The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for October 25, 2002

Copyright © Brakke Consulting, Inc.

>  Akzo Nobel reported that third quarter 2002 sales for its animal health division Intervet were under pressure from weak currencies and soft market conditions, particularly in Latin America.  Sales were 264 million euros ($260 million), a decrease of 4% from the third quarter 2001.  Sales for the first nine months were 817 million euros ($800 million), essentially flat compared to the first nine months of 2001. (company website)

>  Wyeth reported that third quarter 2002 sales for its animal health division Fort Dodge decreased 37% to $128 million, primarily due to lower sales and higher than projected returns of ProHeart 6 offset, in part, by higher sales of the company’s West Nile virus vaccine for horses.  Sales for the first nine months decreased 14% to $484 million. (company website)

>  Eli Lilly reported that third quarter 2002 sales for its animal health division Elanco decreased 6% to $168 million compared to the third quarter of 2001.  (company website)

>  Schering Plough reported that third quarter 2002 sales of its animal health division decreased 4% to $162 million, due to market conditions for swine products in the US coupled with weakness in certain international markets.  For the first nine months, sales decreased 2% to $483 million.  (company website)

>  Pharmacia reported that sales for the third quarter 2002 in its animal health division grew 10% compared to the third quarter 2001, to $131 million.  For the first nine months of 2002, sales grew 8% to $372 million. (company website)

>  IDEXX Laboratories, Inc. reported that net income increased 22% to $12.5 million for the quarter ended September 30, 2002, compared to net income of $10.2 million for the same period in the prior year.  Revenue for the third quarter of 2002 increased 7% to $104.5 million from $97.5 million for the third quarter of 2001.  The Companion Animal Group revenue for the third quarter of 2002 increased 7% to $82.2 million for the third quarter of 2001. This increase resulted primarily from a 13% increase in sales of laboratory services and a 10% increase in sales of rapid assays, which consist of tests for canine and feline infectious and parasitic diseases. (Business Wire) 
>  VCA Antech, Inc. reported financial results for the third quarter and the nine months ended September 30, 2002.
Revenue for the quarter increased 12.0% to a record $115 million from revenue of $103 million in the same quarter last year.  Operating income increased to $26.1 million from $16.0 million for the comparable period in 2001.  Revenue for the nine months ended September 30, 2002, increased 10.3% to a record $337 million. (company press release)

>  ImmuCell Corporation announced a return to profitability and the results of its operations for the three and nine month periods ended September 30, 2002. During the three month period ended September 30, 2002, product sales increased by 3% to $1.3 million.  Net profit of $30,000 compares to a net loss of $57,000 for the three month period ended September 30, 2001.  During the nine month period ended September 30, 2002, product sales decreased by less than 1%, $4.5 million. (Business Wire)

>  AVANT Immunotherapeutics, Inc. reported financial results for the third quarter ended September 30, 2002. The company reported a net loss of $276,200 for the third quarter of 2002 compared to a net loss of $6.2 million for the third quarter of 2001. The decreased loss for the third quarter of 2002 primarily reflects a significant increase in revenue and a decrease in operating expense compared to the same period in 2001, offset in part by a decrease in investment income. (Business Wire)

>  Land O’Lakes, Inc. reported a $12 million net loss for the third quarter that ended Sept. 30, 2002.  Sales for the quarter were $1.4 billion, down 4% from the third quarter of 2001.  Year-to-date, the company is reporting sales of $4.3 billion, up 3% over one year ago, and $35.3 million in net earnings, down from $52.8 million for the first three quarters of 2001.  Company officials indicated that factors such as commodity price declines in the dairy, feed, egg, and swine industries, ongoing competitive pressures on Upper Midwest dairy manufacturing operations, and costs related to the start-up of the Cheese & Protein International (CPI) joint venture contributed to the 2002 earnings decline. (PRNewswire)

>  Maple Leaf Foods Inc. reported its financial results for the third quarter ended September 30, 2002.  Sales for the third quarter increased 6% to $ 1.27 billion from the same period last year, driven both by the acquisition of bakery businesses and internal growth. Net earnings for the third quarter increased to $19.3 million compared to $10.2 million in 2001. (Business Wire)


>  Merial Select and Animal Science Products Inc. signed a Sales Representative Agreement for marketing Spray-Vac Stabilizer in the US.  Spray-Vac Stabilizer is designed for use with spray vaccination in poultry houses. Spray-Vac Stabilizer eliminates the need for using distilled water when vaccinating. It allows poultry producers to simply add Spray-Vac Stabilizer to ordinary tap water for full protection of the vaccine from harmful compounds that may be found in the water. (company press release)

>  Nestle Purina PetCare announced that it has received a US patent for its hypoallergenic pet food.  The formula combines modified, denatured proteins with starch in a non-liquid nutritionally complete and balanced formula for dogs with food allergies.  Prior diets marketed for dogs with allergies used novel proteins, not modified proteins.  While the patented formula is available in HA HypoAllergenic Formula, it actually covers any protein source and starch source combined in this way to create a complete, balanced, dry hypoallergenic pet food. (company press release)

>  AVANT Immunotherapeutics, Inc. announced that the company has agreed in principle to acquire the technology and intellectual property portfolio of Universal Preservation Technologies, Inc. (UPT), and to license certain patent rights from Elan Drug Delivery Limited (a subsidiary of Elan Corporation plc). Through this transaction, AVANT will gain exclusive rights to UPT’s VitriLife process for use in AVANT’s oral vaccines and certain other non-injectable applications. VitriLife is a patented drying method for the industrial-scale preservation of biological solutions and suspensions, such as proteins, enzymes, viruses, bacteria and other cells, for shipping and storage at or above room temperature. AVANT plans to complete its acquisition of the UPT technology, patents and license agreements by year-end. Financial details of the transaction were not disclosed. The planned acquisition of UPT’s assets includes only technology and patents; AVANT will not acquire UPT’s San Diego facility or employees in this transaction. (Business Wire)

>  The Meow Mix Company announced the purchase of a 200,000 sf petfood manufacturing facility in Decatur, Alabama.  The new acquisition will allow the Meow Mix Products to be manufactured in, and distributed from, a dedicated Meow Mix plant.  The company says that the new plant will be the only petfood plant in the US that is 100% dedicated to making dry cat food. (Petfood Industry)

>  Sensortec Ltd and Tridelta plc announced an agreement to further develop and market Milk Amyloid A (MAA) detection technologies. The focus of this agreement is to develop a series of sensors for use in the detection and monitoring of mastitis, by combining Sensortec’s expertise in sensor development with Tridelta`s recently discovered and patented MAA technology for mastitis detection. MAA is a newly discovered protein released by cows in response to infection of the udder.  MAA is one of the earliest indicators of mastitis.  (company press release)

>  VCA Antech, Inc. announced that it repaid $30 million of its 15.5% senior notes and retired all $15 million of its outstanding 13.5% senior subordinated notes.  Funds used to repay the debt and pay the prepayment premium and transaction costs were derived from an additional $25 million of Term Loan C notes issued under the Company’s senior credit facility and $25.2 million of cash on hand.  (company press release)


Animal Health and Nutrition Industry Overview
to be presented in New York City December 2, 2002

At the request of several clients. Brakke Consulting has decided to kick off the annual 2003 Animal Health and Nutrition session early by holding a three-hour industry seminar and information program at the Princeton Club in New York City from 2:00 – 5:00 pm on December 2.

The presentation will include information including sales estimates for 2002 and the 2003 outlook for leading companies and products.  It will also cover US and international trends for:
– nutritional and medicinal feed additives
– flea, tick and heartworm products
– the evolving pain management market
– pet nutrition
– food safety and animal welfare and its impact on industry

There will be a fee of $300 per attendee, with discounts for multiple registrations from one company.  Attendees will be provided with an outline of the presentation at the time of the overview. 

Attendance is limited to the first 30 registrations, so sign up now!

For registration information, please visit our website at and click on the registration link, or call 972-243-4033.


>  US   According to state officials, Four dogs in Louisiana with encephalitis-symptoms had the West Nile virus. Three of the dogs died. They had symptoms that included seizures, trouble walking, stargazing, and flinching at a gentle touch.  The virus may not have caused the disease, but veterinarians should consider West Nile as a possible cause of brain or central nervous system trouble in dogs. (AP)

>  ITALY   By manipulating swine sperm, researchers have made a strain of pigs that carry human genes in their hearts, livers and kidneys, an advance that could lead to creating herds of pigs that could provide organs for transplanting into humans.  In a study appearing in the Proceedings of the National Academy of Sciences, researchers at the University of Milan report they mixed swine sperm with human DNA to transfer a gene called decay accelerating factor, or DAF. The modified sperm was then used to fertilize pig eggs and produce litters of pigs carrying the human gene. (AP)


On December 12-13, 2002, the second Eurovet Conference on EU enlargement and food safety issues will be held in Paris. During these two days, high-level speakers coming from candidate countries, member states and non-EU countries will share the latest information about food safety issues as they are reshaped by the ongoing EU enlargement process.  The conference will cover topics including
-What are the food safety risks involved in this integration ?
-How does the Union prepare to welcome the newcomers ?
-How do the candidate countries prepare to join the Union ?
-What will be the economic impact of the enlargement on the European food supply ?

The conference is organized by Eurovet with the partnership of the World Animal Health Organization, the European Commission Health and Consumer Protection Directorate-General and the General Directorate for Food of the French Ministère de l’Agriculture.

If you would like more information on the Conference, visit the website at or email to


>  The Scotts Co. and Monsanto Co. have withdrawn their application to begin selling a grass genetically designed to help keep golf courses free of weeds after getting several questions from the USDA. The companies said that they haven’t given up on marketing the grass and will submit a new application next year.  In September the USDA sought more information from Scotts and Monsanto, which decided earlier this month to withdraw the application. (AP)

>  EDEN Bioscience Corporation announced financial results for its third quarter ended September 30, 2002. Revenue for the third quarter of 2002 was $60,000, which compares to revenue of $439,000 in the third quarter of 2001. Revenue is derived solely from sales of Messenger to distributors. Net loss in the third quarter was $4.7 million, compared to a net loss of $5.9 million in the third quarter of 2001. (Business Wire)


This week’s financial reports for the third quarter sales results were not as positive as last week’s report.  It is an especially tough food animal and poultry market. The food animal and poultry areas still make up 75% of the worldwide animal health market and 60% of the US market.

The drought in the upper Midwest and west is causing herd reductions in the beef area that will impact product sales for the next one or two years.  The cash swine market has recovered some but does not provide much hope for smaller producers.  Large swine operators with contracts continue to increase their market share.

The bright spot continues to be the companion animal segment where product sales increased in nutrition, flea, tick, heartworm, and other areas continue to post single-digit or low double-digit increases.

We believe that those companies with a broad mix of products far both food animals and companion animals will lead the growth in 2003.

Have a great weekend.

[Ron Brakke]

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