IDEXX Laboratories, Inc. (IDXX) is gaining market share from VCA Antech Inc (WOOF) in the veterinary reference lab space due to IDXX‘s strong bundled offerings and software services for veterinary practices, says Jonathan Block, Managing Director at Stifel, Nicolaus & Co., Inc.
“We’ve done a lot of diligence — big surveys — that show that some share has shifted from VCA to IDEXX. I think to be fair, VCA was sort of the incumbent here, and IDEXX came along years ago, so VCA had to lose some share. However, I think the share losses are still occurring. I think the two lab offerings are very, very similar in terms of price and turnaround time, and we’ve done work that shows those are the two most important variables when someone’s going to choose their reference lab provider,” Block said.
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Where the companies do differ is in their product offerings, with IDXX providing a stronger bundle with its in-clinic business, as well as offering software services through Cornerstone, Block says.
“While IDEXX is the number-two reference lab provider, they are the number one in-clinic/point-of-care company. They are the number-two software provider through Cornerstone. They have a lot of specialty tests at their reference lab that they run that arguably VCA doesn’t. So once you get beyond price and turnaround time, I just think IDEXX’s offering is more robust and superior, notably through their bundled offering and also through other stuff like software, specialty tests, etc.,” Block said.
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