To begin with, the market structure is much simpler than that of human health. Distribution is essentially direct, with no intermediaries to eat into margins, while insurance plays only a very secondary role - so there are no complex reimbursement issues.

In addition, development costs are lower and product lifetimes longer - some of the franchises in the Zoetis portfolio have been leaders in their market segments for two or three decades - resulting in incomparably higher profitability.

Last but not least, animal health blockbusters rarely exceed one hundred million dollars in sales, which goes a long way towards warding off competition from generic manufacturers. Progress in this area has been slow for the time being, although this could change in the future; this is undoubtedly the main risk threatening the sector.

Zoetis generates two-thirds of its sales in companion animals, where margins are higher and pricing power stronger than in farm animals.

Given its unrivalled scale, the group outperforms all its competitors in terms of investment in R&D and distribution capacity. It is thus cementing its competitive advantage.

Over the last decade, its sales growth rate averaged 6% a year. Coupled with remarkable margin expansion and sustained share buy-backs, earnings per share growth reached an annual average of 15% over the period.

With a return on equity hovering around 50%, Zoetis has earned an average valuation anchored around a multiple of forty times earnings, with a floor at thirty times earnings where the share has rightly fallen back in recent weeks.

While it will certainly not be easy to reproduce the economic performance of the previous cycle in the next, we note that over the last decade the share has bounced off this thirty-times-earnings floor every time it has touched it.