Animal Health News & Notes for February 21, 2003

******************************************************************
Brakke Consulting’s
Animal Health News & Notes for February 21, 2003
Copyright © Brakke Consulting, Inc.
******************************************************************
COMPANY EARNINGS RELEASES

>  Akzo Nobel announced that year-end 2002 sales for its animal health division Intervet were down 1% to 1,081 million euros ($1,133 million), due to pressure from soft market conditions, particularly in Latin America, and weak key currencies.  Sales for the fourth quarter 2002 were 264 million euros ($277 million).  (company website)

>  Pharmacia reported that its Animal Health division continued its growth with sales up 7% in the quarter to $134 million, and up 8% for the full year to $506 million.  (company website)

>  Provimi sa announced that unaudited preliminary results showed that sales rose 2.2% in 2002 to 1.5 billion euros ($1.63 billion). The company indicated that premix and specialty businesses in Netherlands, France and Spain strengthened considerably, and that China also reported improved results. But restructuring costs in the French aquafeed business, plant start-up costs in Chile and continued weakness in Poland reduced preliminary operating income by 0.7% to 94.7 million euros. (Watt Feed Enews)

>  Patterson Dental announced that sales of the Webster Veterinary Supply unit in the third fiscal quarter ended January 25, 2003 increased 8% to $40.2 million. (Business Wire)

>  Virbac Corporation reported financial results for the fourth quarter and twelve months ended December 31, 2002. For the fourth quarter 2002, net sales increased 9%, reaching $16.3 million, compared with $15.0 million in the 2001 fourth quarter. Sales for the Veterinary Division, the Company’s largest growth driver, jumped 32% to a record $8.6 million. Net income for the fourth quarter 2002 was $1.0 million compared with $27,000 for the comparable quarter of 2001. For the twelve months ended December 31, 2002, net sales grew 5%, reaching a record $63.8 million, fueled by Veterinarian Division sales, which grew 29% year-over-year. Net income for the year was a record $3.4 million compared with $1.3 million in 2001.(Business Wire)

>  Despite the sluggish economy, Veterinary Pet Insurance (VPI) experienced a 45% growth rate in 2002, the strongest in its 20 year history.  Gross sales for 2002 reached $74.8 million, an increase from $51.7 million for the previous year. (company press release)

>  VCA Antech reported fourth quarter and full year results for 2002.  For the fourth quarter of 2002, the Company reported under generally accepted accounting principles the following:  revenue increased 11.1% to a record $106.7 million from $96.0 million in 2001; and net income, before extraordinary item, increased to $3.3 million from a loss of $10.5 million in 2001. For the full 2002 year, the Company reported under generally accepted accounting principles the following:  revenue increased 10.5% to a record $443.5 million from $401.4 million in 2001; and net income, before extraordinary item, increased to $28.4 million from a loss of $17.3 million in 2001.  (company press release)

>  Maple Leaf Foods Inc. reported its financial results for the year ended December 31, 2002.  Sales for the year 2002 increased to $5.1 billion from $4.8 billion for 2001. Net earnings for the year were $84.7 million. (Business Wire)

********************************************************************
Brakke Consulting Due Diligence Seminar 
Kansas City: March 11-12, 2003

TODAY IS THE LAST DAY TO REGISTER AT THE EARLY BIRD PRICE

Whether your company is licensing technology in or out, buying, or selling a business or product line, this seminar will help you design an efficient, effective due diligence process that will help you test strategic assumptions, determine fair market value, uncover potential problems, identify opportunities and avoid costly mistakes or surprises.  The speakers at the seminar will include Brakke Consultants and senior investment bankers from a major investment bank. All of the speakers have extensive experience in product and compound licensing, divestitures, and acquisitions.

This two-day seminar was successfully conducted in 2001 and 2002 in various US and International locations.  Registration is $1,250 if registered on or before February 21, 2003 and $1,500 if registered after February 21, 2001. Registration is limited. 

Please contact Jane Morgan at the Dallas office 972-243-4033 or by email at jmorgan@brakkeconsulting.com for further information.  You may also register for the presentation online at www.brakkeconsulting.com.

******************************************************************
COMPANY NEWS RELEASES

>  Merial and SomaLogic announced a research collaboration to develop SomaLogic’s diagnostic technology for BSE.  SomaLogic’s technology is based on aptamers, single-stranded DNA molecules that bind target molecules with high affinity and specificity.  Financial terms were not disclosed.  (Animal Pharm)

>  Fort Dodge announced that the USDA has issued a full license for the equine West Nile virus vaccine, West Nile – Innovator.  The original conditional license for the vaccine was issued in August 2001 under expedited review.  One of the keys to conversion from conditional to full license status was satisfying USDA requirements for proof of efficacy.  (company press release)

>  Cross VetPharm Group/Bimeda announced the acquisition of certain assets of Anthony Products, including its injectable penicillin operations.  The newly acquired business will operate as a dedicated beta-lactam products development and manufacturing facility.  The new business will be integrated into the Bimeda North American business unit.  Financial terms were not disclosed. (Feedstuffs)

>  Veterinary Pet Insurance (VPI) announced that it will underwrite the Seventeenth Annual Genesis Awards.  The awards pay tribute to professionals in the media and entertainment community who have influenced and raised awareness on animal-protection issues. The Genesis Awards will take place on March 15, 2003 and will air on Animal Planet in May. (company press release)

>  Farmland Industries has announced a deal to sell most of its fertilizer business to a unit of Koch Industries for $270 million. Koch Nitrogen has offered $104 million for Farmland’s four fertilizer plants in the United States and $86 million for its 50 percent interest in a fertilizer plant in the republic of Trinidad and Tobago. It also would assume $79.1 million debt. (Drovers Alert)

>  Virbac Corporation announced that it intends to close its Harbor City, CA manufacturing facility, transferring the operations to its Fort Worth facility, which it expects to complete by February 28, 2003.  The Harbor City facility produced oral hygiene products, including Petrodex and C.E.T. toothpaste, and housed blistering and tablet filling operations. (Business Wire)

>  Wellmark International announced that the EPA approved Altosid IGR Feed-Thru for a feeding rate of eight ounces per day in tubs. The active ingredient in the product is methoprene, an insect growth regulator (IGR) that interrupts the horn fly life cycle, preventing fly pupae from developing into breeding, biting adults. The product passes through cows’ digestive systems and into their manure, where horn flies lay eggs. The new registration allows a formulation of 0.005% methoprene in tubs. (Wattnet Feed Enews)

>  Veterinary Products Laboratories announced that Duralactin has demonstrated positive results in a multi-site, double blind, placebo-controlled study in older dogs with musculoskeletal disorders.  Duralactin is a patented, milk-based ingredient obtained from the milk of grass-fed cows in New Zealand.  The product is licensed by VPL from Stolle Milk Biologics, Inc.  (company press release)

>   The FDA amended the animal drug regulations to reflect approval of a supplemental abbreviated new animal drug application (ANADA) filed by Phoenix Scientific, Inc. The supplemental ANADA provides for the administration of an oxytetracycline injectable solution to lactating dairy cattle. (AnimalNet – Federal Register)

>  FRANCE   Scil Animal Care launched in France Uricult Plus, a new diagnostic for urinary tract and enterococci infections in animals.  Uricult enables the detection of urinary tract pathogens within 16 – 24 hours, and provides a high correlation with conventional diagnostic laboratory procedures. (Animal Pharm)

********************************************************************
New Brakke Consulting market study:
THE US SMALL ANIMAL VACCINE MARKET
NOW AVAILABLE

 – What are veterinarians’ opinions of vaccine manufacturers?
 – Are veterinarians changing their vaccine protocols because of fears over vaccinosarcomas or media attention to “overvaccination”? 
 – If they are, what are they doing in place of the annual vaccines to assure pets are still immune?
 – How popular is Fort Dodge’s new FIV vaccine?
 – What lies in the future for dog and cat vaccines?

These are a few of the critical questions that are answered in Brakke Consulting’s new study, The US Small Animal Vaccine Market. The report will include an overview of the small animal vaccine market, including market size, market shares, leading vaccines, and profiles of major vaccine manufacturers.  The report also covers a survey of veterinary practitioners regarding current vaccination protocols, veterinary opinion about the topic of “overvaccination,” and vaccine manufacturer rankings.  There is a special section on current issues in small animal vaccination, including feline vaccinosarcomas, overvaccination, and titer testing.

The US Small Animal Vaccine Market is now available for immediate delivery, at a purchase price of $4,000. For more information, please call Dr. Lynn Fondon at 972-243-4033 or email lfondon@brakkeconsulting.com

******************************************************************
ANIMAL HEALTH NEWS

>  The Animal Agriculture Alliance has announced plans to host its second industry-wide Stakeholders Summit.  This two-day conference, “Challenges to the US Animal Protein Businesses: Domestic and International Responses, Risks and Repositioning,” is scheduled for May 12th – 14th at the Hyatt Regency Hotel, Crystal City, Virginia. In cooperation with Brakke Consulting, Inc. and Rabobank International, the Summit is targeted at senior management of all companies involved from “farm to fork.”  Summit registration and hotel information will be available on the Alliance website within the next two weeks at www.animalagalliance.org.  The Animal Agriculture Alliance is a broad-based coalition of individual producers, producer organizations, private industry, packer-processors and retailers, whose mission is to support and promote animal agriculture practices that provide for farm animal well-being through sound science and public information.

>  US   The highly contagious Exotic Newcastle Disease has been found on four more commercial poultry farms within Southern California’s quarantine zone, the most reported in a single day since the outbreak began more than four months ago. These discoveries bring the total number of commercial farms affected to 12, and the number of birds destroyed or slated for destruction to 2.4 million, according to the Los Angeles Times. (Meating Place)

>  SCOTLAND   Dolly the sheep, who gained world notoriety six years ago as the first mammal cloned from an adult cell, was euthanized after being diagnosed with lung cancer. The Rosilyn Institute, the Scottish research center that created her, announced her death Friday (Feb. 14). A post-mortem had yet to be performed, but that the decision to euthanize the sheep was made after a veterinary examination found the progressive lung disease. (Meating Place)

>  US   The FDA’s Center for Food Safety and Applied Nutrition (CFSAN) ordered a recall of a mineral premix in California, Iowa, Illinois, Minnesota, Mississippi, Missouri, Nebraska, Pennsylvania, Utah and Washington. The source is a zinc oxide and copper oxide product from a smelter. The agency said it suspects the dioxin was created during the smelting process. The agency said it still needs to perform a health hazard evaluation. (Wattnet Feed Enews)

> US   A strain of avian influenza that has been endemic in live bird markets can now be detected quickly using a new laboratory test developed by an Agricultural Research Service scientist. ARS developed the test to quickly identify birds infected with the avian influenza strain H7N2, which has been found among birds in northeastern U.S. markets since 1994. The laboratory test, called the real-time reverse transcriptase-polymerase chain reaction test (RT-PCR), uses a fluorescent probe and produces results in less than 3 hours. This new test may aid in identifying the viruses earlier and with more accuracy, therefore helping to control the disease and reduce such economic losses. (AnimalNet – ARS News Service)

>  US   A settlement has been proposed in class action lawsuits brought on behalf of all persons and entities who operated farms in the United States from which corn grown for grain was harvested since 1998 (the “Settlement Class”), regarding potential economic damage related to StarLink corn.  This Settlement covers farmers and other persons with a financial interest in non-StarLink corn harvested between 1998 and the present.  The Settlement provides for payment of $110 million, plus accruing interest, which will be paid in cash, or through distribution of prepaid cards. Two types of compensation are offered to Non-StarLink farmers who file timely and properly completed Proofs of Claims Property Damage and Corn Loss. (PRNewswire)

>  US   A researcher from Tulane University has identified the major shrimp allergen, a muscle protein called tropomysin, which can cause allergic responses of itchiness around the eyes, throat, skin and mouth. By using biotechnology, researchers are attempting to modify the protein’s amino-acid sequence in an attempt to make shrimp allergen-free.  The researchers are modifying the protein’s amino acid sequence so that it cannot bind with IgE. (Food Systems Insider)

*******************************************************************
BRAKKE CONSULTING VIEWPOINT

It was great to see so many of you at the Western Veterinary Conference earlier this week.  We hope you had a productive and enjoyable meeting.  Dr. Stephen Crane and the staff of the conference did a great job. Congratulations!!  It was a pleasure to attend such a well-organized and well-managed meeting.

Earlier in the newsletter, you read the announcement from the Animal Agricultural Alliance related to the Second Stake Holders Summit to be held in Washington, DC May 12-14th.  The conference will address the “Challenges to the US Animal Protein Business: Domestic and International Responses, Risks and Repositioning.” Every company reading this newsletter and providing products or services to this US Animal Protein Market should have at least one senior executive in attendance. Speakers from some of the leading production, finance, biotechnology, government agencies, retail and food services have agreed to participate. The goal of the conference is to provide CEO’s, COO’s, CFO’s and Senior Managers with insights and information to successfully meet future challenges.  We encourage your attendance at this important Summit for our Industry.

Have a great weekend!
 
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 www.brakkeconsulting.com.

In order to receive the HTML version instead of the text version of this newsletter, use the link at the bottom of this week’s newsletter that states: “If you would like for us to remove your name from the circulation list, or if you need to change your profile or email address, please click here”.  Then click on the button below your email address that says HTML, and click “Update subscription.”