Animal Health News & Notes for August 22, 2003

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Brakke Consulting’s
Animal Health News & Notes for August 22, 2003
Copyright © Brakke Consulting, Inc.
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NEW IN THE NEWSLETTER:
You can now use this section to jump directly to a news item about a particular company.  Simply click on the company name. To return to the top of the newsletter, use the scroll button on the right of your email window.
 
JUMP TO:
 
BC Natural Foods
Breeder’s Choice
Central Garden & Pet
Ceva Sante Animale
Delmarva Labs
IDEXX
Lallemand Animal Nutrition
Nestle (earnings)
Nestle Purina PetCare
Novartis Animal Vaccines
Penn Valley Farms
Pennfield Farms
PETCO Animal Supplies (earnings)
Pro Brands Ltd.
Smithfield Foods (earnings)
VCA Antech
Virbac Corp.
Webster Veterinary Supply (earnings)
 
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COMPANY EARNINGS RELEASES
 
>  Nestle reported that sales for the first half of 2003 for its Petcare division were 4,674 million CHF ($3.5 billion), down 13.5% compared to the first half of 2002.  The company noted that the strength of the Swiss franc against other currencies had a significant unfavorable impact on results (12.6% on total company sales).  Organic growth for the Petcare division was flat compared to the first half of 2002, and EBITA margins increased from 12.2% to 13.7%. (company website)
 
>  PETCO Animal Supplies, Inc. reported financial results for the second quarter ended August 2, 2003.  Net sales in the second quarter of 2003 were $398 million with a comparable store net sales increase of 6.1%. Overall, net sales increased 12.4% over the second quarter of 2002. Net earnings for the second quarter were $13.5 million, compared with net earnings of $9.9 million in the prior year second quarter.  Net sales in the first half of 2003 were $783 million with a comparable store net sales increase of 5.3%. Net earnings for the first half of 2003 were $24.6 million, compared with a net loss available to common stockholders of $19.8 million in the prior year period. PETCO opened 19 new stores during the second quarter of 2003. The Company has now opened 41 new stores in 2003 and, net of relocations and closings, the addition of 36 new stores has increased its store base to 636 locations. (company website)
 
>  Patterson Dental announced results for the first quarter of fiscal 2004 ended July 26.  Sales of the Webster Veterinary Supply unit increased 31% in this year’s first quarter to $61.5 million. Excluding a significant pharmaceutical distribution agreement, Webster’s comparable sales growth was approximately 8% for this period, consistent with internal expectations. Webster is also currently in the process of opening new sales territories in the states of Washington and Ohio.  (Business Wire)
 
>  Smithfield Foods Inc.’s announced that its first-quarter earnings increased by 87% over the same period last year. Earnings for the first quarter of fiscal 2004 were $22.1 million, compared with $11.8 million a year earlier. Sales were $2.2 billion, up from $2.0 billion for the same period a year ago. The improved results were the result of a 22% increase in domestic average live hog market prices. (AP)
 
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2004 U.S. Animal Health
Manufacturers & Distributors Directory
 
September 19th Deadline for Submitting Free Listing
 
Each January, Brakke Consulting publishes the US Animal Health Manufacturers and Distributors Directories. In 2004 they will be combined into a single volume for the first time.
 
Companies listed in the 2003 directories will soon be receiving a copy of the information we currently have in our directory database for their company. Please update the information and return it by fax to 972-243-0925 or by mail to the Dallas office no later than Friday, September 19th. There is no charge to be listed.  Companies that were listed in last year’s directories may also go to our web site and use the online Directory Listing Form if they have a substantial number of changes in their listing information.
 
If your company was not in the 2003 directories, you may submit information about your firm to be included in the 2004 directory by going to www.brakkeconsulting.com and clicking on Industry Directory, and then Directory Listing Form.  You can either complete the form online and submit it, or
print the 2-page form, complete it, and return it by fax or by mail to the Dallas office.
 
If you are interested in placing an order for the directory, go to www.brakkeconsulting.com, click on Industry Directory, and then Order Directory.  Before December 15th, the prepublication price will be $200. After December 15th, the cost of the directory will be $250. They will be shipped around mid-January, 2004.
 
If you have any questions, please call our office at 972-243-4033 and ask for Jane Morgan or Roger Cummings, or you can send an email to info@brakkeconsulting.com. 
 
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COMPANY NEWS RELEASES
 
>  Virbac Corporation announced that it has acquired the stock of Delmarva Laboratories. The all-cash transaction, which closed August 15, is expected to be immediately accretive and non-dilutive to shareholders.  Delmarva achieved 2002 sales of $3.8 million led by Euthasol and Pentasol, both of which are humane, painless, and rapid euthanasia products, and Biomox amoxicillin. Included in the 2002 results were $0.4 million of sales in an equipment line that was divested prior to Virbac’s purchase. The transaction also includes the recently FDA registered, but not yet launched, clindamycin product line. (Business Wire)
 
>  The USDA recently announced that it has issued a conditional license to Novartis Animal Vaccines, Inc. for an equine-origin antibody product intended to aid in the treatment of disease in horses caused by West Nile virus. Under these regulations, a product that is shown to be pure and safe and demonstrates a reasonable expectation of efficacy may be conditionally licensed while data to establish efficacy and potency are still being obtained. (AAEP News Center – USDA)
 
>  IDEXX introduced the IDEXX-CR System, a computed radiography system customized specifically for companion animal veterinary medicine.  The system is used with the clinic’s existing X-ray machine and uses a plate reader to generate a digital image that can be enhanced via IDEXX-PACS picture archiving and communication system software.  The X-ray image is generated without the inconvenience and environmental consequences of film or a processor.  (DVM Newsmagazine)
 
>  Nestle Purina Petcare, Wal-Mart stores and American Humane Association have banded together to make pet adoption easy by creating The Very Best Pet Network.  Nearly 2,100 Wal-Mart stores across the country have a Very Best Pet Network adoption board in the pet department, featuring photos of local pets available for adoption.  (PRNewswire)
 
>  Significant challenges to livestock producers have emerged with issues such as increasingly narrow margins, increased regulation of production methods, food safety and environmental concerns all leaping to the forefront as livestock producers struggle to be profitable.  Several of these issues were addressed recently at the Lallemand Animal Nutrition Ruminant Conference in Montreal, Quebec, July 9, 10 and 11.  Participants from around the world reviewed current concepts in the use of microbial products enhancing animal production.  (company press release)
 
>  VCA Antech, Inc. announced that it refinanced its senior credit facility.  Of the $166.4 million principal balance outstanding under its Senior Term C Notes, $146.4 million was retired with new Senior Term D Notes, with a 50 basis point reduction in the interest rate.  The Company voluntarily repaid the remaining $20.0 million of the Senior Term C Notes with cash on-hand. (company press release)
 
>  Central Garden & Pet Company announced that it has received the “Strategic Alliance Vendor of the Year” award for 2003 from PETCO Animal Supplies, Inc. at the Annual PETCO Store Managers and Vendors Meeting. This award recognizes excellence in meeting customer needs, partnering on new product development, supply chain logistics, and contributing to the overall success of PETCO. In addition, Glen Axelrod, President of Central’s TFH/Nylabone subsidiary, received a special recognition award from PETCO for his innovation and entrepreneurial spirit by inventing and patenting over 50 new pet supply products. (Business Wire)
 
>  Breeder’s Choice launched its “Caring for Both Ends of the Leash” program to screen and recruit new therapy dogs to serve as therapy pet volunteers for hospital patients, and raise awareness of the value of human-pet relationships.  As part of its initiative, Breeder’s Choice is partnering with the Susan G. Komen Breast Cancer Foundation.  Breeder’s Choice is hosting events at designated pet retail stores in four cities offering local dog owners a free therapy dog review and aptitude test.  Coordinating with Delta Society, a national volunteer-based organization dedicated to improving human health through service and therapy animals, each event will have professionally registered evaluators on-site to test local community dogs.  (PRNewswire)
 
>  A new animal health company has been established that will offer medical products and services for veterinarians to recommend to clients and to treat clients’ animals.  Pro Brands Ltd. is headquartered in North Platte, Nebraska and will offer products that are manufactured specifically for the veterinarian’s use, and will be available exclusively from practicing veterinarians.  The company will sell established products for horses, companion and food animals, as well as selling its own line of products under the Veterinarian’s Rx brand.  (Feedstuffs)
 
>  BC Natural Foods has acquired Penn Valley Farms, national producer of the popular Hans’ All Natural product line. BC also stated it completed its previously announced purchase of Pennfield Farms all natural premium chicken. BC Natural Foods owns interests in Petaluma Poultry, B3R Country Meats, Coleman Natural Products and Gerhard’s Napa Valley Sausage. Financial terms were not disclosed.  (Meating Place)
 
>  UK   Ceva Sante Animale announced that Anipryl (selegiline) has received  authorization from UK veterinary Medicines Directorate (VMD) to be marketed in the UK for the treatment of cognitive dysfunction syndrome in aged dogs and the treatment of canine Cushing’s disease. On the basis of this authorization, Ceva will proceed to file for regulatory approval of Anipryl in four additional EU member states. (company press release)
 
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NOW AVAILABLE!

VETERINARY DRUG COMPOUNDING STUDY
 
In the past year or two, the exhibit halls at veterinary conferences have seen a proliferation of veterinary compounding pharmacies.  In response to frequent questions about this topic, Brakke Consulting will be conducting a study of the phenomenon of veterinary compounding.  The study will answer questions such as
 
– what do veterinary compounders offer?
– what types of companies are offering compounding services?
– how many and how big are they?
– how frequently are veterinarians using compounding services?
– are there differences in veterinary usage between equine and small animal practitioners?
– are veterinary compounders taking business away from traditional pharmaceutical manufacturers?
 
The study is available at a price of $3,250 and will begin shipping Monday, July 28.  For more information, please call 972-243-4033 or email info@brakkeconsulting.com .
 
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ANIMAL HEALTH NEWS
 
>  The Animal Health Institute (AHI) is holding a meeting on the Animal Drug User Fee Act (ADUFA) currently pending before Congress. The meeting is open to the public. The Center for Veterinary Medicine (CVM) is participating in the presentations at the AHI meeting. The agenda for the meeting is to discuss the history and background of ADUFA, how CVM contemplates implementing the Act if it passes, and the regulated industry’s role in the new process. The meeting will be held on Tuesday, September 16, 2003, from 8:00 a.m. to 4:30 p.m. at the Radisson Hotel Old Towne Alexandria, Alexandria, VA. To register call the Animal Health Institute at: 202-637-2440. (AnimalNet – FDA)
 
>   The Coalition for Animal Health, representing the Animal Health Institute, National Cattleman’s Beef Assn., National Chicken Council, National Pork Board and National Turkey Federation, was quick to question the WHO recommendation that the use of antibiotics in animals for growth promotion be discontinued, and to point out that growth-promoting antibiotics are important animal health products that have been approved by the FDA and regulatory agencies in many other countries. “These are products that have a decades-long track record of safety and efficacy,” the coalition said. (AnimalNet – NPPC)
 
>  US   West Nile virus has been detected for the first time inside the state of Arizona, one of the last states in the nation to be hit. Found in mosquitoes in the far southeastern part of the state, the virus is now expected to move throughout Arizona. There have been no reports of the virus in (humans or other vertebrates) in Arizona, but state health officials predict it will hit horses and several humans within the next 3 months. (AAEP News Bulletin – Arizona Daily Star)
 
>  US   Quarantines at two farms in Pennsylvania have been lifted after investigators found no signs of foot-and-mouth or other serious infectious diseases in sick sheep and goats. The animals have a low-level contagious disease and the department urged owners to seek a veterinarian’s care. The sheep and goats likely have contagious ecthyma, a condition in which animals get sores in their mouths that spread when they lick themselves. (AP)
 
>  US   The National Pork Producers Council has established an environment committee, involving 15 producers from across the nation. The committee will focus on providing strategic counsel and recommend actions to the NPPC’s Board of Directors on environmental and conservation policy, advanced technology and stewardship projects.  Members identified a list of target activities and made assignments to several NPPC subcommittees. (Pork Alert)
 
>  US   The USDA undersecretary for food safety announced the USDA’s New Technology Office, which will be based within the Food Safety & Inspection Service. The New Technology Office was created to streamline the implementation of new technologies in meat- and poultry-processing plants, and reduce the amount of time it takes the FSIS to review such technologies. (Pork Alert)
 
>  US   Researchers working in neurobiology and behavioral observation seem to be learning what pet lovers have maintained all along: animals have feelings. New evidence gathered from actually studying dogs, chimps and other animals, supports pet owners’ firm convictions that animals experience fear, jealousy, grief and love. A biologist at the University of Texas reported that dogs have proven to be quite emotionally complex. He said there are four dimensions of canine personality: sociability, affection, emotional stability and competence, a word used to represent obedience and intelligence combined. These dimensions are “remarkably similar to the four basic categories of human personality found in standard psychological tests,” according to the researcher. (Animal News Center)
 
>  US  Research scientists at North Carolina State University are investigating the occurrence of three common disease organisms in pigs from farm to slaughter. They want to determine whether different pork production or handling methods yield different amounts or kinds of foodborne bacterial organisms. The research will provide information about whether pork produced under different labels, such as organic or antibiotic-free, yields any differences in food safety risks. (Pork Alert)
 
>  CANADA   Genome Prairie, a not-for-profit scientific corporation, will help lead the Canadian portion of a $51-million US/international effort to publish the sequence of the cow genome, set to start next month. Genome Prairie will join its sister organization, Genome British Columbia, in the push to decode bovine DNA of cows as part of the U.S.-led Bovine Genome Project. Knowing the genetic code of cows will help ranchers breed cattle to be resistant to diseases such as bovine spongiform encephalopathy, to have tastier, leaner beef and to produce more milk.  The Americans have requested that half the $51 million come from other nations, and the effort won’t get under way until that funding is secured. The Canadian contribution will be $5 million US. (AnimalNet – Calgary Herald)
 
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BRAKKE CONSULTING VIEWPOINT
 
Every once in a while it is good to question your assumptions.  That appears to be the reasoning behind the NC State investigation into hog handling practices.  The old standby, “that’s the way we’ve always done it” was never a good reason and is even worse in today’s climate. 
 
The good news this week is that research continues in many sectors of animal health.  Despite thin margins and uncertainty in the general economy, the quest for knowledge continues. 
 
We at Brakke Consulting are happy to be part of your personal quest by bringing you this newsletter for the past four years.  We are all indebted to Dr. Lynn Fondon for her editing.  I understand that she will be accepting free drinks at the upcoming CVC to celebrate. 
 
John Mannhaupt

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