The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for July 3, 2003

Copyright © Brakke Consulting, Inc.

>  Dainippon Pharmaceuticals announced that sales of its animal science division for the fiscal year ended March 31, 2003 increased by 8.8% to Yen 26.815 billion ($ 223.5 million) compared with the previous year. This increase is mainly due to the acquisition of the animal health business of Tanabe Seiyaku in November 2002. (company press release)
>  Novozymes reported that its feed enzymes sales in the first quarter of 2003 grew 33% to DKK 165 million ($25.6 million).  The company’s alliance with Roche Vitamins is expected continue following the latter’s sale to DSM.  (Animal Pharm)
Communication Challenges
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>  Merial announced that the EPA has approved several new label claims for all Frontline brand products.  The new claims include use in breeding, pregnant and lactating animals; treatment and control of chewing lice; control of sarcoptic mange in dogs; use in younger animals for Frontline Top Spot; and use in dogs and puppies up to 22 pounds for Frontline Plus.  (Veterinary Practice News)
>  Vetoquinol USA began marketing Propalin (phenylpropanolamine) in the US for treating urinary incontinence in dogs.  Parent Vetoquinol already markets Propalin in the United Kingdom.  Propalin is available as either a syrup or a chewable tablet. (Veterinary Practice News)
>  IDEXX announced that it expects its diclofenac anti-inflammatory drug to be approved in 2004, pending comments from the FDA.  The FDA will likely address labeling, finished product testing and facility inspections.  IDEXX is seeking approval of diclofenac as a nonsteroidal anti-inflammatory product for treating equine lameness. (Veterinary Practice News)
>  Abaxis announced a new distribution agreement with Milburn Distributors.  Milburn has a customer base of more than 5,000 equine veterinarians, and will be the exclusive distributor of Abaxis’ line of equine products. (Veterinary Practice News)
>  Embrex, Inc. announced it has settled its breach of contract litigation against Wyeth, Wyeth division Fort Dodge Animal Health, and related parties. Under the settlement terms, Embrex and Fort Dodge dismiss all claims currently pending between them in return for payment to Embrex by Fort Dodge of $5.0 million.  The settlement stems from a complaint filed by Embrex in April 2002 against Fort Dodge and Wyeth, alleging breach of contractual obligations to develop, manufacture, register and market Bursamune in ovo bursal disease vaccine in the territories of Europe, the Middle East and Africa, unfair and deceptive trade practices and related claims. (company website)
>  Degussa announced that it will purchase all of Cargill’s share in their 50/50 joint venture, Midwest Lysine LLC.  Midwest Lysine was founded in 1998 to produce Biolys (L-lysine).  Degussa has been the marketing partner for Midwest Lysine, and will continue to carry out all sales and marketing activities.  Financial terms were not disclosed.  (Feedstuffs)
>  The PETsMART, Inc. Board of Directors has initiated a quarterly cash dividend of $0.02 per share. The first such dividend will be payable by November 21, 2003, to shareholders of record on October 31, 2003. The company currently intends to pay regular quarterly dividends going forward. (Business Wire)
>  Dechra Pharmaceuticals announced the signing of a sub-license agreement with Bioenvision for the intellectual property to the chemical compound trilostane.  Trilostane is the active ingredient in Vetoryl, developed and marketed in the UK by Dechra’s subsidiary Arnold’s Veterinary Products to treat Cushing’s syndrome.  The agreement gives Dechra exclusive rights to the intellectual property for animal health applications, including in the US and Canada.  A $1.25 million initial payment was made to Bioenvision, with another $750,000 due upon completion of the submission of its NADA, and a further $3 million due once marketing authorization is granted by the FDA.  Bioenvision will also receive royalty payments once product sales commence.  (Animal Pharm)
>  Alltech has established its first base of operations in California. Alltech also has regional offices in the Midwest, Northeast and South. Alltech has had a presence in California for almost two decades, and has worked with universities and researchers in the state. (company press release)
>  AVANT Immunotherapeutics, Inc. announced it has entered into a definitive agreement with an institutional investor in a private placement for gross proceeds of $10 million. AVANT has agreed to issue 4,444,444 shares of its common stock at $2.25 per share and warrants to purchase 444,444 shares of common stock at a price of $3.00 per share. (Business Wire)
>  The California Veterinary Medical Association announced that VetCentric has received its recommendation.  The CVMA has reviewed VetCentric’s business model and determined that they are a company that will benefit the veterinary profession.  The CVMA serves over 4,800 veterinary professionals. (association press release)
>  ViaGen Inc. has purchased livestock breeder ProLinia Inc., a pioneer in US livestock cloning services. Detailed terms of the deal were not disclosed, but it reportedly includes ProLinia’s development contract with Smithfield Foods and the company’s scientific talent and intellectual property in the area of advanced reproductive technology. ProLinia is best known in the livestock industry for using cloning services to achieve new levels of animal quality and efficiency in swine and cattle breeding operations. (Meating Place)
>  VetInsite announced that its Pet Portal/Vet Portal products now interface with IntraVet, Impromed, Clientrax, Idexx Better Choice, and Cornerstone veterinary practice management software.  Pet Portals provide a mechanism for clients to securely view their own pet’s health information and to interact with their veterinarian online. (company press release)
>  FRANCE   Medical International Technology announced that it has reached an agreement with Schering-Plough Veterinarinaire for the marketing and distribution of the company’s needle-free injectors for animals in France.  SPV has been granted exclusive rights to market MIT’s Agro-Jet needle-free injectors under its own private label until December 2003.  At the conclusion of the trial, SPV will have the option to enter a longer-term agreement.  Financial terms were not disclosed.  (Animal Pharm)
>  NEW ZEALAND   Peptech Animal Health announced that it has received marketing authorization for its canine contraceptive, Suprelorin, in New Zealand and expects to receive similar approval in Australia shortly.  Suprelorin is an implant containing a GNRH agonist, and prevents conception for six months at a time.  The company is working toward a similar product effective for 12 months.  (Animal Pharm)
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 will be completed in July 2003, and is available at a price of $3,250.  For more information, please call 972-243-4033 or email .
>  EU   The European Parliament gave final approval to legislation introducing the tougher labeling of new genetically altered food products. The labels will enable consumers to tell whether products contain biotech ingredients, and allow the EU to do away with its five-year freeze on the introduction of new biotech products. The 15 EU governments are expected to endorse the new rules in July so they can take effect by the end of the year.  US officials have said the mandatory labeling of biotech products will be too expensive for exporters and that the new system would also constitute an unfair trade barrier. (AP)
>  US   The Centers for Disease Control and Prevention has recommended that any pets feared infected with monkeypox should be destroyed, and other animals, including cats and dogs, that may have been exposed to the disease should be quarantined for up to six weeks. The announcement represents a stepping-up of its efforts to control the outbreak.  There have been no confirmed US cases of monkeypox in cats and dogs, but pets could get the virus from close contact with an infected animal and spread it to humans. (AP)
>  US  The US Senate approved the Animal Drug User Fee Act of 2003 in May, moving the legislation to the House of Representatives.  The act would allow the FDA to collect user fees from veterinary drug sponsors to help fund its review of veterinary drugs. (Veterinary Practice News)
>  US   Fears of avian influenza have prompted Connecticut health officials to ban chickens from state fairs this summer. Connecticut’s State Department of Agriculture said that the poultry ban at state fairs was ordered as a precautionary measure.  Three million chickens were sickened in late February during an outbreak of the disease.(Meating Place)
>  AUSTRALIA   The Australian Government has agreed to provide up to $1.6 million to secure commercial supplies of foot and mouth (FMD) disease vaccine for possible use during a livestock emergency.  Australia currently relies on FMD vaccine sourced from the International Vaccine Bank, but the bank will soon be closed. The Commonwealth’s will fund 40% of the cost of the program, with the States and Territories needing to match this amount, and the remaining 20% coming from those livestock industries most at risk from FMD.  (Wattnet Meatnews)
>  US   The United States Pharmacopeia’s (USP) Veterinary Practitioners’ Reporting Program was terminated as of April 30, 2003.  Parties wanting to submit adverse reactions for animal healthcare products must now contact the manufacturer of the product and the appropriate US government authority (the FDA’s Center for Veterinary Medicine or the USDA’s Center for Biologics). (Veterinary Practice News)
>  US   Stampede Meat based in Chicago, Illinois, has recalled about 739,000 pounds of frozen beef products, mostly vacuum packaged steaks, because they may be contaminated with E. coli O157:H7. (Wattnet Meatnews)
>  US   The USDA’s Food Safety and Inspection Service has increased the fees it charges poultry and meat establishments, importers and exporters for providing voluntary inspection services, overtime and holiday inspection services, identification services, certification services and laboratory services.  The fee increases are retroactive to Dec. 30, 2002. (Meating Place)
>  US   The National Pork Board is eliminating 18 staff positions in response to a prolonged slump in hog prices that has reduced revenues from the pork checkoff. The layoffs, from a staff of 96, are effective July 15. The reduction in market prices paid to hog farmers, coupled with a 5-cent reduction in the Pork Checkoff rate approved in 2002, has resulted in a 17.5% reduction in the National Pork Board’s budget in just two years. (Meating Place)
How time flies when you’re having fun!  It is hard to believe that the first six months of 2003 is in the books.  We hope all of you have achieved your objectives for the first half of the year. 
On my recent trips to the northeast and Midwest, I found most of the companies I visited had positive views on the first two quarters of 2003.  We look forward to seeing the upcoming quarterly earnings releases.
We wish all of you in the US an enjoyable 4th of July break. Stay cool and safe, and take a few minutes to reflect on the blessings of the nation we call home. 
Have a great weekend.

Ron Brakke

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