy profile here. And that will continue to drive that ramp on the product as we go from here. Maybe a natural follow-on there. You're talking about the, you know, the severe cases. I have to ask, we've gotten a lot of questions over the last couple weeks, in terms of the risk of adverse events, or, you know, some safety issues, with Librela. You know, a lot of this is still really anecdotal. And, you know, it's tough to pin this down to any particular, any particular AE. But, can you talk about the, you know, the clinical data you've accumulated and the experience you've had with Librela in Europe where, you know, it has been on the market a lot longer, in terms of the safety profile, in terms of, you know, how dogs respond to it and, and how that, how that's trending relative to your expectations? Yeah. Look, monitoring adverse events is a normal course. Whenever you launch a product, you ask for those that are being dosed to report any events that they have, and we take those seriously. The great thing, as you mentioned, is that Librela has been in markets outside the U.S. for about three years now, and we have 11 million doses globally since the launch three years ago. That gives us a lot of information, certainly in terms of how the product is performing and what the safety and efficacy profile is. And if you look at that 11 million doses that we've seen, we're not noticing any unusual events or signals that would cause us any significant concern on the product when we continue to stand by the safety and efficacy of Librela according to the data that we're looking at. Now, of course, there are different AEs, adverse events that people are reporting. And by the way, there's not necessarily causation. It's just that, you know, an event has occurred and someone's reporting it. And because it's a new product, there's a tendency to report more. And this is also, keep in mind, as I mentioned, in the initial launch, you're gonna have the older dogs being treated. And so the older they are, the more likely they have comorbidities that also occur. And if they haven't been as active prior to using the product, now they become more active, and you'll see things that you perhaps didn't see before. So, I think that's normal course. And as I said, we're not seeing any unusual trends or signals here that we're observing in this product so far. Right. I mean, you touched on two points there that I was gonna pivot to. One was, you know, exactly as you said, it is older dogs that are more likely to have other health issues. How do you separate that? I mean, how do you control for that? Because, you know, if the dog is already nine, 10, 11, 12 years old when they start the therapy, I mean, that's very, very late-life patient. So how do you separate treatment versus just sort of unrelated impact? Yeah. Look, I don't know if there's control is the word I would use. I think there's awareness, there's learnings from other markets that we've launched and things that we've seen that certainly, you know, our vets within Zoetis will share with, with vets and KOLs and so on. And this is this is part of the process, you know, in terms of what we've learned, from other markets. Certainly, these older dogs are in pain, and you wanna see the product being used to help them from that pain and doesn't necessarily, you know, have an effect on other things that they may already have or had that wasn't reported, etc. So, you know, the way I look at it is there's some baseline, although there's not clean, clear data on what is the baseline, you know, when you're not on a new drug in terms of how often are those things being reported. Some of them, you can imagine, it's not zero. So if you look at, for example, ataxia, right, that's a neurological event that you see in reports with the new product being used. But, you know, if you look at the 11 million doses so far, it's occurring or at least reported, I should say, somewhere between 1-2 reports per 10,000. And if you consider that, that's considered rare in terms of the occurrences or the reporting. Again, there's no causation that we can identify based on the data per se, but that's reported. Now, with this population of older dogs that are in the initial launches here, you know, you can imagine again, we don't have data on the baseline, so I don't wanna quote something that I don't have. But you can imagine for those older dogs, the baseline is not likely to be zero. So you're having 1-2 again, per 10,000 is what the data is that we're looking at, globally, out of the 11 million doses so far. Okay. That's, that's really helpful. Okay. Thanks so much. Somewhat, and then on, on the margin contribution point, I think you, you kinda really, clarified that, you know, at early stages, it's, it's decremental margins just given the ramp and then, you know, how that's gonna affect over the course of the year. Is there like a, a dollar value in terms of revenues that we should be thinking about where, you know, once Librela is at, you know, $100 million or $75 million quarterly revenue, that's sort of the breakpoint, and above that, you really get that nice beneficial, accretion from the product. Just how should we think about that as that continues to ramp in 2024? Yeah. Look, I think the margin ramp here is also more pronounced because, and this is why we're confident in that we have the capacity that we need to take advantage of demand globally, right? The more capacity we build to prepare for that demand, the more pronounced the difference is in the margin profile from the beginning as you go through and ramp up, right? So if you build more and more capacity, that means you have a bigger cost base. And as you're producing units initially that aren't fully leveraging that cost base and that capacity, the unit cost is gonna be higher, right? And so that's what happens as you launch on a product that you've built that kinda level of capacity for, and gives us the confidence that we have. I wouldn't think about it as a dollar amount per se, but keep in mind, mAbs take roughly 10 months from beginning to end to produce. We're essentially, we're producing products in 2024 or right now that are not likely to be sold till the end of the year towards the end of the year. So that volume that we're producing in 2024 is such that it's absorbing enough of the cost that brings the unit cost down to the point that it is accretive to the 70% gross margins we have as a company. We already know that. The question then becomes, what does it ramp into in 2025, and what rate of production are you exiting 2024 at? And is that gonna get you all the way to those more innovative companion animal products? So we'll continue to model those out and produce accordingly. But the level we're producing for 2024 is already getting us to that point that is accretive to the overall company margin levels. Okay. That's really helpful. Okay. I wanna pivot to a couple other, key product questions we have. And this is gonna, you know, broadly go under the, the umbrella of competition, but it's also gonna go on areas where, you know, you've had really strong innovation and really good, product contribution in prior years. So first, let's talk about derma. You know, Apoquel, Cytopoint, incredible blockbuster performance over the past decade between that combo, you know, really one of the few monopolies in animal health. But now, after a decade, you're finally expected to see competition in 2024, you know, with, with Elanco's, Zenrelia. We don't know the product profile yet, but it is, you know, widely anticipated, at least in the investor community. How would you characterize, you know, your expectations for APO and CITO in 2024? How does the entry of a competitor change your mindset about that market? Yeah. Look, we've had a 10-year head start with Apoquel in the market, and about a 7-year head start with Cytopoint. The satisfaction levels from vets and pet owners is really, really high on these products. We've been expecting competition for quite some time, which has given us time to be able to position ourselves in the best ways possible. And we have multiple levers, really to prepare for that, right? And so if you look at Apoquel, we now have Apoquel Chewable. So now the third product, it's launched, in a number of markets outside the U.S. We've seen a conversion from Apoquel to Apoquel Chewable, particularly if you look at the Western European markets, somewhere around 40% conversion. And it's happened sort of, what I'd say, naturally, given we're pricing it basically a priority in those markets as well as the U.S. Now, the launch in the U.S. is too early, right? We've just launched essentially at the same time that we launched Librela in the U.S. We launched Apoquel Chewable in the U.S.. So it'll take some time to sort of run through its course in terms of conversion. But that gives us one lever in terms of what, how we might sort of address competition but also meeting a need for pet owners, particularly that have a preference toward chewable for dogs to be able to be palatable versus putting it into a pill pack, etc. So we do know pet owners prefer the chewable format versus the film-coated format, and that will naturally drive it. The question is, are there things that we'll do to accelerate that conversion even faster? And there are multiple levers there that we can pull. But then you also see Apoquel, more and more demand for Cytopoint, for example, given now we have, you know, the capacity and the inputs that we need rather since about a year and a half or two ago. And so we can fully capitalize on that demand, which is why you've seen over the last several quarters Cytopoint growth outpacing Apoquel as you see some of that transition as well. And so I think that's another element that we have. Now, we don't have a label yet from a competitor to really respond to. But what I would say is we have 10 years of data and experience for vets and pet owners that counts for a lot in terms of the level of satisfaction that they have. And so, you know, I think there may be, again, you know, small, little something that someone might come out with as a differentiator. The question is, is it a big enough differentiator to outweigh 10 years of really satisfied customers and then all the other pieces that I just talked about? So we feel really good about how we're positioned here, ahead of competition, on these products. And we continue to innovate as well, lifecycle innovation, long-cycle formats, for example, for things like Cytopoint and so on, all things that we're working on. And I think those things will continue to play out for us. Okay. And you—I mean, you touched on differentiation. That was gonna be an area I was gonna push you on. Maybe I'll, I'll bundle my Zenrelia and Trio differentiation question together. You know, there's a lot of debate on how differentiated products can be relative to Apoquel, Cytopoint, relative to Simparica Trio. You know, you've already got Nexgard Plus out there from Boehringer Ingelheim. Elanco has talked about Credelio Quattro, and we, you know, we generally know the active ingredients, so we more or less know what that's gonna look like. So how would you characterize, you know, differentiation risk? You know, is there—is there an area of weakness in some way that you, you sense where, you know, maybe the safety profile isn't as good as it should be or the breadth isn't as good? If it's not differentiated, you know, is price you know, how meaningful can price as a lever be relative to, you know, Trio, APO, CITO? Yeah. Look, I don't wanna speculate too much on what differentiation someone might come out with. But I do think when you look at it, right, we're not fielding any significant requests from vets or pet owners that they wish the product performed better or differently or covered this or that or, or the other, which means then your risk, as you put it, Mike, of differentiation in relative terms then must be relatively low, right, if, if you're not having current set of users that are, you know, banging on your door asking for something else from the product. And so I think that's kinda how we characterize it. Again, caveat that we haven't seen the label yet, and we don't know what we're competing against. So I think, you know, look, whether price is I think there are lots of different levers that we have to play with that I just talked about a moment ago with respect to conversion to Chewable and so on and Cytopoint, and then eventually a long-acting version that I think give us lots of levers before we even start to think about or look at anything related to price. But we'll see what the competition comes out with and we'll react accordingly. But again, the level of satisfaction and number of years of safety and efficacy data that users have, vets in particular but pet owners as well, is gonna be a pretty significant weight to sort of balance against whatever someone comes out with, whether it's price or some, you know, nuance level differentiation. Okay. And then, focusing a little bit deeper on the para market, you know, Nexgard Plus was, the first competitor to Trio out there. And that was, you know, highly anticipated in the sense that, you know, BI talked about it for a while prior to launching it. And there was a lot of, you know, discounting, stocking, by a lot of vendors, in sort of the standalone portfolio to try to, you know, retain share in that market. How have you seen that dynamic, sort of normalize as you entered 2023 and 2024? Is, is some of that discounting, faded a little bit? Are we back to a more normal operating environment, just to sort of adjust for some of that lumpiness we've seen in the last year? Yeah. Look, Mike, I, I couldn't be more pleased with how Trio has performed in the face of competition. You're right. The level of promotion and by the way, there's always promotion in this space in terms of parasiticides. It's the biggest market out there, the most competitive market, in animal health arguably is parasiticides. Every major player is in it. And so there are there are always promotions all the time, right? But the level of promotion that we saw leading into just prior to the competitive approval was pretty significant, and it was also lasting much longer. And despite that, right, we just posted two straight quarters in the U.S. where Trio grew 17%, globally about 20 and 21% respectively. So clearly doing really well. Just as important as the dollar growth is that we're gaining patient share in the back half of the year after the competitive launch has been out there. So we're very pleased, again, given the satisfaction levels. We just talked about that for Derm. Given the head start in the market that we have and the superior label that we have, very, very pleased with the performance and how we're positioned. We'll see what new competitors have. We expect more to come into the space. But again, that first-mover advantage, three, four years' worth of, you know, I would say, safety and efficacy record and high satisfaction always counts for something, fairly significant against a new entrant coming in. And our label, it's, it's really hard to trump 100% efficacy on the first dose. So, so you'd say at best, someone can match that, right? and then you have fleas and ticks that matter. And there might be, again, what I'll say is somewhere a nuanced sort of differentiation that might be out there, for example, on some things. But again, we're not getting significant calls for, "We wish the product would do X, Y, or Z." That puts us in a pretty good confident level about our ability to compete and grow. Okay. And just following up on that, I'm starting to get a couple of client questions, so we got about 10 minutes. I wanna make sure I squeeze these in. First, talking about both Simparica Trio and Apoquel, is there any unusual seasonality we should expect in 2024? I understand that, you know, there's always some seasonality with these products. But given the new launches, given some stocking or destocking by competitors, should we expect more or less normal seasonality, I mean, historic seasonality for the para portfolio, for the derma portfolio in 2024, or any, any weirdness there? I think there isn't anything that is meaningful that I could point to. I think, you know, there, as you said, there is some seasonality, particularly more pronounced maybe on the parasiticide side of things. We're about to enter into para season as you go into Q2 and Q3 and so on. And so certainly, that will be the normal levels. And if you saw our guidance, we said, "Look, we expect mid- to high single-digit growth." That's a fairly broad range. And so that kinda takes into account different scenarios around what competition might be, the timing of that, the severity of promotional activity, or what have you that might occur if and when there's competition in these spaces, or additional competition. So I think that range gives us that freedom, if you will, to operate in terms of what we might expect. But there isn't anything in particular that I would point to around seasonality. Maybe in a little bit some markets here and there outside the U.S., but nothing meaningful. Okay. I got a specific follow-up on Librela. I think you talked about 11 million doses so far. Any sense on how many dogs or patients have been treated? I think you talked in the past about, you know, average time on treatment of, of around 8 months. I don't know if that number has changed. I mean, I imagine it was kinda trending higher. But that kinda puts you in the, like, 1-1.5 million dogs treated. Is that a fair way to think through it? You know, I think that's maybe roughly right. You do have a fair amount of turnover at the older dogs that are, you know, 13, 14 years old. They're not gonna be on the product very long because they have comorbidities and obviously, end of life. But then you have some moderate cases as well. So I wouldn't apply. I would just, you know, carefully apply that logic, if you will. But I don't have that specific data to give. But your logic is directionally, I would say, about right. Directionally accurate is the best I hope for these days, so I'll take it. And then I want to ask on price as a component of your, of your algorithm, both in 2023 and 2024 and also longer term. I mean, I think pricing's been a stronger lever for you and for the industry than it's been historically, continues to be elevated. And that's, you know, that's phenomenal. But at the same time, it also means that volume's not contributing as much. So if you kind of take, you know, both 2023 and 2024 numbers and you strip out some of the new product contribution and you strip out price, you know, the underlying volume or the inline growth is below historical levels. Just anything you can talk to there. Is it anything, any specific products where you're seeing a lot of weakness? Is it just tied to the broader macro and vet-visit trends? Just trying to, you know, see if there's a return to that, you know, longer-term algorithm where you do have more volume than price growth. Yeah. Look, I think if you look at our performance historically, you've seen about 2-3 points of price. We've been running a little bit higher than that, about 5, you know, the last couple of years. And we're saying we're gonna come off that 5 a little bit but not maybe not all the way to the 2-3. And that's within a 7%-9% growth rate. Now, clearly, there's strong contribution from new product launches like the OA pain franchise and so on, in there. But, you know, there's not any meaningful shift in the business that we're seeing. Of course, there are some headwinds that we're factoring into our thinking here too, right, products like if you look at, or markets like China, for example, that has had an outsized effect on volume. So as we look at how we closed out the year, for example, you probably had about a point of volume globally taken off just by the China market alone, given the volume declines that we expected to see and we saw in that market. So I do think you're seeing both price and volume contribution. Even as we get to the upper end of our range on price, you're still seeing, you know, if we're posting a seven or an eight, three or so of that has been volume, as we go through 2023, of course, there's some noise in the first quarter given the destocking, and so on. But we're very pleased with what we're seeing across the slate here. I think when you get lots of existing products across our portfolio both companion animal and livestock and with livestock growing in that low single digit, that does give us, you know, opportunity to see volume across a broader spectrum of products, if you will, there as well. And we've seen volume even in places where we've given price like Draxxin contribute. So, so I think we feel good about the elasticity that we're seeing in the business and our ability to continue to take price and still see volume growth. There are some outliers like China, like I said, that take a little bit of the give a haircut on the volumes that we're seeing. Okay. That's fair. And I have to ask you at least one actual P&L question. So let's talk about margins a little bit and the you know the long-term margin algorithm. You know you talked about Librela contribution margin. And at your analyst day last year in the summer you guys had a great slide outlining you know the incremental margin contribution from monoclonal antibodies as that becomes a bigger part of the portfolio. Outside of that any you know any way to characterize the margin algorithm going forward? I mean you guys have done a tremendous job with margin expansion over the past decade. Sort of like what's the next leg to the margin story for Zoetis? Well, look, I think we're continuing to innovate. The innovative products tend to drive an ability to drive price. And you're seeing mix continue to weigh on the companion animal side, which, you know, higher margins than livestock. So as that mix continues and within that, right, you mentioned mAbs, a really very important component, right, of that. But it's not just mAbs. It's the overall growth rate of companion animal being higher. And then price is a conversation we just had. The good thing about Zoetis is that it's not just through, you know, higher inflation, relatively speaking, periods that we've taken price. We have essentially consistently taken 2-3 points, which the market expects. And so we continue to have that lever, which, again, contributes obviously to the margin rates and margin profile that we see ahead. So those are pieces that go into the algorithm, the mix, more companion animal, and within that, more mAbs, weighing in at a higher margin rate, price continuing to drive. I think those are the pieces. Then we're seeing ability because we've made significant investments in the past, particularly if you look at our field force investments going back to 2022, mid-2022-ish timeframe, investments that we're making in various areas. We'll return to a point where you'll see R&D growth rate be more in line with revenue. Last year was 14%, double the revenue growth rate. Next year, it's at the higher end, maybe a touch above the high end of our revenue growth rate. You'll see that normalize to be more in line with revenue. But leveraging SG&A certainly is an element that you're seeing play out here, that will contribute to and you're seeing it play out also in that 2024 guide. Despite the royalty settlement that we talked about, we're talking about two points above the revenue growth rate despite having that headwind. If you adjust for that, you've got another couple of points. So you're seeing that leverage come through already as we go through 2024. I won't give more specifics beyond 2024, but that algorithm, all the pieces that I've just covered. Yeah. Yeah. I mean, between like you said, you know, R&D investments being in a relatively elevated pace last year, this year, and the incremental contribution from Librela, it sounds like, you know, there's a lot of opportunity for further margin gains going forward. Yep. On a multi-year basis. Okay. I got a couple minutes left. I have one, with a few more coming in from clients. One was a question on, you know, you touched on China a couple times. Anything you can say more broadly in terms of current OUS trends in general, both companion and livestock? It's just a lot harder to get visibility into that and, you know, especially because you've got, you know, your OUS reporting segment is a month different. So you've got, you know, you've got a month further visibility on that. Anything that's worth calling out there? Look, I think when you look outside the U.S., the U.S. is such a big market, right, but we're very diverse as a company. We're in a lot of different markets. Once you get out of the U.S., each individual market is somewhere the biggest ones are about 4% of our total revenue. So you start to see a lot of different dynamics. But there are some consistent trends. You know, we're continuing to see really good, strong growth, particularly across companion animal. But if you look at the emerging markets, livestock tends to drive the growth rate for livestock disproportionately out of those emerging markets. And those trends continue. I do think there are some pieces that we've talked about. So when you go through the algorithm of growth for us in 2024, and you have contribution from price, you have contribution from the pain mAbs, you have Derm and Trio contributing livestock, contributing. I do think there are some offsets that go into our thinking and our logic, China being one of them, given, again, the strong comps and also the overall economic cycle we're going through in China right now. That hasn't changed. We've been talking about that for the last couple of quarters, and it remains at the levels that we expected. So I think you're gonna see some headwinds in terms of the next couple of quarters because the comps are higher in addition to the economic cycle. We'll see how it plays out for the back half of the year. And so we're watching other markets that get impacted by China, to see how those play out. We've factored some of those into our thinking in terms of our guidance already in that 7-9 range. Overall, I would say the strength that we're seeing in companion animal, these trends I've been amazed by in my, you know, almost three years in the company that you go to these emerging markets and you're seeing the same demand pull coming from companion animal to the point that companion animal now outside the U.S. is also more than 50%. Now, it's, you know, it's 75%-80% in the U.S., but it's more than 50% outside the U.S. where even in my lifetime here, it was slightly less than 50%. So you're seeing that continue to decline as well. So that's very encouraging. Okay. All right. Well, we'll have to end it there, unfortunately. A couple more things we could discuss, but we'll have to follow it up offline. Wetteny, thanks so much for joining. I also know it's your birthday, being a leap year, so happy birthday. Thank you. I don't know if you're 11 or 12 this week, but it's a big day. Yeah. Thanks for spending it with us. Hope you have a good set of meetings and get to enjoy some cake later this afternoon. Thanks, Mike. Really appreciate that. I get one birthday every 1,460 days. The only thing that would be better is if I only aged that slowly, but I don't. Yeah. No, we all. All right. All right. Thanks, everyone, for joining. Thanks, Wetteny. All right.