Pfizer's animal health unit, Zoetis, soars in IPO

Zoetis shares, trading under the "ZTS" ticker, rose 19 percent, or $5.01, to close at $31.01.

Investors may have been attracted to the animal health company because of its growth potential as people in developed countries spend more on their pets and farmers in developing countries raise more livestock to satisfy growing demand for meat as consumers' incomes rise. Prices are also stable because insurance plans are rarely involved in setting them, and generic competition is rare.

The spinoff is part of Pfizer's ongoing effort to appease shareholders. Many have been unhappy since Pfizer, the world's largest drugmaker by revenue, halved its 32-cent dividend four years ago to help fund its $68 billion acquisition of Wyeth. Pfizer also sold off its nutrition business for $11.5 billion late last year and has been gradually increasing the dividend, so far to 24 cents.

The proceeds from the Zoetis IPO went to retire Pfizer debt.

Pfizer Inc. sold 86.1 million shares for $26 apiece, $1 above the top end of the $22 to $25 range it had estimated for Zoetis. That left it with an ownership stake of at least 80 percent in Zoetis. Pfizer is likely to cut back its stake with further stock sales, said Scott Sweet, senior managing partner at IPOBoutique.com, which invests in IPOs and advises other investors on the deals.