The Experts in Animal Health

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 Brakke Consulting’s
 Animal Health News & Notes for June 18, 2004

 Copyright © Brakke Consulting, Inc.
see below for details

earnings news:
other news:
Boehringer Ingelheim Vetmedica (Ravap)
Boehringer Ingelheim Vetmedica (acepromazine)
Dogs International
Dog’s Outfitter
KMG Chemicals
Prairie Grove Farms
Smithfield Foods
> Provimi posted turnover of 375 million euros ($455 million) for the first quarter of 2004, a 1.1% increase on the previous year.  On a like-for-like basis, sales registered a 4.5% increase.  (Animal Pharm)  
Brakke Consulting is pleased to announce the upcoming 2004 Sales Force Effectiveness Study.  The new report will provide performance ratings for approximately 15 animal health company sales representatives, gathered from a survey of 700+ companion animal veterinary practitioners.
The 2004 report is a follow-up to the original Sales Force Effectiveness Study completed in 2002.  Methodology for the new study will be consistent with the prior study to allow companies to compare results from the two studies. The 2004 study will utilize a larger survey sample than the original, and will provide regional as well as national data.
Each company that purchases the report will receive a customized report for their organization.  Final reports will be issued by October 1, 2004.  Please contact Jay Lockhart at (314) 821-3368 or for more information, and to be sure your organization is included in the study.  Early-bird discounts are available for orders placed by JUNE 25, 2004, so call today.  
>  Transgene and Merial Limited announced a collaboration to develop products for animal health indications using Transgene’s vector platform. Under the terms of the agreement, Transgene will provide Merial with research and development support regarding vector-based expression of certain genes selected by Merial.  As part of the collaboration, Merial will conduct feasibility studies of different recombinant viruses in veterinary target species, and will have the right to execute an exclusive worldwide license for products originating from the research process. The agreement provides for non-material payments to Transgene during the research phase. (PRNewswire)  
>  KMG Chemicals announced the acquisition of the Ravap insecticide product line from Boehringer Ingelheim Vetmedica.  Ravap is an insecticide used in the poultry and livestock industries containing the active ingredient tetrachlorvinphos (Rabon).  Financial terms were not disclosed. (Feedstuffs)   
>  The FDA amended the animal drug regulations to reflect approval of an abbreviated new animal drug application (ANADA) filed by Boehringer Ingelheim Vetmedica.  The ANADA provides for the veterinary prescription use of acepromazine maleate injectable solution in dogs, cats, and horses as a tranquilizer. (AnimalNet – Federal Register) 
>  Farnam Horse Products announced the launch of Ascend Gel, a new line of nutritional supplements for horses.  The Ascend Gel line includes hoof health, joint health, skin and coat health, and performance electrolyte products.  The supplements come in a palatable gel formulation that sticks to feed and is packaged in single serving packages, and also as a two-month supply bottle with a single-serving pump dispenser.  (company press release)   
>  A Texas court of appeals has sided with PETCO in a lawsuit that had awarded damages for mental anguish and loss of companionship to a dog owner whose pet escaped and was killed while under the supervision of PETCO’s grooming department.  The appeals court reduced the damages awarded the plaintiff by more than $30,000.  While it rejected the awards for mental anguish and loss of companionship, the court did uphold the award for the replacement value of her dog, other pet-related expenses, and the plaintiff’s attorney fees. (Pet Product News)  
>  Prairie Grove Farms LLC, an independent producer of natural, antibiotic-free pork, and Excel Corp. have signed an agreement to jointly market the Prairie Grove Farms brand of pork from naturally raised pigs. Prairie Grove Farms LLC works with 23 Midwest family farmers to raise about 150,000 pigs per year. All of those hogs will be processed at Excel’s pork processing facility in Wapello County, Iowa. Of the total number of hogs raised, approximately 110,000 receive no antibiotics while they are raised, and the pork from those animals will be directed into the Prairie Grove Farms program. (Wattnet Meatnews)   
>  Murphy-Brown, a subsidiary of Smithfield Foods, announced it is offering its environmental management system free of charge to all producers. The EMS program consists of policies, procedures and practices designed to help ensure that producers are maintaining high environmental standards on pork production operations. The package includes a guidance manual, a copy of an existing EMS in use on a North Carolina pork operation and
fill-in-the-blank EMS templates that can be customized for individual operations.  (Pork Alert)  
> Banfield, The Pet Hospital announced a long-term strategic agreement with RemoteVet to provide all of Banfield’s ultrasound and telemedicine products. RemoteVet was founded in 1991 to develop, manufacture, and distribute digital ultrasound and digital radiography systems, and provide extensive training to the veterinary profession in these modalities.  Currently, approximately 10% of Banfield’s 380 full-service hospitals have ultrasound and telemedicine capabilities. Through its agreement with RemoteVet, Banfield intends to greatly increase this number. (company press release)  
>  Dogs International announced it was terminating all negotiations with PetsUnited.  On Aug. 20, 2003, Dogs International executed a letter of intent with PetsUnited to acquire 100% of the membership interest of PetsUnited, with assets mainly consisting of The Dog’s Outfitter and, which are operating divisions of PetsUnited. The acquisition was subject to finalization of a definitive agreement, due diligence review, and other customary conditions. After completing its due diligence, DOGN management determined that the acquisition did not fit within the financial parameters required to increase stockholder value.  Dogs International’s focus has been on building/acquiring a chain of upscale pet care facilities under the name “Bed & Biscuit Inn.” (Business Wire)  
> Aspenbio announced that it has entered into an exclusive license agreement with Washington State University for a portfolio of patents and patents pending.  Aspenbio believes that the license represents the premiere reproduction patent portfolio in animal health, and that the technologies can potentially be applied to reproduction in all mammals.  Financial terms were not disclosed. (Animal Pharm)   
>  FRANCE   The French government has suspended the marketing authorization for Elanco’s Micotil (tilmicosin) antibiotic for cattle and sheep following two human deaths in the US that were possibly linked to accidental injection with Micotil.  The commission also instigated a product recall of Micotil products, which is being managed by Elanco.  The US’ FDA reported that it will not take any action as a result of the deaths until investigators are certain the deaths were caused by Micotil.  The French authorities, however, ruled that the product should stay off the market pending results of a report by the French national veterinary pharmacovigilance commission.  Elanco stated that it is working with French authorities to develop acceptable safety warnings for the product, and has been educating people about the drug’s safe use for fourteen years.  (Animal Pharm)  
>  DENMARK – BSE   A cow from central Jutland in Denmark tested positive for BSE as part of routine surveillance.  This is the 13th case of BSE diagnosed in Denmark, and the first in 2004. The animal was believed to be born in 1990.  Investigations into the feeding routines in the affected cow’s herd will be carried out in an attempt to locate the possible source of the infection.  (AnimalNet)
>  EU – BSE REGULATIONS   The European Commission issued a proposal revising its BSE eradication rules. Under the current law, EC member states must slaughter and destroy all bovine animals on the same holding as an animal having died of BSE, as well as any recent calves. In addition, all animals of the “cohort” (animals of the same age born or reared in the same herd as the BSE case, having received the same potentially infected feed when they were calves) have to be destroyed.  According to the proposed revision, only the animals of the cohort will have to be destroyed and the definition of the cohort is revised to make it clear that the rules apply to animals of both the “birth” and “rearing” cohort. The European Commission admitted that most member states are already using a derogation to limit culling to the cohort rather than destroying the whole herd. (Wattnet Meatnews)
>  US – COOL   Arguing that mandatory country of origin labeling (COOL) is too costly for agriculture producers, the House Agriculture Committee  introduced a voluntary COOL bill. The bill, introduced as the Food Promotion Act of 2004, would amend the Agricultural Marketing Act of 1946 to establish a voluntary COOL labeling program for produce, meat and seafood and abolish the mandatory COOL provision from the 2002 Farm Bill.  The congressmen who introduced the bill emphasized that COOL is a marketing tool rather than a food safety program, and cautioned that groups pushing for mandatory COOL don’t understand the global ramifications. (Meating Place)
>   US – ANIMAL ID   The USDA announced it is holding a series of listening sessions across the country to discuss development, structure, and implementation of a national animal identification program for all livestock and poultry animals.  The first listening session was held in Fayetteville, NC on June 14.  Additional sessions will be held in Athens, GA; Prineville, OR; Stockton, CA; Socorro, NM; Pasco, WA; Greeley, CO; Billings, MT; Kissimmee, FL; Columbus, OH; Ames, IA; Joplin, MO; Appleton, WI; and St. Cloud, MN.  More details about each session will be posted on the APHIS website at .   (AnimalNet)
>  US – ANIMAL ID FUNDING   The USDA’s Animal Plant Health Inspection Service (APHIS) announced it is seeking approximately 20 cooperative agreements with state and tribal governments to support initial development of a National Animal Identification System (NAIS).  APHIS said it will award up to $11.64 million for these cooperative agreements, part of the $18 million allocated for the NAIS.  The agreements will focus mainly on developing premises identification system, a priority according to APHIS.  (AnimalNet – NCBA press release) 
>  AUSTRALIA – CATTLE GENETICS   Australia’s leading science body, the Commonwealth Scientific and Industrial Research Organization, reported it has discovered a gene that signals marbling in beef. The marker gene, once commercialized, would be able to help cattle producers more accurately predict the genetic potential of their animals to produce better tasting and more valuable beef, according to the report. The researchers said they were also looking to identify gene markers for parasite resistance and net feed efficiency. (Meating Place)
>  US – FOOD ANIMAL VETERINARIANS   Researchers at Kansas State University’s College of Business Administration will assist a newly formed coalition of food supply veterinary interest groups in determining methods to ensure adequate veterinary involvement in the production of a continuing abundant supply of safe and wholesome food.  The study is titled “Estimating Food Supply Veterinary Medicine Demand and Maintaining the Availability of Veterinarians in Careers in Food Supply-Related Disciplines in the US and Canada.”  The study was commissioned by the Food Supply Veterinary Medicine Coalition, whose members include the AVMA and other veterinary associations, and Bayer Animal Health.  The study is expected to be completed by mid 2005. (AnimalNet – Yahoo News)   
>  US – SWINE ODOR LAWSUIT   The owner of four 5,000-
pig farms in Nebraska must pay damages to 11 neighbors who said the stench forced them indoors, as ordered by a state Court of Appeals. A trial court will determine the amount owed to the residents, who live within two miles of farms owned by Progressive Swine Technologies. The decision reversed a 2002 ruling that Progressive Swine did not owe damages, even though its four pig farms were a nuisance. As part of that ruling, the farms were told to reduce the smell. The landowners’ attorney said that has not been done. The attorney plans to file a motion to enforce that judgment or find the hog farm operators in contempt. (Wattnet Meatnews)
>  US – DAIRY POLLUTION REGULATIONS   Air quality regulators are proposing what they say would be the first attempt in the country to regulate smog-forming emissions from cow manure. Cows in Southern California dairies, especially around the farm community of Chino, produce 1 million tons of manure every year, according to the South Coast Air Quality Management District, which is proposing the new rules. As it decomposes, the manure releases more than 20 tons of pollutants daily, mainly ammonia, and combines with pollution blown downwind from Los Angeles and Orange counties, aggravating Southern California’s smog problem.  The proposed rule would require dairies to clear manure from corrals four times a year starting in 2005, instead of the two times a year currently required. By 2006, they would be required to use environmentally friendly means, such as a digester, to eliminate any waste that doesn’t become fertilizer. The district’s governing board plans to vote on the proposal after a public hearing on Aug. 6. (AP)

I’ve just completed 22 days in the heartland of America visiting producers, distributors and manufacturers of animal health products.  The input and observations from those I encountered are very optimistic for 2004.  With beef and pork selling at record levels and a strong economy, it appears we’re off to almost a record year for revenue increases.
We see lots of opportunities developing in the food safety, traceability, and animal identification areas.  Those companies that have the technology to provide solutions, and the financing to support commercialization, will be big winners in this area.
Earlier in this newsletter, we announced our 2004 Sales Force Effectiveness Study.  The first Sales Force Effectiveness Study in 2002 had major implications for how the leading companies have recruited and trained their sales forces in the past two years.  The 2004 study is designed to determine whether the investment and changes made by companies has been effective.
Have a great weekend.
Ron Brakke

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