The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for November 9, 2001
Copyright © Brakke Consulting, Inc.
Company Earnings Releases

>  Aventis reported that In the first nine months of 2001, sales by the animal health business Merial rose 6.6% on an activity basis to € 1.408 billion ($1.28 billion).  This figure includes the poultry genetics business.  (company press release)

>  Alpharma reported that, for the third quarter 2001, Animal Pharmaceuticals revenue decreased 9% to $85.4 million when compared to the same period last year.  Operating income in the third quarter declined 34% to $12.4 million.  Increases in U.S. swine and cattle product sales were offset by declines in poultry product sales. This decline was caused, in part, by continuing weak conditions in the U.S. poultry market, together with continuing softness in Asian markets. In addition, the Division’s blending facility and warehouse in Lowell, Arkansas were closed in late September due to a fire.  Operating income in the third quarter was negatively impacted by approximately $3 to $4 million due primarily to shipping delays associated with the fire.  The company expects that all material clean-up and re-building expenses relating to this fire will be reimbursed by insurance. (company press release)

>  Alpharma Inc. announced the completion of its previously announced revision of financial statements. The revision results predominately from modifying revenue recognition for specific customer orders in the company’s Animal Health Division in 1998, 1999 and 2000 from the time the order was identified by third party warehouses and billed, to a subsequent period when the order was delivered.  The effect of this revision is an increase in previously reported revenue and
operating income in the first half of 2001 by approximately $36 million and $22 million, respectively.  An aggregate reduction of approximately the same amount of sales and operating income resulted over the 1998-2000 fiscal years. (PRNewswire)

Company News Releases

>  Alpharma Inc. announced that Ms. Carol Wrenn has been named President of its Animal
Health Division.  Ms. Wrenn will be an officer of Alpharma Inc., and a member of the company’s operating committee. Mr. Bruce Andrews, former President of the Animal Health Division, will be retiring from the company.  Ms. Wrenn will be joining Alpharma following a seventeen-year tenure at AlliedSignal, which merged with Honeywell International in 1999. (PRNewswire)

>   Heska Corporation announced that it has initiated clinical trials of its proprietary gene-based therapy for canine cancer.  In preclinical studies, this therapy resulted in the shrinkage or elimination of several soft tissue sarcomas and was safe and well tolerated. The product encodes potent immune stimulants that initiate or boost the dog’s own immune response against the cancer.  The studies will measure the response of soft tissue sarcomas and oral malignant
melanomas to six weekly injections of the gene therapy, after which any remaining tumor will be surgically removed.  Follow-on studies are planned to evaluate how long the dogs are cancer free and whether treatment improves their long-term survival. (PRNewswire)

>  Smithfield Foods, Inc., announced an agreement in principle to acquire beef packer American Foods Group, Inc. When completed, the company’s third beef processing acquisition of the year will thrust the company into the No. 4 position in the industry with a 9% market share. American Foods has sales of $581 million in boxed beef, ground beef and value-added beef products.  The acquisition of American Foods establishes Smithfield Foods as a major player in the U.S. beef industry, with annual sales of $2.6 billion and a processing capacity of 10,425 head of cattle a day. (Wattnet)

>  Ranchers Renaissance, one of the largest beef-production cooperatives in the U.S., announced that it has selected eMerge Interactive, Inc. to provide individual animal tracking and data management services for the cooperative’s quality controlled, grain-fed cattle for the third straight year.  These technologies enable the Ranchers Renaissance cooperative to provide a source and process-verified supply of cattle for retail branded beef-product programs. (PRNewswire)

>  Safepath Laboratories announced the introduction of its Trichinella Swine Antibody ELISA Test Kit.  The kit will detect antibodies to Trichinella spiralis from blood, serum, plasma, or tissue fluid (meat juice) and can be completed in about 30 minutes. The test has been cleared for Veterinary Use bye the USDA Biologics Division, and can be used on swine both ante, and post mortem.  The kit is currently being used in the pilot of the Trichinae Certification Program, which will provide consumers of fresh pork with the assurance that product is free of Trichinella. (AnimalNet – company press release)

>  AniGenics, Inc., an animal genomics company, announced a successful second equity financing round, totaling more than $2 million (including exercisable warrants).  The new
capital will be used to develop assays for genes influencing animal productivity, health and welfare, as well as food quality and safety.  The resulting technologies will identify animals of naturally superior genotypes and verify (or trace) sources of food of animal origin by their DNA
profiles. The equity financing was led by Foragen Technologies LP, an agbiotech venture fund managed by Foragen Technologies Management, Inc. and also included Champaign-Urbana Venture Fund LLC.  Separately, AniGenics initiated a research partnership with the American
Simmental Association (ASA), which has developed a comprehensive genetic evaluation program including a sophisticated sire evaluation system for carcass traits, a detailed database of production traits and corresponding DNA samples from Simmental and other prominent beef breeds. (PRNewswire)

>  DENMARK   Denmark’s two leading slaughterhouses, Steff-Houlberg and Danish Crown, have joined forces, although the merger still has to be approved by the competition authorities. The initiative to merge was taken by Steff-Houlberg.  Danish Crown’s activities are primarily directed towards the global pork markets; 85-90% of their pork is exported, and that percentage will not change significantly in connection with the merger since Steff-Houlberg also exports the majority of its production.  With this merger, the total export of the new Danish Crown will reach about DKK 29 billion ($3.5 billion), corresponding to more than 8% of the total Danish export of goods. (Wattnet Meatnews)

Brakke Consulting, Inc. announces second

New York City, Wednesday, November 28th and Thursday, November 29th, Brakke Consulting, Inc. will repeat its successful Due Diligence Seminar recently held in Chicago in September.  Registration is $1,250. Registration is limited.  Please contact Roger Cummings or Jane Morgan at the Dallas office 972-243-4033 or by email at or for further information.

Animal Health News

>  SLOVAKIA   Final tests confirmed the country’s second case of BSE in an animal identified as having the disease earlier this week. Slovakia’s first case of BSE surfaced at the end of September, making it the second east European country to register the disease after two cases appeared in the neighboring Czech Republic this summer. (Reuters)

>  UK    The UK pig industry is looking for more research into two potentially deadly diseases thought to have swept through a large portion of the national herd. Concern has been mounting for months about the economic impact of Post-weaning Multi-systemic Wasting Syndrome (PMWS) and Porcine Dermatitis Nephropathy Syndrome (PDNS), first spotted in the UK in 1998. A survey of major pig farms in England, due out soon, is expected to show that the pecentage of pigs infected has doubled since last December to up to 40%. The diseases have no known cure and have mortality rates of up to 30%. (Reuters)

>  US   September placements in US cattle feedlots with capacity of 1,000 or more head totaled 2.14 million head, 20% below placements in September 2000 and 23% below placements in 1999.  Marketing of fed cattle during September totaled 1.82 million head, 9% below the 2000 level. (Beef Business Bulletin)

>  US   The Connecticut Department of Agriculture has ordered the destruction of 16,000 chickens at a poultry farm where avian influenza virus has been discovered. The state quarantined the site October 12 and was to begin destroying the birds.  All poultry owners across New England were informed as to how to protect their flocks.  Tests taken from neighboring and area flocks have been negative. (AnimalNet – ProMED-mail)

>  NEW ZEALAND   New Zealand exports of some livestock, semen and embryos have been halted after an outbreak of Mycoplasma mycoides in goats and cattle.  The outbreak was found on five farms in the North Island province of Waikato and led to the withdrawal of 16 export certificates.  M. mycoides causes polyarthritis, a painful swelling in the joints of goats, and was known to cause disease in sheep, but had not previously been seen in cattle. The disease does not affect humans. (Reuters)

>  US   Beginning Monday, Nov. 19, most sheep and some goats age 18 months and older must be officially identified, as part of a new federal program to eradicate scrapie in the United States.
Further, breeding sheep and goats must by accompanied by a certificate of Veterinary Inspection (health certificate) to move into interstate commerce. Sheep and goats must be identified by either ear tags or tattoos.  (Meating Place)

>  Two teams of scientists have sequenced the genomes of two Salmonella bacteria, according to reports in Nature Science magazine. One (S. typhi) is responsible for typhoid and the other (S. typhimurium) for food poisoning.  The report says that the genomes should lead to new ways of diagnosing, treating and vaccinating against both diseases.  S. Typhimurium’s genome sequence reveals 50 previously unknown genes that code for proteins on its surface and these are potential targets for drugs or vaccines. (Wattnet)

>  US   The USDA is hiring 17 veterinarians to try to ensure that slaughterhouses nationwide are treating livestock humanely. It is also is creating an electronic database to track violations but denies there are widespread problems. This summer, Burger King accused the department of lax enforcement of a 1978 law that requires livestock to be rendered unconscious before they are bled and skinned. The Senate and House have passed resolutions urging tougher enforcement and put $1 million in a supplemental spending bill earlier this year to pay for it. The 17 veterinarians, who will be based at the food agency’s district offices, also will help oversee monitoring for animal diseases, such as BSE. (AP)

Brakke Consulting Viewpoint

Now that most of the companies have reported for the first 9 months of 2001 it looks like there will be a bid of growth in the market in 2001.  The top 10 companies have over 65% of the total market worldwide, so as they go, so generally goes the market.  We’re hearing some rather negative things in the marketplace related to pricing in the large animal area.  It is difficult enough to create new technology without taking away some of the gross margin that funds it.  Price discipline in the marketplace should be a required virtue in all VPs of sales.

Not a lot otherwise to comment on this week related to the reported news.  We welcome Carol Wrenn to the animal health industry as president of Alpharma Animal Health, and wish our friend Bruce Andrews the best in his retirement.  I would bet that the golf balls are going to catch a lot of flack in the next few weeks.  Remember, Bruce, “keep your head down and swing through the ball!”  Best of luck in your new endeavors.

 [Ron Brakke]
This electronic newsletter is the sole property of Brakke Consulting, Inc.
Any use of the contents herein should be approved by and appropriately attributed to Brakke Consulting, Inc.

For more information about Brakke Consulting’s services and syndicated studies, visit our website at

If this email was forwarded to you and you would like to be added to the circulation list, please send an email to ( with “add” typed in the subject line, and your name, title, and company affiliation in the body of the message, and you will be added to the mailing list.  If you would like for us to remove your name from the circulation list, please send an email to ( with “remove” and your name typed in the subject line.

en_USEnglish (United States)