The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for February 7, 2003

Copyright © Brakke Consulting, Inc.

>  Aventis reported that full-year sales for 2002 for its animal health business Merial – a 50-50 joint venture with Merck & Co. – rose 4% on an activity basis to EUR 1.825 billion ($1.9 billion).  This figure includes the poultry genetics business. (Business Wire)

>  Colgate-Palmolive reported results for the fourth quarter and full year 2002.  Hill’s Pet Nutrition’s (14% of Company Sales) fourth quarter unit volume grew 5.0%, dollar sales increased 9.0% and dollar operating profit grew 16% to an all-time record high. Continued improvements in supply chain efficiencies generated savings that funded record high levels of advertising for the quarter and the year. For full year 2002, volume increased 5.5%, dollar sales grew 7.0% and operating profit grew 13% versus 2001.  At 14% of company sales, Hill’s full-year sales would be an estimated $1.3 billion. (Business Wire)

>  Procter & Gamble reported that pet health and nutrition (the Iams Company) volume increased 10% behind continued growth in the United States. (company website)

>  ImmuCell Corporation announced the results of its operations for the fourth quarter and year ended December 31, 2002.  During the year ended December 31, 2002, total revenues decreased by 7% to $6.2 million and product sales decreased by 17% to $5.3 million compared to the same periods in 2001. Net income of $886,000 during the year ended December 31, 2002 increased by 111% from the same period in 2001. (Business Wire)

New Brakke Consulting market study:

 – 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


>  The 19th International Feed Industry Symposium, sponsored by Alltech, will be held in Lexington, Kentucky, May 11-14 of this year. This global multi-species scientific meeting has attracted more than 1,000 people in the past and features a range of technical conferences on ruminants, pigs, poultry, equine and pet nutrition as well as the human food industry. For the first time, this year’s meeting boasts a session on aquaculture, featuring recent developments in this industry. There will also be an agronomics conference in conjunction with the 2003 Symposium. For details log on to (company press relelase)

>  The FDA amended the animal drug regulations to reflect approval of an abbreviated new animal drug application (ANADA) filed by Phoenix Scientific, Inc. The ANADA provides for use of levamisole hydrochloride soluble powder in the drinking water of swine for the treatment of various internal parasites. (AnimalNet – Federal Register)

>  Heska announced the recent issuance of the first in an intended series of patents covering the company’s flea genomics technology.  This technology has permitted the discovery of a large collection of flea molecules that represent targets for use in the development of flea control products.  This patent covers the molecules that encode an enzyme that is critical in nitrogen waste excretion by the flea, but is not found in mammals. (company press release)

> Comfort Zone with D.A.P. has been named one of the 10 most innovative consumer products of 2002 by Productscan Online, the world’s largest database of new products.  Comfort Zone is a plug-in diffuser that calms dogs by emitting synthetic pheromones, and was the only pet product named among the top 10 consumer products in the report. The D.A.P. plug-in diffuser calms dogs by emitting synthetic pheromones that mimic the naturally released pheromones of a lactating female dog.  Comfort Zone with D.A.P is marketed through specialty pet retailers by Farnam Pet Products, and through veterinarians by Veterinary Products Laboratories simply as D.A.P.  (company press release)

>  Biopure Corporation announced that it will resume shipping Oxyglobin to US veterinary hospitals and clinics in mid February 2003.  Following discussions with the FDA, the company has resolved its previously reported manufacturing documentation issue and has lifted its voluntary hold on Oxyglobin inventory.  Biopure has produced and inventoried more than 20,000 units of Oxyglobin since its recently expanded manufacturing facilities reopened, which it will use to fill more than 11,000 units on backorder beginning in mid February, and it is continuing to manufacture new product lots for sale. (company press release)

>  Oil-Dri Corp of America announced the completion of the acquisition of certain assets related to the Jonny Cat brand of cat litter from The Clorox Company. The acquired assets generate revenues of approximately $18 million include cat litter, liners, industrial absorbents and agricultural carriers.  Financial terms were not disclosed. (Pet Business)

>  International Absorbents announced that it has filed for listing on the American Stock Exchange.  The timing on when a listing decision will be forthcoming has not been determined.  (Pet Business)

>  The 2,000-plus member Florida Veterinary Medical Association (FVMA) has selected veterinarian owned and managed PetsVetsandYou, Inc., (PVY) as its web site design, hosting and online marketing Vendor of Choice. The agreement calls for the initial focus to be on helping FVMA members develop individual web sites to help them market their practices and deal more efficiently with existing clients. (Business Wire)

>  Radio Systems Corp, maker of PetSafe products, announced plans to open a 20,000 sf state-of-the-art pet training and behavior center adjacent to its corporate headquarters.  The facility includes an indoor training center, a canine fitness center, a grooming area, cat condominiums, and a dog boarding area that includes several luxury suites with television, telephone, private outdoor garden, and private training lessons.  The PetSafe Village is designed to allow the company to interact with thousands of pet owners and professional trainers. (Pet Business)

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

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 for further information.  You may also register for the presentation online at


>  US   Exotic Newcastle Disease has been found in a flock of 30 chickens on the Colorado River Indian Tribes’ reservation in Western Arizona. The disease had earlier been found in Nevada. Arizona Gov. is preparing a state of emergency declaration for three Arizona counties. There is as yet no sign the disease had spread to Arizona’s poultry industry. (AnimalNet – Reuters)

>  HONG KONG   8,300 chickens were culled in a poultry farm in Hong Kong to contain the spread of avian flu. A farmer immediately culled the chickens after two swab samples from dead chickens were tested for the presence of H5 avian influenza. Vaccination has been introduced in 112 out of a total of 157 poultry farms in Hong Kong since January 8. (Meating Place)

>  US   Two more supermarket chains announced they will sell irradiated fresh ground beef. The Pick ’n Save chain operates 82 stores throughout Wisconsin. Stop & Shop Supermarket Co. operates more than 336 stores in Massachusetts, Rhode Island, Connecticut, New York and New Jersey. Both chains will label the irradiated ground beef as such, and both will offer irradiated ground beef in addition to non-irradiated ground beef. (Drovers Alert)

>  CANADA    Research at the Atlantic Veterinary College in Prince Edward Island, Canada has determined that testing for levels of leutinizing hormone (LH) can be used to evaluate whether a female dog has been spayed.  The research found that spayed dogs test positive for LH continuously, as opposed to twice a year for intact dogs.  The test could be used to ensure that dogs scheduled for spaying have not already been spayed.  (Veterinary Practice News)
>  AUSTRALIA   After conducting an International search, Australian Wool Innovation (AWI) has uncovered two prospective new products with the potential to assist producers combat the sizable problem of intestinal worms in sheep.  The search found two unique molecules that are currently being tested. (Southern Weekly Magazine)

Schedule Your Place at the Las Vegas Overview Now

The Industry Overview will be presented at the Western Veterinary Conference in Las Vegas on Wednesday, February 19, 2003 at 9:30 am. 

The following are some of the items that will be covered in the presentation:
 – What events have most affected the animal health industry in the last five years?
 – What changes will affect the industry in the next five years?
 – What have other companies done to increase their success?
 – Which markets are increasing and which are decreasing?
 – Where are new opportunities being developed?
 – What will the industry look like in 2012?
 – Who will the leading companies be 2012?

To register for the presentation, please call Jane Morgan at 972-243-4033 or email, or register online at


Like many of you, we have now completed three-plus weeks of industry-related meetings.  It appears to us that 2003 is off to a reasonably strong start.  In meeting with many of you during this period, I’m reminded of the book “Competing on the Edge.”  In a marketplace where sales growth has been less than spectacular the past few years, the pressure on management to outperform the market provides fodder for plenty of stress.

As many of you begin to proceed with the 2003 strategic plan updates within your companies, we’d like to remind you that business strategy is a “diverse collection of moves that are loosely linked together in a semi-coherent direction.  Managers who compete on the edge let strategy emerge by making a variety of moves, seeing what happens, and following through on those that work.  They end up playing a broader and more surprising set of strategic options than others.” (Competing on the Edge, Shona Brown and Kathleen Eisenhardt)

Have a great weekend.
Ron Brakke

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