Due diligence is a cornerstone of investment and acquisition decisions—but in animal health, the process plays by a slightly different set of rules. While many human health investors are familiar with INDs, CDER, and clinical trial design, the animal health world brings its own regulatory structures, product formats, and commercial dynamics.
For pharma companies looking to diversify, or investors exploring new verticals, understanding the distinctive due diligence landscape in veterinary medicine is crucial In this article, we break down how due diligence differs between human and animal health—and how to avoid common pitfalls.
Regulatory Pathways: CVM and CVB vs. CDER and CBER
In human health, most investors are familiar with FDA’s CDER (Center for Drug Evaluation and Research) or CBER (Center for Biologics Evaluation and Research). In animal health, products are regulated by:
- FDA CVM (Center for Veterinary Medicine) for drugs, medicated feeds, and some devices
- USDA CVB (Center for Veterinary Biologics) for vaccines, immunologics, and diagnostics
Key Differences:
- INADs and NADAs (not INDs or NDAs)
- Product licenses and establishment licenses for biologics
- Less prescriptive clinical trial phases (e.g., no traditional I/II/III Phases)
- Emphasis on target animal safety and food safety (e.g., residue studies)
Investor tip: Ensure your diligence team includes someone familiar with CVM/USDA—not just CDER experience.
CMC and Formulation: Species-Specific Challenges
In human health, formulation is primarily about efficacy and patient adherence. In animal health, formulation must also be considered:
- Palatability across species (e.g., dogs vs. cattle)
- Delivery methods that work in a clinical or field setting (oral drenches, pour-ons, feed additives)
- Excipients that are safe for animals (some human-safe excipients are toxic to companion animal or livestock)
- Shelf-life in field conditions, not just stability in a controlled environment
Due Diligence Consideration: Has the product been evaluated for practical use in real-world veterinary settings for the appropriate species?
Market Size and Commercial Pathways
Veterinary products serve smaller markets than human drugs most often with faster uptake, less pricing pressure, and fewer reimbursement constraints.
In animal health:
- Many products are sold directly to veterinarians or through specialty distributors
- There is no third-party payer system—purchases are made out-of-pocket
- Sales reps often cover both technical support and product promotion
- Products may cross species or have global relevance if data is well-packaged
Diligence Insight: Market potential must factor in species served, indication breadth, and route to market—not just traditional TAM/SAM/SOM models.
IP and Competitive Landscape
While patents are still important in animal health, speed to market and regulatory exclusivity often matter more. For example:
- CVM may grant marketing exclusivity for 3-5 years after approval
- Some products rely on formulation trade secrets or manufacturing know-how
- Biologics regulated by USDA may have less global IP alignment than human biologics
Investor takeaway: Be sure to assess the competitive landscape beyond patents.
Manufacturing Readiness and QMS Expectations
Animal health CDMOs may follow GMP or USDA-compliant practices—but diligence should confirm:
- Manufacturing is scalable and the product is species-appropriate
- Validation and batch release protocols are compliant with CVM or CVB expectations
- A QMS exists—or a plan is in place to build one
- Product packaging and labeling meet standards for the country that marketing is desired
Unlike human pharma, many veterinary products are developed with lower budgets and at greater speeds making the CDMO readiness a much greater consideration than for human products.
How DSI Supports Animal Health Due Diligence
DSI helps investors and acquirers:
- Conduct regulatory and CMC assessments tailored to animal health
- Evaluate INAD, NADA, and USDA license status
- Assess species-specific product risks
- Review QMS, manufacturing readiness, and documentation
- Identify red flags in IP, manufacturing, stability, or market positioning
Our experts combine human and veterinary experience to give you clear, actionable insights—no matter where your target sits.
Final Thoughts
Animal health offers a promising frontier for investors and strategic buyers—but due diligence must reflect the realities of this distinct sector. By asking the right regulatory, CMC, and market questions, you’ll avoid surprises and uncover real value.
Exploring an animal health investment or acquisition?
Let DSI help you evaluate the opportunity with clarity and confidence.
