The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for April 5, 2002
Copyright © Brakke Consulting, Inc.

Company Earnings Releases

> Doane Pet Care Company reported results for its fourth quarter and fiscal year ended December 29, 2001. The Company reported a net loss of $7.0 million for its fourth quarter ended
December 29, 2001 on net sales of $221.5 million, compared to a net loss of $9.5 million on net sales of $246.5 million for the fourth quarter ended December 30, 2000.  Sales performance in the 2001 fourth quarter was impacted by the divestitures of Deep Run and Perham completed earlier in 2001. For the full year, the Company reported a net loss of $21.9 million on a 2.3% increase in net sales to $895.8 million, compared to a net loss of $4.9 million on net sales of $875.8 million for the previous fiscal year.  After including the results of Arovit for the full year 2000 and excluding the Perham and Deep Run divestitures from both periods, net sales were essentially flat from fiscal 2000 to 2001. (PRNewswire)

Company News Releases

>  Adisseo was officially created as an independent company, following the acquisition of Aventis’ animal nutrition activity by CVC Capital Partners Ltd., a leading European private equity investment company.  Adisseo, with its new shareholder’s backing, has already outlined an ambitious investment program of over €230M ($200 million). (Feedinfo)

>  Two out of three pet owners want to claim their pet as a tax deduction, according to a nationwide survey conducted by Bayer. To recognize pet parents this tax season, and flea season, Bayer is sponsoring the “Advantage Tax Break Contest,” an essay contest will award one grand-prize winner $2,000 in cash, the equivalent of a tax deduction for a child. (PRNewswire)

>  Veterinary Products Laboratories (VPL) announced that it has formed a strategic alliance with Poly-Med, Inc., which includes exclusive rights to a select group of proprietary tissue adhesive compositions.  The result is patented Tissumend, a synthetic absorbable tissue adhesive for veterinary medicine.  Tissumend is a methoxypropyl cyanoacrylate composition product.  It can be used for many surgical procedures such as declaws, spays, neuters, wound closures and laser surgery.  (company press release)

>  Virbac Corporation announced that it has launched Allermyl Shampoo, which helps manage pruritus (chronic itching) in dogs and cats due to allergic skin disease, including atopic dermatitis. (Business Wire)

>  PETsMART, Inc. announced the successful completion of a two-phased, early redemption of $172.5 million in 6.75 percent Convertible Subordinated Notes. On February 22, 2002, the company successfully completed a partial conversion of $75 million of the Convertible Subordinated Notes. The remaining $97.5 million were converted on March 25, 2002. The Notes were scheduled to come due in November 2004. (Business Wire)

CORRECTION:  Last week’s newsletter reported that a new Treponema bacterin was the first vaccine for papillomatous digital dermatitis, or heel warts.  While it is the first vaccine effective against the spirochete Treponema, Hygieia Biological Laboratories licensed a heel wart vaccine effective against Serpens species bacteria, another purported cause of heel warts, in 1996 in California.  This was followed in 1998 by license approval through USDA.   The cause of foot warts is not definitively known, but spirochete bacteria are found in nearly all lesions.  (company communication)


Due Diligence Seminar in Dallas
Tuesday & Wednesday April 23 & 24th

Registration, Agenda, Information online at

Registration is $1,250, and seating is limited.

Animal Health News

>  US   Russia will lift the ban on U.S. poultry imports on April 10, if the United States complies with 13 inspection and certification demands, according to Russia’s agriculture minister. Russia and the United States signed a protocol to lift the poultry ban by April 10. As part of the protocol, exports to Russia by 14 U.S. meat firms in whose product salmonella was detected, will continue to be banned until a full inspection is carried out. The United States also agreed to use forgery-proof blanks of veterinary certificates and will draw up a list of government veterinarians empowered to issue such certificates.  Russia and the United States also agreed to hold joint inspections of U.S. poultry farms and slaughterhouses from time to time. Poultry provided from the United Sates will be randomly tested for salmonella. (Meating Place)

>  US   Virginia agriculture officials have ordered the slaughter of almost 300,000 turkeys and chickens in the Shenandoah Valley that have contracted avian influenza.  The virus, which is the first major outbreak in the state in almost twenty years, was discovered two weeks ago in turkeys in Rockingham County and has since spread to farms in neighboring counties.  This week, farmers and state officials began speeding up their testing for infected birds so that they can cull them and contain the virus. Maryland officials have not discovered any outbreaks of the virus but are monitoring Virginia’s status. (Meating Place)

>  US   Researchers have developed transgenic mice whose milk prevents malaria in monkeys, a development that could pave the way for low cost vaccine production. The NIAID team worked with investigators from Genzyme Transgenics to develop two transgenic mouse strains. Each carries a form of the gene for a surface protein from Plasmodium falciparum, the malaria parasite. The researchers designed the transgenes to switch on in the mammary glands, resulting in large quantities of the protein being secreted in the milk.  Early experiments show that the process should be able to be scaled up to livestock animals. (AnimalNet – AgBiotech Bulletin)

>  UK   Britain is considering lifting the six-month quarantine on pets arriving from the United States and Canada, in part under pressure from diplomats who don’t want to roam without their pets.  A century-old law requires animals from most countries to be quarantined for six months upon their arrival in rabies-free Britain. Two years ago, the government introduced a pet passport plan allowing cats and dogs from Western Europe to skip quarantine as long as they have documents confirming their identity and rabies-free status. The plan was later extended to a total of 50 territories including Australia, New Zealand, Japan and Hawaii. (AP)

>  US    McDonald’s is joining Burger King and other fast-food chains in buying beef from overseas, citing a shortage of the U.S. meat that’s lean enough to make their burgers. For now, McDonald’s is testing the imported beef in about 400 of its 13,000 U.S. restaurants, all in the Southeast. Customers won’t know the difference, he said.  McDonald’s is the biggest single buyer of both U.S. and Australian beef, which the chain uses extensively outside of the United States. (AP)

>  US   Colorado state wildlife officials killed 150 deer in the northwestern part of the state this week and plan to kill at least 150 more to determine whether a chronic wasting disease is spreading. The disease, which is related to bovine spongiform encephalopathy, has been confirmed in two deer on a ranch about 200 miles northwest of Denver. The cases were the first found in wild deer west of the Continental Divide. CWD is not known to spread from deer and elk to cattle or people, but scientists say that cannot be ruled out. (AP)

>  US   Federal regulators have been asked to investigate a recent rumor of a cattle disease outbreak, which was blamed for a steep decline in beef prices that was estimated to have cost the industry as much as $50 million.  The Kansas Attorney General is asking for a federal probe into last month’s unfounded rumor that an outbreak of foot-and-mouth disease had hit northeast Kansas. The Commodity Futures Trading Commission has jurisdiction over cases involving allegations of price manipulation.  Kansas’ request follows similar calls for an investigation from several states, the National Cattlemen’s Beef Association and other interested parties.  (AP)

>  US   The Puppy Protection Act, passed by the US Senate, requires puppies to have plenty of human contact before they are put up for sale. Part of a Senate-approved overhaul of farm programs, the Act also would specify how often dogs could be bred. The AKC, dog breeders, and animal welfare groups are battling over the merits and drawbacks of such a bill.  The act includes a three-strikes-you’re-out provision that would revoke a breeder’s license after a third violation. The USDA now regulates only breeders whose puppies are sold through pet stores. But the rules potentially could be imposed on many more breeders, including those who sell directly to the public. (AP)

>  Worldwise, Inc. introduced its new PoochPlanet brand for dogs and SmartyKat brand
for cats, which are made from recycled, reclaimed or sustainably harvested materials.  Worldwise sells its lines of consumer products through Sam’s Club, a division of Wal-Mart Stores. (PRNewswire)

Agribusiness News

>  Bayer AG indicated it was ready to sell parts of its insecticides business to gain European Union approval for its 7.25 billion euro ($6.39 billion) acquisition of Aventis CropScience. The purchase would make Bayer the second biggest player in the $30 billion-a-year agrochemicals market, behind Switzerland’s Syngenta AG. Bayer has agreed to sell Aventis’s Fipronil insecticide for uses in agriculture, with the option to license it back outside the EU and United States. The company would also outlicense its Imidacloprid insecticide against cockroaches and termites in the United States and Europe. Four key Bayer products based on Imidacloprid had total sales of 608 million euros ($536 million) last year. (Reuters)

Brakke Consulting Viewpoint

We have spent most of the week updating the Brakke Consulting 3-year strategic plan.  Yes, we do practice what we preach and develop a business plan to improve our business and services to serve our clients needs.  Thanks to a number of our clients and consultants for providing input into our planning process.  It is always good to know where there is room for improvement.  We have come a long way in the first 16 years, and we’re looking forward to the next 16, which should even be more exciting.  We hope you’re planning to be part of our future growth.

During the week we also had the opportunity to meet with several other suppliers of services to the industries we serve to compare notes.  It is great to learn how other firms have developed to support the industry.  The more we visit with manufacturers and suppliers to the industry, the more encouraged we are about the future.  While there are challenges to be conquered, there are still many opportunities for those with the insights and desire to pursue them.  The computer and the Internet offer new opportunities for our businesses to be more proactive, with a precision that we did not have 10 or even 5 years ago.  Some of the database and website marketing innovations allow us to identify and track business opportunities like never before.  We hope you’re all using these tools in your firms effectively.

Have a great weekend!! 

[Ron Brakke]

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