The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for July 19, 2002

Copyright © Brakke Consulting, Inc.

>  IDEXX Laboratories, Inc. reported that net income increased 30% to $12,964,000 for the quarter ended June 30, 2002 compared to the same period in the prior year.  Revenue for the second quarter of 2002 increased 4% to $105,690,000 from the second quarter of 2001.  For the first six months of 2002, net income increased 15% to $20,149,000 compared to the same period in the prior year.  Revenue for the first six months increased 5% to $202,241,000. (company press release)

>  Ceva Sante Animale reported an 11% increase in sales for the first four months of the year, when compared with the same period in 2001.  (Animal Pharm)

>  Pilgrim’s Pride announced net income of $3.3 million for the third fiscal quarter ended June 29, 2002, a $22 million decrease when compared to 2001’s third fiscal quarter net income of $25.3 million.  Pilgrim’s Pride also announced net sales for the third fiscal quarter of $637.1 million, a 1.4 percent decrease when compared with the $645.8 million for the same period last year. (Meating Place)

>  Farmland Industries reported for its fiscal third quarter ended May 31 a net loss of $189.5 million, which included $127.5 million in pre-tax restructuring and reorganization charges and losses from discontinued operations.  In the year-ago third quarter, the company had a net loss of $42.4 million, including pre-tax restructuring charges and losses from discontinued operations of $87.4 million.  The results reflect the period March 1 through May 31, the date Farmland filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code.  Operating losses of $91.0 million for the third quarter were attributable to a depressed fertilizer manufacturing industry, lower petroleum margins and maintenance on its refinery in Coffeyville, Kan., and tighter margins in the beef business.  In the year-ago third quarter, Farmland had operating income of $35.9 million. (PRNewswire)


>  Pfizer Inc. announced that it will acquire Pharmacia Corp. in a $60 billion acquisition.  The all-stock deal will create a pharmaceutical powerhouse with over $48 billion in revenues and a research budget of more than $7 billion. Pfizer is already the world’s largest drug company when measured by the overall value of its stock.  The companies said the merger should provide $2.5 billion in cost saving by 2005.  (AP)

>  Merck and Merial jointly launched the online version of The Merck Veterinary Manual, the world’s best selling and most trusted veterinary reference.  The manual is now available online at   A comprehensive reference on the diagnosis, treatment and prevention of animal disease, the online Merck Veterinary Manual is free of charge, accessible 24 hours a day, seven days a week. First introduced in 1955, the reference book is published by Merck Publishing Group, in cooperation with Merial.  (company press release)

>  Virbac Corp. announced the introduction of the Preventic Plus collar.  The original Preventic amitraz collar has been enhanced with pyriproxyfen, an insect growth regulator, so the collar now fights fleas as well as ticks.  According to the company, the pyriproxyfen remains effective up to 90 days after the collar is removed and offers 100% flea sterility within 3 days of application. (DVM Newsmagazine)

>  The Meow Mix Company, the new owners of the Meow Mix brand, announced plans to launch Meow TV, the first television programming targeted specifically at cats.  The idea was born out of recent research by cat lovers revealing that cats enjoy watching television, and The Meow Mix Company’s desire to bridge the communication gap between cats and “their” people. The program is scheduled to launch this Fall. The Meow TV half-hour special will feature visuals appealing to cats such as birds, mice and bouncing balls as well as fun and entertaining information about cats for people. (PRNewswire)

>  PetPartners Inc. announced that it has formed a partnership with the American Kennel Club (AKC) to provide pet health insurance.  PPI is the US affiliate of PetPartners PLC, the company that administers the Kennel Club insurance program in the UK.  The program is expected to roll out in 2003.  (Pet Business)

>  eMerge Interactive announced the launch of the CattleLog Pro individual animal data collection and reported system for automated management of large-scale cattle operations.  The company also released a more user-friendly version of its CattleLog ME manual system.  The growing CattleLog suite of products makes it possible for producers to electronically track cattle through the beef supply chain.  (company press release)

>  Genetic Solutions Pty., an Australian livestock-genomics company, has opened its first U.S. office. Since 2000, the company has provided a variety of DNA-based identification and diagnostic systems to cattle producers, along with beef-supply-chain processors, wholesalers and retailers around the world.  Genetic Solutions offers SureTRAK, a system that enables users to trace retail meat cuts back to the animal responsible for the cut.   The company also offers GeneSTAR marbling, a diagnostic test for genetic selection that enables cattle producers to evaluate the composition of the thyroglobulin gene-proven to account for important variation in marbling in individual cattle. (Drovers Alert)

AVMA Convention – Nashville, Tennessee

The 139th Annual AVMA Convention concluded this week in Nashville, Tennessee.  With over 9,000 individuals registering the attendance was one of the highest in the long history of the association.  Record numbers of veterinary students, technicians, and practice staff were in attendance.  Exhibitors were very pleased with the quantity and interest of attendees in the exhibit hall.  The prototype for 2002 U.S. Postal Service Stamps featuring a puppy and a kitten along with the words “Spay/Neuter” was unveiled at the meeting after being endorsed by the AVMA.


>  US   Smithfield Foods officials filed a lawsuit seeking to have Iowa’s ban on packer-livestock ownership declared unconstitutional. Joining Smithfield as plaintiffs in the lawsuit are Murphy Farms and Prestage-Stoecker Farms.   Company officials believe the Iowa Legislature unfairly singled out the company last spring when it strengthened Iowa’s prohibition of packers owning livestock in the state.   The law already prohibits beef or pork processors from owning, controlling and operating livestock operations in Iowa. The amendment bans packers from financing livestock operations and says that a processor can’t enter into a contract-feeding arrangement with a pork producer in Iowa.   This ruling could set a precedent on packer-livestock ownership, especially since the U.S. Congress will probably revisit the issue again next year. (Pork Alert)

>  US    Federal inspectors will begin notifying meat processors immediately when they suspect beef may be contaminated as a result of an E. coli outbreak.  The policy change comes after USDA’s Food Safety and Inspection Service acknowledged a 12-day lag from the time it first suspected ground beef in a recent case had been tainted with E. coli, until the time the producer, ConAgra Beef Co., was notified and a recall issued.  Inspectors will now notify a meat producer verbally and in writing as soon as a positive E. coli sample is discovered in ground beef that has been sent to a retailer or grinder. (AP)

>  US   In a letter published in the most recent issue of The New England Journal of Medicine, three doctors at the Pentagon told of a patient who acknowledged buying unprescribed antibiotics at a pet store.  The doctors warned that since pet medications were not regulated for use by people, their quality and potency were questionable.   Such antibiotics, intended to prevent fish infections, are often sold as tablets to be dissolved in aquarium water. They are available in pet stores and can also be purchased online from major pet store chains.   Some of the pet store medications ¬ include erythromycin, ampicillin and tetracycline, all frequently used to treat people.  (Knight-Ridder Tribune)

> EUROPE   The European Commission asked a court Wednesday to fine France about $160,000 a day for refusing to lift a ban on British beef imports imposed because of fears over BSE.  The fine could be imposed within “a few months’’ if the European Court of Justice agrees to use its accelerated procedure in deciding whether to approve it.  Otherwise, the procedure could take up to two years. (AP)

>  US   The New York State Bar Association this week created a 15-member committee to examine animal legal issues, ranging from pet health insurance to landlord restrictions against animals to providing for pets in wills.  The Association President said the group “will be a very practical, problem-solving committee that will look at all sides of the issues.’’   New York is one of 35 states that makes animal cruelty a felony crime.  (AP)


>  The nation’s struggling farm economy will get worse before it gets better despite an election-year farm bill that subsidizes thousands more producers, according to an analysis by the Food and Agricultural Policy Research Institute at the University of Missouri, which advises Congress on the economic impact of farm policy.  Net income for farmers is expected to plummet $7 billion this year before rebounding somewhat in 2003, from $47.9 billion in 2001 to $40.8 billion this year, then rise to $47 billion in 2003. The study projects a drop in farm income this year mostly because of tumbling livestock and milk prices.  (AP)


We have said for some time that mergers of parent companies would be the most likely scenario for continued consolidation of the larger animal health firms.  The proposed Pfizer acquisition of Pharmacia looks like it will be the first one of these mega-mergers completed.

We view the merger of these two companies as an excellent fit in both the companion animal and food animal areas  Pharmacia has some of the leading antibiotics in the food animal segment, which will complement the strong Pfizer vaccines and endectocides.

The combined companies will have sales in the range of $1.5 billion in 2002, making them one of the top two firms. In the US, we estimate the combined companies will have sales in the range of $900 million.  The merger will make the company particularly strong in the cattle and swine areas.  In addition, Pfizer could generate considerable added value to the Pharmacia products in the global markets.

Earlier this week, several of our consultants spent a couple of days attending a most successful AVMA meeting.  Dr Bruce Little and his staff provided a well-planned and managed event that was well attended by both veterinarians and exhibitors.  Congratulations, AVMA, on a great meeting.

[Ron Brakke]

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