The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for December 14, 2001

Copyright © Brakke Consulting, Inc.
Company Earnings Releases

>  Biopure Corporation announced its financial results for the fourth fiscal quarter and fiscal year ended October 31, 2001.  For the quarter, the company reported a net loss of $9.4 million, compared with a net loss of $6.8 million for the corresponding period in 2000.  For the year, the company reported a net loss of $49.4 million, compared with a net loss of $36.1 million for the same period in 2000.  For the fourth quarter of fiscal 2001, total revenues increased 5.4% to $970,000 from $920,000 for the corresponding period in 2000.  For the fiscal year, total revenues increased to $3.5 million from $3.1 million in 2000.  This 13.9% increase in veterinary sales of Oxyglobin, the company’s biologic drug for treating canine anemia, reflects an 8.2% increase in U.S. sales and includes sales to our European distributor, which began in April 2001.  Total Oxyglobin sales have exceeded 90,000 units since the product’s U.S. launch in 1998. (PRNewswire)
>  H. J. Heinz Company announced results for the second quarter ended October 31, 2001. Sales in the U.S. Pet Products and Seafood segment increased 3.8% and volume increased 4.6%, primarily in pet snacks and tuna, although profits were lower than last year due to increased costs and less favorable sales mix. (Business Wire)

Company News Releases

>  Merial announced an agreement with Remedyne to jointly develop animal health medicines based on Remedyne’s DNA Adenine Methylase technology.  The two companies will conduct feasibility tests on multiple DAM-based vaccine product candidates.  Merial will receive exclusive global marketing rights to animal health products developed through the agreement.  (Veterinary Practice News)

>  The Federal Trade Commission approved Nestle S.A.’s $10.3 billion purchase of Ralston Purina. The companies agreed to sell Ralston’s Meow Mix and Alley Cat dry cat food brands to the Boston-based investment firm J.W. Childs Equity Partners II LP, which owns the pet supply company Hartz Mountain. Nestle will have to give up international trademarks for the brands and help Childs take them on. Nestle’s current pet food business has annual sales of about $3.7 billion. Last year, Ralston sales were $2.25 billion in the United States and $450 million internationally. Nestle will retain a presence in St. Louis, merging its domestic Friskies pet food business with Ralston to form Nestle Purina Pet Care, the merged companies’ North American operation. (AP)

>  The USDA has granted Lohmann Animal Health International (LAHI) US Biological Manufacturer Establishment No. 196. The new license officially consolidates the sites formerly operating as Vineland Laboratories and Maine Biological Laboratories, Inc. into one single corporate entity. The new company has three production sites – a manufacturing site and a labeling/packaging site, both in Vineland, NJ, and a manufacturing site in Winslow, Me. The effort to update registrations in all 60 countries where the company sells products is expected to take more than a year.  LAHI was formed in 2000 to consolidate the making and selling of avian vaccines previously sold as Vineland and MBL brands. Both brands will continue to be offered under the LAHI banner. In addition, LAHI markets products of Lohmann Animal Health (LAH) of Cuxhaven, Germany, in the Western hemisphere. (company press release)

>   TruePaws Family Pet Insurance Co., formerly known as BluePaw, had announced it is closing its doors.  Company officials said the tragedy of Sept. 11 caused such catastrophic losses for the insurance industry that no insurer was willing to invest in TruePaws to launch it nationally.  TruePaws will notify pet insurance policy holders at least 45 days before canceling their policy. The company had more than 2,000 customers in its Portland and Houston, Texas test markets.  (American City Business Journals)

>  Vertical Health Solutions, Inc. announced that it has filed a registration statement with the
Securities and Exchange Commission for an initial public offering of its common stock. All of the shares will be offered by Vertical Health Solutions, Inc. The managing underwriter for the offering is Kashner Davidson Securities Corporation.  Vertical Health Solutions, Inc., through its wholly owned subsidiary, Labelclick, Inc., develops, markets and distributes customized private label
supplements and health products to veterinarians in the companion animal sector, and to a lesser extent, other veterinary distributors. In addition to customized private label operations, the company sells proprietary nutriceutical products for companion animal usage, which are marketed under the Vitality Systems brand name. The company recently became a licensed
wholesale distributor of veterinary pharmaceuticals, products and supplies to veterinary clinics.  (Business Wire)

Brakke Consulting’s 2002 Animal Health Industry Overview

Every year Brakke Consulting inaugurates our Annual Industry Overview presentations at the North American and Western Veterinary Conferences.  Seating for these presentations is always limited and fills quickly.  We will be presenting the Overview twice at the North American Conference in Orlando and once at the Western Conference in Las Vegas.  You can register online by visiting our website homepage at and clicking on the time of the presentation at the location you wish to attend.  This information is located towards the bottom of our homepage beneath the world map.  Registration is $295.00 ($325.00 after 1/4/02) for the first attendee at the conference location from a company and $245.00 ($275.00 after 1/4/02) for each additional attendee at the conference location from the same company.

– North American Veterinary Conference
 Monday, January 14, 2002
 9:30 am OR 1:30 pm
– Western Veterinary Conference
 Wednesday, February 13, 2002
 9:00 am

For additional information please contact Jane Morgan at 972-243-4033 or by email at

Animal Health News

>  The European Commission withdrew market authorization for six anticoccidial feed additives for procedural reasons after an argument between member states resulted in a stalemate over the withdrawal for safety reasons of two additives, amprolium and nicarbazin.  The other four additives under discussion were meticlorpindol, meticlorpindol/methylbenzoquate, amprolium/ethopabate and dimetridazole. Companies producing these additives may reapply for licenses. (Wattnet enews)

>  FINLAND   The Finnish National Veterinary and Food Research Institute confirmed that final tests on a six-year-old cow in northern Finland suspected of carrying BSE had proven positive. The rest of the 36 animals on the farm have been destroyed.  Finnish authorities believe that milk replacements given to the calves may be the source of the BSE.  Until now, Finland had been one of only three European Union member countries, along with Sweden and Austria, to have no recorded cases of BSE.  (Meating Place)

>  US   A dairy where human albumin will be extracted and purified from the milk and used to treat burn patients and others is scheduled to begin operating in Iowa within the next three years. Currently, human blood is the only source of serum albumin.  Trans Ova Genetics and Genzyme Transgenics have been researching the project for three years, with the goal of developing genetically modified cows with the ability to produce pharmaceuticals in
their milk.  Trans Ova claims that 1,250 cows can produce 20% of the worldwide demand for
the serum. The company says the actual dairy will get off the ground in 2003, and the serum
should be available on the market by 2005. (Knight-Ridder Tribune)

>  US   The 5th Circuit Court of Appeals unanimously ruled that USDA cannot suspend inspection at a meat grinding facility for failure to meet its Salmonella Performance Standard. The Salmonella Performance Standard is part of USDA’s 1996 HACCP/Pathogen Reduction rule. The judges’ decision means that the Salmonella Performance Standard is illegal and that USDA cannot use merely the presence of Salmonella in a meat processing plant as evidence of unsanitary conditions and contaminated food products destined for human consumption. The court of appeals rejected USDA’s argument that the Salmonella standard serves as a measure of whether pathogens that are adulterants, such as E. coli O157:H7, are also present in products. The ruling stems from a November 1999 case in which the USDA stopped meat inspection at Texas-based Supreme Beef Processors ground beef processing facility after the facility failed to meet the Salmonella Performance Standard for a third time. (Wattnet)

>  US   A live animal test has been developed for chronic wasting disease in deer, a disease related to BSE.  The test, which samples tonsil tissue from live mule deer, was developed by the Colorado Division of Wildlife (DOW), providing a new tool to help prevent the spread and reduce
the prevalence of the disease in wild and captive deer herds.  The new test on tonsil tissue is more sensitive than examining the brain tissue of animals killed by the illness because prions congregate in the tonsils early in the disease’s development. But the test isn’t effective for elk, also afflicted by the disease, because the disease develops differently in the two species. (AnimalNet – Knight-Ridder Tribune)

>  US   Scientists at the USDA’s Agricultural Research Service have characterized the bacterial culprit behind nocardioform placentitis, a reproductive disease of thoroughbred racehorses that’s caused hundreds of cases of weakened or stillborn foals on farms in Kentucky’s Bluegrass region since 1986. Genetic analysis of the bacterium led scientists to conclude it is a new species in the genus Crossiella, named C. equi.  There were 144 U.S. cases of nocardioform placentitis in 1999 and 48 in 2000, all on central Kentucky farms. (AnimalNet – ARS)

>  US   A group of leading veterinary consultants and advisors have formed the Association of Veterinary Practice Management Consultants and Advisors (AVPMCA). More than 55 charter members have joined the organization that represents consultants and advisors in management, finance, law, human resources, teaching, brokerage, and marketing.  AVPMCA membership is open to those who consult or advise veterinary practices, individuals, or the profession.  For more information contact (press release)

Brakke Consulting Viewpoint

Earlier this week I was asked by a friend of ours to provide some positive comments this week on the industry.  Implied in that request is the reality that there has not be a lot of positive news to report over the past few months.  So, in an attempt to meet this request, here are a few thoughts for you to consider:

– The Animal Health Industry has made a positive impact on helping producers manufacturer animal protein that is safe, nutritious and inexpensive for consumers to enjoy.

– The Animal Health Industry has created numerous products that have improved the lives and well being of our companion animals that many of us treat as family. 

– The Animal Health Industry employees tens of thousands of people in the development, production and marketing of products and services.

Without our industry what would be the state of animal health and food safety?  We’re of the opinion that our industry is experiencing too much of a bunker mentality.  While is may be easier in the short term to not challenge some of the criticism, in the long term we will pay the price.  So, I encourage each of you this Holiday Season to remind your friends and family that you work for or with an animal health company.  Ask them how they enjoy the healthful and nutritious animal protein they are eating and how your company is a part of producing it.  Also, remind them to put an animal health product under the tree for their companion animal friend.

Finally, we must comment on the retirement of Fintan Molloy from BIVI at the end of the year.  Fintan has spent 35 years serving the animal industry and making it a better place for all of us.  We’ve grown to know and respect Fintan for his insights, humor, and support.  Fintan has been one of those unique people who puts an imprint on whatever he touches.  One way or another
Fintan made doing business with his company fun by bringing a one liner to the surface when it was needed.  We wish Fintan and Janice the best in retirement and thank them for a job well done.

[Ron Brakke]

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