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The European Commission announced a formal investigation into Zoetis on Tuesday (NYSE:ZTS) to investigate whether the US animal health company violated the region’s antitrust rules by eliminating a rival to its Librela dog pain therapy.
According to regulators, during the development of Librela, indicated for osteoarthritic pain in dogs, Zoetis (ZTS) has acquired another late-stage pipeline targeting the same indication.
However, officials accused the company of subsequently halting its development and refusing to transfer its rights to a third party with exclusive regional commercial rights to the product.
The investigation launched following a complaint by the French company Virbac in 2020 will be conducted as a “priority matter”, EU officials said.
If the allegations are proven, Zoetis (ZTS), a spinoff of Pfizer (PFE), will be subject to a fine of 10% of its global turnover with a formal warning from EU regulators.
The company said the investigation, which the commission said was its first antitrust investigation related to the exclusion termination of a pipeline product, is linked to an acquisition completed seven years ago.
“We believe that both the acquisition of the complex and our subsequent decision to cease development were sound, rigorous and legal,” Zoetis (ZTS) added.