The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for January 31, 2003

Copyright © Brakke Consulting, Inc.

>  Wyeth Labs reported fourth quarter and full year results for 2002.  Revenues for its animal health division Fort Dodge declined 22% to $170 million in the fourth quarter of 2002, primarily due to lower sales and higher than projected returns of ProHeart offset, in part, by higher sales of the company’s West Nile vaccine for horses.  Revenues for the full year declined 16% to $653 million.  (company website)

>  IDEXX Laboratories, Inc. reported that net income increased 30% to $12.8 million for the quarter ended December 31, 2002, from $9.8 million for the same period in
the prior year.  Revenue for the fourth quarter of 2002 increased 11% to $105.9 million from $95.1 million for the fourth quarter of 2001. Companion Animal Group revenue for the fourth quarter of 2002 increased 12% to $83.7 million from $74.9 million for the fourth quarter of 2001.  This increase resulted primarily from increased sales of instrument consumables, laboratory services and rapid assays, and sale of 114 units of the Company’s
LaserCyte hematology system, which was introduced commercially in the quarter.  Net income increased 21% to $45.4 million for the year ended December 31, 2002, from $37.6 million for 2001.  Revenue for the year increased 7% to $412.7 million from $386.1 million for 2001. (company press release)

>  Tyson Foods reported earnings for the first quarter of fiscal 2003 were $39 million, compared to $127 million for the same period last year. First quarter 2003 sales were $5.8 billion, compared to $5.9 billion last year. Earnings for the first quarter included $47 million of costs related to the closing of two poultry operations that are partially offset by $28 million received in connection with ongoing vitamin antitrust litigation. (Meating Place)

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


>  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 oral use of lincomycin soluble powder to make medicated drinking water for administration to swine for the treatment of swine dysentery or to broiler chickens for the control of necrotic enteritis. (AnimalNet – Federal Register)

>  The FDA amended the animal drug regulations to reflect approval of an abbreviated new animal drug application (ANADA) filed by First Priority, Inc. The ANADA provides for topical use of ivermectin on cattle for treatment and control of various species of external and internal parasites. (AnimalNet – Federal Register)

>  Embrex, Inc. announced two key U.S. patents issued recently by the U.S. Patent and Trademark Office. The two patents relate to a method of vaccinating domesticated birds including chicken or turkey against coccidiosis before hatch.
The patents issued from applications filed by Pfizer Inc. and worldwide rights were exclusively licensed to Embrex by Pfizer in June 2001. The patents relate to administering in ovo (in the egg) an effective immunizing dose of live Eimeria, the causative agent of coccidiosis. (company website)

> PETsMART, Inc. has settled pending litigation with certain former shareholders of Pet City Holdings, and has agreed to pay $16.4 million in cash. The settlement related to litigation that sought damages from PETsMART in connection with PETsMART’s 1996 acquisition of Pet City, a United Kingdom pet supply chain. (Business Wire)

>  Central Garden Pet Company announced that it has closed a private placement of $150 million aggregate principal amount of 9-1/8% Senior Subordinated Notes due 2013.  The net proceeds of the offering will be used to redeem its outstanding convertible notes as of February 14, 2003, including the payment of premium and accrued interest, reduce a portion of the outstanding indebtedness under its senior credit facilities, and pay related fees and expenses. (Business Wire)

>  Nebraska Beef Ltd., a meatpacker linked to an E. coli outbreak, reached an agreement with the USDA to stave off its shutdown. USDA officials had sought to close Nebraska Beef, starting on Jan. 14, until it corrected unsanitary conditions and inadequate food safety systems.  The meatpacker went to court to stop the government action, and the judge had issued a temporary restraining order against the USDA. But just before a court hearing on the dispute was scheduled to start, the two sides reached a settlement that will allow Nebraska Beef to stay open. The terms of the settlement were not disclosed. (AP)

>  GeneLink, Inc. announced it signed a distribution agreement with FoodScience Corporation to develop and market personalized nutritional products linked to GeneLink’s proprietary genetic assessment technology.  The agreement authorizes FoodScience Corporation to distribute GeneLink’s patented DNA Collection Kit and Nutragenetic Profile Assessments and related products.  FoodScience’s six product divisions include: DaVinci Laboratories, FoodScience Laboratories, Mountain Naturals, Vetri-Science Laboratories, U.S. Animal Nutritionals and Pet Naturals of Vermont. (Business Wire)


The Association of Veterinary Practice Management Consultants and Advisors (AVPMCA) held their second annual meeting in Orlando, Florida, prior to the North American Veterinary Conference.  Over sixty attendees, including 10 new members, spent the day learning about marketing in the dental profession and how successful program in other professions could benefit veterinarians and their practices.  Further information about AVPMCA is available on their website at


>  US   About 250,000 chickens were destroyed at one of Southern California’s largest egg farms after testing positive for Exotic Newcastle Disease, according to the Los Angeles Times. The chickens were being killed at Norco Ranch, which houses about 3 million chickens. Since the disease was first discovered in backyard flocks in September, the state has been forced to destroy more than 1.7 million chickens. (Meating Place)

>  US   A federal judge in Iowa ruled that the law that prevents packers from owning livestock within the state is unconstitutional. The judge’s decision stated that the ban “unconstitutionally discriminates against out-of-state interests in favor of local ones. The statute blatantly protects the rights of Iowans to engage in conduct forbidden to out-of-state entities.”  This marked the first legal challenge to the state’s corporate-farming law, which has served as a model for other states. Last May, a similar state law in South Dakota was overturned.  (Pork Alert)

>  US   USDA livestock slaughter totals show that 2002 commercial-beef production was a record 27.09 billion pounds, 3.8% more than in 2001 and 1.2% more than the old record year of 2000.  Steer slaughter was up 2.5% but heifer slaughter was down 0.3% and cow slaughter was also down 0.3% compared to 2001. The increase in steer slaughter in combination with a drop in cow and heifer slaughter is a strong indication that producers are edging closer to an expansion in the cow herd. The U.S. cattle herd has declined each of the last 6 years. (Drovers Alert)

>  US   PETA has asked the San Diego Padres to back out of a deal giving the PETCO retail firm naming rights to the team’s new downtown ballpark, alleging animal cruelty at some of PETCO’s stores.  A letter sent this week to Padres officials asks the team to cancel a 22-year contract to name the new field Petco Park. The Padres president said the team had investigated PETA’s claim and was comfortable that PETCO was “handling the situation well.’’ (AP)

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


We have enjoyed the 2003 Cattle Industry Annual Convention & Trade Show in Nashville, TN. This meeting was attended by 7,000 producers and individuals supporting the production of beef.  Included in the registration were over 40 government officials, including two Cabinet Secretaries.  Ann Veneman, Secretary, USDA and Gale Norton, Secretary of the Department of Interior (DOI) both addressed those in attendance.  The participation of government officials is unprecedented and demonstrates the importance and impact of the Cattle Industry on the economy.  “This Convention is an important place to be if you have an interest in the issues affecting the U.S. Cattle Industry,” says NCBA President Wythe Willey.

Brakke Consulting appreciates the opportunity to participate in the activities of the NCBA.  The NCBA is one of the leading organizations within the Animal Health Industry. It deserves your support in dealing with the issues facing the production of animal protein.

Have a great weekend.
Ron Brakke

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