Animal Health News & Notes for September 20, 2002

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Brakke Consulting’s
Animal Health News & Notes for September 20, 2002
Copyright © Brakke Consulting, Inc.
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COMPANY NEWS RELEASES

>  The U.S. Postal Service and PETsMART, Inc. have launched a joint promotion to sell the new Neuter or Spay commemorative postage stamps in PETsMART stores.  Stamps also are available at all U.S. Post Offices. The Postal Service will distribute more than 21,000 panes of 20 stamps to PETsMART stores throughout the U.S.  The $9.99 per-pane purchase price available at PETsMART stores includes a $2.59 donation to PETsMART Charities to fund local neuter and spay programs.  (PRNewswire)

>  Genesis Bioventures, Inc. announced that the US government has approved appropriations for the USDA to evaluate new rapid tests for detection of prion-infected animals, including the lateral flow strip test for BSE  developed by one of GBI’s investee companies, Prion Developmental Laboratories, Inc. (“PDL”). The PDL strip test is an easy-to-use, patents pending rapid strip test for detecting BSE. It is similar to a home pregnancy test and will be used on-site using brain tissue taking less than twenty minutes to complete with accurate, easily interpreted results. (AnimalNet)

>  US   Pet Zone has created the Doggie Dentist Toothbrush for dog owners who care about protecting their dog’s health.  The new battery-powered dog toothbrush uses flavored dog toothpastes to make brushing a pleasant experience for your pet. (PRNewswire)

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ANIMAL HEALTH NEWS

>  EUROPE   The European Court has ruled that a ban on the use of certain antibiotics is not disproportionate. Judgements of the Court of First Instance in the cases of Pfizer Animal Health SA against the European Council and Alpharma Inc against the European Council have upheld the council’s decision to ban the use in animal feeds. “Despite uncertainty as to whether there is a link between the use of certain antibiotics as additives and increased resistance to those antibiotics in humans, the ban on the products is not a disproportionate measure given the need to protect public health,” the court ruling states.  A Council regulation adopted on 17 December 1998 banned the use of four antibiotics as additives in animal feedstuffs: virginiamycin, bacitracin zinc, spiramycin and tylosin phosphate. (Wattnet Meatnews)

>  FRANCE   The French food safety agency AFSSA has announced that an end to the country’s illegal ban would not endanger public safety. A joint statement from three French ministries has said that the possibility of importing British beef would not put the health of the French consumer at risk. A recommendation is expected to be sent to the French prime minister within the next 10 days. (Wattnet Meatnews)

>  UK   Spinal cord has been found in frozen beef imported from Germany into the UK, in breach of BSE controls.  Meat Hygiene Service inspectors found the spinal cord in one hindquarter of frozen beef out of a consignment. Under European law, SRM must be removed immediately after slaughter, stained, and disposed of safely. This is the eleventh case of SRM in beef imported from Germany into the UK. (Wattnet Meatnews)

>  EU   The US Foreign Sales Corporation program has triggered a trade dispute between the United States and the European Union, opening the door for $4 billion worth of sanctions by the EU. So far, the European Commission has published a list of US food products, including live animals, raw hides, skins and leathers, animal byproducts, meat and edible offal, as well as other goods, that could be hit with trade-war retaliation.  A World Trade Organization arbitration panel ruled that the FSC program amounts to an illegal export subsidy, and that the EU could assess sanctions against US products. The list covers about $14 billion worth of products but will be pared down over the next several months to $4 billion worth of products. (Drovers Alert)

>  US   A new early warning diagnostic system that gives veterinarians more time to vaccinate against spreading diseases was introduced to the swine industry by the University of Minnesota Veterinary Diagnostic Laboratory. Using this system, veterinarians will be able to electronically submit diagnostic information and easily access, through a Web site, the analysis of their data and how it relates to the potential spread of a disease. After veterinarians submit their information to the system, the diagnostic laboratories will then quickly provide guidance, via downloadable electronic maps, about the spread pattern of diseases such as pseudorabies, erysipelas or PRRS, in addition to future threats as they are discovered. Veterinarians will have received permission from herd owners to submit information to the system. Only those participating herds will then be included in the early warning program to avoid any breach of confidentiality. Pfizer Animal Health, Inc., and PIC USA, a Sygen Company both supported the development of the University of Minnesota’s system. (Business Wire)

>  UK   Britain is to resume exports of fresh meat for the first time since the February 2001 outbreak of foot-and-mouth disease.  The Welsh Rural Development Minister said that the first consignment of Welsh beef has been processed according to European Union rules implemented to ensure that no meat from diseased animals is exported. The meat will be sent to a major supplier in the Netherlands on Sept. 25.  All exports of fresh meat from Britain were banned when the foot-and-mouth outbreak started. The European Union lifted the restrictions in July. (AP)

>  US   The first case of West Nile Virus infection in a dog in Indiana has been diagnosed by the University of Illinois Diagnostic Lab.  The dog was referred to the Veterinary Teaching Hospital at the University of Illinois for neurological disease.  The dog did not survive and WNV was found by testing after death.  (press release)

>  US   A congressional audit has found that the public is at risk for illnesses from tainted meat and poultry because the USDA is not doing enough to oversee slaughterhouses and processing plants.  USDA officials said they already have identified many of the problems cited by the General Accounting Office (GAO) and taken steps to correct them. The GAO report follows complaints by some lawmakers that the department, through its inspection service, has not adequately explained how it handled a recall this summer of 19 million pounds of contaminated hamburger meat. (AP)

>  US   USDA-APHIS Veterinary Services, Emergency Programs has been notified that the infectious agent Actinobacillus (Hemophilius) pleuropneumoniae (APP) may have been acquired by unauthorized individuals from a laboratory in the US. This particular strain causes encephalitis and rapid mortality in pigs.  Producers and veterinarians should pay specific attention to swine populations and be alert to any unusual symptoms in pigs such as encephalitis, acute pneumonia, and sudden death.  Any APP diagnosis that causes unusual clinical conditions, encephalitis, and sudden death should be reported to the State Veterinarian and/or Area Veterinarian in Charge.  APP can be treated with injectable antibiotics.  (Center for Veterinary Biologics)

>  US   Scientists have discovered an elusive, mutated gene that causes certain sheep to have unusually big and muscular hindquarters.  The attribute could prove beneficial in breeding sheep because it enables them to convert food into muscle 30% more efficiently than normal sheep. (AnimalNet – Duke University)

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BRAKKE CONSULTING VIEWPOINT

This past week I have attended the 15th Annual Bear Stearns Healthcare Conference in NYC with over 3,000 health care executives, investors and advisors.  It was a great opportunity to listen and observe senior managers from the leading pharmaceutical and biotechnology companies talk about the current status and future of their companies.  It is clearly a challenging time for many of the companies participating in the health care market.  While the pipeline of new human products looks promising, the number of “new blockbusters” seems to have declined, according to an IMS Industry report. 

The one area that appears to be having dramatic growth is in the area of generic drugs.  This is because a number of the leading human drugs are reaching maturity and have either just gone off-patent or will do so shortly. 

The fact that 2002 is an election year also adds to the negative publicity related to drug companies. One number that IMS reported was how pharmaceuticals are experiencing “a bad rap” since they only make up 10% of the total healthcare economy.  The physicians and hospitals make up a much larger portion of the costs. 

What does or could this mean to the animal health, veterinary, and pet markets?

1) Continued corporate pressure on AH divisions to increase sales and profits in a market that is not growing at the rate of the human markets

2) Reduced access to new compounds or technology from the parent or biotech companies

3) Declining value of the importance of the animal health business in the portfolio of the parent company, which could result in a decision to either “harvest faster” or “divest.” (Only one company, other than Idexx, mentioned their animal health business.)

4) Aggressive acquisition or licensing activities by the leading AH companies in order to keep pace with the human parent growth expectations.

What is the biggest challenge? Senior management of the animal health companies need to assist their corporate parents in understanding the animal health business. We believe companies must decide whether they should be an animal health care company or a pharmaceutical company serving a portion of the animal health industry. There is a big difference. 

Have a great weekend.

[Ron Brakke]

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