The Experts in Animal Health

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 Brakke Consulting’s
 Animal Health News & Notes for March 4, 2005
 Copyright © Brakke Consulting, Inc.
see below for more details
earnings news:
Del Monte
eMerge Interactive
Smithfield Foods

other news:
Daploma International
Digital Angel
DSD Holdings
Global Animal Management
LEO Group
Pet Ecology Brands
Pfizer – ceftiofur
Pfizer – Rimadyl
SeraCare Life Sciences
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>  PETsMART, Inc. announced preliminary unaudited results for its fiscal 2004 year, ended January 30, 2005.  For all of fiscal 2004, the company reported preliminary unaudited net income of $171 million,  including the after-tax legal settlement gain of $3.6 million,  and an after-tax lease accounting charge of approximately $4.8 million.  PETsMART generated $3.36 billion in net sales in 2004, up from $2.99 billion in net sales a year ago. Comparable store sales, or sales in stores open at least a year, grew 6.3% in 2004. (company website)   
>  Del Monte Foods Company reported results for the third quarter ended January 30, 2005.  Sales for the Pet Products division were $223 million, an increase of  10% compared to the prior-year third quarter.  Pet Products sales for the nine months ended January 30, 2005 were $620 million, an increase of 11% compared to the comparable period in the prior year. (company website)
> Smithfield Foods Inc. reported that its third-quarter profits more than doubled due to continued gains in its pork operations. Sales increased to $3.06 billion in the quarter ended Jan. 30, from $2.70 billion in the same period a year ago.  Net income rose to $97.5 million from $46.1 million in the year-ago period. (AP)
> eMerge Interactive, Inc. reported results for the year ending December 31, 2004.  Revenues for the full year increased 25% to $1.2 million.  Net loss was ($6.8) million, compared to a net loss of ($9.7) million for the prior year.  (company press release)  
Animal Agriculture Alliance
Fourth Annual Stakeholders Summit
March 21 – 23, 2005
The Animal Agriculture Alliance announced its fourth industry-wide Stakeholders Summit.  This year’s Summit is focused specifically on animal welfare and its importance to all stakeholders in the food chain.   This day and a half conference, “Animal Welfare Initiatives, Needs, Regulation and Communication: Building on the Past, Preparing for the Future,” is scheduled for March 21 – 23, at the Marriott Crystal City Hotel in Arlington, Virginia. Registration for the Summit can be made securely via the Alliance website at
>  The FDA amended the animal drug regulations to reflect approval of a new animal drug application (NADA) filed by Pharmacia & Upjohn Co., a Division of Pfizer, Inc. The NADA provides for the veterinary prescription use of ceftiofur hydrochloride suspension, by intramammary infusion, for the treatment of clinical mastitis in lactating dairy cattle. (AnimalNet – Federal Register)   
>  Pfizer announced that, effective March 28, 2005, Rimadyl will be available through several leading US distributors.  The availability through distributors will be in addition to the option of ordering directly from Pfizer.  All other Pfizer products will remain available for sale only through Pfizer and authorized PVPL and AAHA/Marketlink representatives. (company press release)
>  Global Animal Management, Inc. announced it has received USDA approval for its livestock Premises Management System. The web-based software is a component of a system used to track individual animals, as well as entire herds, from their point of origin through their entire lifecycle. The USDA approval means Global Animal Management’s Premises Management System (GPMS) is a “compliant premises registration system” and supports the implementation of the NAIS program. Global Animal Management, Inc. is a subsidiary of Schering-Plough Animal Health Corporation.  (company press release)  
>  Phibro Animal Health Corporation announced the consummation of the redemption of its Series C Preferred Stock, all of which was held by Palladium Equity Partners II LP and certain of its affiliates, for $26.4 million. The funds used for such redemption were contributed to the capital of the Company by PAHC Holdings Corporation (“PAHC Holdings”), a holding company for the capital stock of the Company recently formed by Jack Bendheim, Marvin S. Sussman and trusts for the benefit of Mr. Bendheim and his family. PAHC Holdings now owns all of the outstanding capital stock of all classes of the Company. (Business Wire)  
>  Digital Angel Corporation announced that it is expanding its presence in the European livestock market by acquiring Denmark-based DSD Holdings A/S, and its wholly-owned subsidiaries Daploma International A/S and Digitag A/S. DSD manufactures and markets visual and electronic radio frequency identification (RFID) tags for livestock. Digital Angel purchased all of the outstanding capital stock of DSD in consideration for a purchase price of seven times DSD’s average annual EBITDA over the next three years less an initial payment of $3.5 million and outstanding indebtedness at the end of the time period. The consideration at closing was paid in Applied Digital, Inc. common stock, which Digital Angel acquired from Applied Digital in exchange for 644,140 shares ($3.5 million) of Digital Angel stock. Applied Digital consequently increased its ownership position in Digital Angel. (PRNewswire, Business Wire)  
>  Triton Fund announced plans to sell Tetra, which it acquired from Pfizer in 2002.  Financial terms were not disclosed. (Pet Product News)
> SeraCare Life Sciences filed patent applications in the US for an Immuno-PCR test, a blood-based test for infectious prions, the proteins that cause BSE in cattle and variant Creutzfeldt-Jakob disease in humans. Typically, the disease is identified through post-mortem analysis of brain or spinal cord tissue. The Immuno-PCR test will enable the detection of the prions in blood, cerebrospinal fluid or nerve tissue by combining two well-accepted testing methods: antigen capture and Polymerase Chain Reaction (PCR), into a two-stage Immuno-PCR testing regimen. SeraCare intends to commercialize the test by the end of this year. (Meating Place)  
>  CowChips LLC announced the acquisition of livestock industry technologies formerly owned and licensed by DDx, Inc.  The acquisition includes the products, core patents, and marketing rights to such cattle estrus detection techniques as HeatWatch and MountCount.  Financial terms were not disclosed.  (company press release)  
>  Optibrand, Ltd. LLC announced that the State of Indiana will begin using retinal imaging to identify 4-H beef, sheep and goat projects. Sheep, goats and cattle will have their eyes scanned when 4-H participants enroll them at the beginning of the year. When the animal arrives at the fair, officials will be able to scan the animal again to verify that it is the same animal that was originally enrolled. (company press release)  
> Pet Ecology Brands, Inc. announced that the Company has signed a Letter of Intent to form a joint venture with Bridgetech Holdings International, Inc. regarding the manufacturing of Pet Ecology’s products in China and the distribution of the Pet Ecology products throughout Asia. The Bridgetech involvement and distribution of all Pet Ecology’s products in Asia could result in increased sales and growth for Pet Ecology of several million pounds of product, with a sales volume of up to $18 million over the next two years. (Business Wire)  
>  EU   The LEO Group announced a management buyout of its veterinary products division.  Effective April 1, 2005, the new company will be called VetXX, and will initially market the same portfolio of products, with plans to introduce three new prescription products and three new prescription diets in the next two years. Financial terms were not disclosed.  (company press release)  
In March 2004, Brakke Consulting published a report reviewing pain management in small animals, and the products used to treat pain.  The new 2005 report updates this report with current sales data on the pain management products used in small animal practice, as well as news on new and developing products in the pain management area. Included are sections on nutraceuticals and joint support prescription diets.
The report also includes a survey of small animal veterinarians regarding their usage of pain management products, including NSAIDs, nutraceuticals, and the new joint support therapeutic diets.
The report will be completed in 4 – 6 weeks.  Orders placed on or before March 25, 2005 will receive the early-bird discounted price of $4,750.  Orders received after March 25 will receive the regular price of $5,500.
For more information, contact Dr. Lynn Fondon at or 972-243-4033.
>  JAPAN – BSE  Japan has confirmed its 15th case of BSE in a cow from the country’s north.  The 8-year-old Holstein cow was already dead when it was brought in for testing from a ranch in Hobetsu, Hokkaido state earlier this week. (AP)
> US – CANADA FEED REVIEW   The technical team sent by the USDA to review the Canadian ruminant-to-ruminant feed ban and compliance by feed mills and operators has released its final report, and essentially it gives the Canadians a clean bill of health.  The team found compliance in the 90% range, with most violations of a technical nature, such as incomplete shipping addresses for customers. The report notes, however, that only a third of feed mills have become HACCP-certified, and that while violations have declined considerably in the past three years, 14.8% of mills have received unsatisfactory ratings on individual tasks. That is about half of the figure from 2002, when it stood at 24.9%. (Meating Place)
>  US – SENATE DELAYS CANADIAN BORDER OPENING   The US Senate voted to overturn the Bush administration’s decision to allow Canadian cattle into the country. The White House said President Bush would veto the measure if it ever reached his desk, warning that continuing to refuse Canadian beef would damage efforts to persuade other countries to buy US beef.  Supporters fell short of the two-thirds majority needed to override a veto. The Senate’s 52-46 vote was to reject the USDA’s decision to resume imports of Canadian cows under 30 months of age beginning next week. A similar measure has been introduced in the House, but leaders there have scheduled no vote on it. (AP)
>  US – INJUNCTION AGAINST CANADIAN BORDER OPENING  A federal district judge in Billings, Montana issued an injunction  prohibiting the USDA from opening the border to Canadian live cattle as scheduled next Monday. The hearing was prompted by a lawsuit filed by R-Calf USA, and the Judge’s  ruling will lead to a full trial later this month unless attorneys for the USDA succeed in an appeal. The USDA issued a final rule in December that defined the Canadian cattle herd as presenting minimal risk of BSE. R-CALF has contested that rule. (Drovers Alert)
>  US – E. COLI CONTAMINATION DECLINES   The USDA’s Food Safety & Inspection Service (FSIS) released data showing a 43.3% drop in the percentage of E. coli 0157:H7 positive ground beef regulatory samples collected in 2004 compared with the previous year. Of the 8,010 samples collected and analyzed in 2004, 0.17% tested positive for E. coli 0157:H7.  Between 2000 and 2004, the percentage of positive samples in FSIS regulatory sampling has declined by more than 80%. (Feedstuffs)
>  US – CALF SUPPLEMENT RESEARCH   An “infant formula” for calves that may help them fight infection from Salmonella and other microbes, especially during stressful time, -has been developed by researchers at the USDA’s Agricultural Research Service.  The dietary supplement alters calves’ immunity enough to help them cope with transport stress, which appears to be among the worst sources of stress early in an animal’s life. The formula contains beta-glucan from yeast cell walls and vitamin C. Studies showed it reduced stress in Holstein dairy calves taken from their mothers within 24 hours after birth and transported, and the formula seems to work with the mother’s colostrum. (AnimalNet – ARS News Service)
> US – SENIOR CARE GUIDELINES RELEASES   The American Animal Hospital Association (AAHA) has released the AAHA Senior Care Guidelines for Dogs and Cats to provide a framework for practitioners dedicated to enhancing the well-being of senior pets. The guidelines were approved by the AAHA Board of Directors at its October 2004 meeting and published in the March/April 2005 issues of the Journal of the American Animal Hospital Association and Trends magazine. The guidelines are available on the AAHA website at  The AAHA Senior Care Guidelines were developed by a task force composed of seven expert veterinarians, representing a broad range of specialty fields. The guidelines are sponsored by an educational grant from IDEXX Laboratories. (association press release)

Animal Health Marketing Conference
March 31-April 1, 2005
Washington DC

CBI’s Animal Health Marketing conference, March 31-April 1, 2005 in Washington, DC, convenes sales and marketing executives interested in exploring valuable promotional tools, and providing them with a networking opportunity unavailable at any other industry event.  To Register or for more details please visit Mention HB530BC and receive $200 off of your registration fee.
The Animal Health News section of this week’s newsletter reports on various food safety issues that continue to need industry attention.
Another area of concern for the protein production segment of animal health is the issue of animal welfare.  Animal welfare is important to all companies involved in protein production, processing and marketing.  We encourage companies and individuals to participate in the Animal Agriculture Alliance’s Stakeholders Summit on March 21 – 23, which will focus on animal welfare issues.  You will find information regarding registration for the Stakeholders Summit at
We’ve now completed the first two months of 2005 and the general business outlook remains positive.  There is some concern over continued high energy costs and some escalating feed grain prices.  We’ll keep you posted with our views during the year.
Have a great weekend.
Ron Brakke
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