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Brakke Consulting’s
Animal Health News & Notes for October 12, 2001
Copyright © Brakke Consulting, Inc.
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Company Earnings Releases
> Novartis AG announced that its sales had risen 11 percent in the first nine months of this year from a year ago. The total was $14.53 billion. Animal health sales were down 6% in the period. The US economic slowdown as well as the continued problems due to the foot and mouth disease epidemic in the UK were sited. The farm animal business grew in the Asia Pacific region and in Latin America. Tiamulin sales grew. The companion animal business contended with continued competitive pressure in the flea control segment. Sales of Fortekor, the heart failure treatment for dogs, grew. Capstar was launched in the UK and is expected to add new impetus to sales. (company press release)
> Alpharma, Inc. announced it will revise its financial statements for 1999, 2000 and the first two quarters of 2001. The revision will change the timing of recognition of revenue for certain sales of the Company’s Animal Health Division. The company estimates that the net effect of these changes will be to increase previously reported sales and operating income in 2001 by approximately $30 million and $17 million, respectively. An aggregate reduction of approximately the same amount of sales and operating income will result over the 1999-2000 fiscal years. (PRNewswire)
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Company News Releases
> Bayer announced the successful completion of its negotiations to acquire Aventis CropScience, by signing the purchase agreement with Aventis SA and Schering AG for $6.646 billion, roughly, 1.9 times sales value in 2000. The business will include combined agrochemical activities along with seeds and biotechnology. The transaction will not include the StarLink technology and its related potential liabilities as these remain with Aventis. (Wood Mackenzie)
> Akzo Nobel’s Pharma’s Paul Brons commented that “Our strategic trio – Organon, Intervet and Diosynth – provides Pharma with the best basis for continuing organic growth and healthy profitability, in a recent statement. This statement comes as Invtervet moved into the number 2 spot in animal healthcare worldwide with growth of 10% in the first half of 2001. (Business Wire)
> Iams introduced Dental Defense to its line of Eukanuba Veterinary Diets Senior Plus, as well as to the dry senior Eukanuba dog and cat foods. The Eukanuba Dental Defense uses micro-cleansing crystals that are applied to the kibble surface, which embed in the plaque on the tooth and help to prevent tartar formation. (DVM Newsmagazine)
> Bayer has chosen VetCentric to deliver Advantage Topical Solution directly to clients on behalf of recommending veterinarians. Bayer and VetCentric will co-promote the client home delivery option to veterinarians not currently using this service. (company press release)
> The Butler Company announced the launch of the AccessButler.Com initiative, enabling veterinary customers to better manage their business with The Butler Company. This new web platform will provide real time, relevant information to Butler customers about their veterinary business. (company press release)
> Heska Corporation announced that for the second consecutive year, Heska was named to
Deloitte and Touche’s prestigious “Technology Fast 50,” Program for Colorado, a ranking of the 50 fastest growing technology companies in the state. Rankings are based on the percentage growth in revenues from 1996-2000 (five-year period). Heska’s increase in revenues of 429% during this period resulted in a 25 ranking overall in the Fast 50 for Colorado. To qualify for the Fast 50, companies must have had operating revenues of at least $50,000 in 1996 and $1,000,000 in 2000, must be public or private companies headquartered in Colorado; and be “technology companies” defined as companies that produce technology, manufacture a technology product, or devote a high percentage of effort to research and development of technology. (PRNewswire)
> Bioniche Life Sciences Inc. announced the acquisition of Horizon Technology Pty Limited, an Australian biotechnology company. Through its wholly owned subsidiary in Australia, the Company acquired both the business and assets of Horizon Technology Pty Limited, an Australian animal health products company specializing in the development and manufacture of reproductive hormones to enhance fertility in livestock. Currently, Bioniche Life Science’s animal health division, Vetrepharm, is the dominant player in the global reproductive hormone market. The purchase price was satisfied by the assumption of debt; issuance of common shares; and the granting of options, with additional options to be granted contingent upon certain sales targets being met. (AnimalNet)
> Oncolytics Biotech Inc. received approval from the NASDAQ Stock Market to begin trading today on the NASDAQ Small-Cap Market under the ticker symbol “ONCY.” In May of 2001, the Company filed an investigational new drug submission for a Phase II clinical trial of REOLYSIN for the treatment of Stage T2A prostate cancers. In November of 2000, Oncolytics entered into a worldwide licensing agreement with Pfizer Inc. for the development and marketing of the reovirus for animal health applications. (PRNewswire)
> TANOX Inc. announced that the U.S. District Court for the Northern District of California found that “Tanox’s right to independently develop certain anti-IgE antibodies [is] clear.” The Court ruled that Tanox may use information acquired under its tripartite agreement with Genetech, Inc. and Novartis Pharma AG. (PRNewsire)
> Land O’Lakes Inc. has completed the purchase of Purina Mills Inc. for $230 million in cash, and that under the deal announced in June, Land O’Lakes also will assume about $125 million to $130 million in debt. (AP)
> V.I. Technologies, a biotechnology company, announced that its INACTINE™ system demonstrated high efficiency in removing prion proteins from red blood cell concentrates. Prion proteins in their pathogenic form are the agents that cause “Mad Coe Disease”. (PRNewsire)
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Brakke Consulting, Inc. announces second
DUE DILIGENCE SEMINAR
New York City, Wednesday, November 28th and Thursday, November 29th, Brakke Consulting, Inc. will repeat it’s successful Due Diligence Seminar recently held in Chicago in September. Registration is $1,000 if registered through Monday, October 15th and $1,250 after that date. Registration is limited. Please contact Roger Cummings or Jane Morgan at the Dallas office
972-243-4033 or by email at rcummings@brakkeconsulting.com or jmorgan@brakkeconsulting.com for further information.
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Australian Animal Health Market Grows by 3%
The Australian Animal Health grew by 3% in the year to the end of June, according to the Australian Animal Health Industry Audit. Of the 11 companies participating for more than a year, four recorded substantial growth while two showed major falls in turnover. More significant growth was recorded in the musculoskeletal, nutritional and metabolism, and antibiotic markets. (Rural Business)
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Notes from Association of Veterinary Biologics Companies Meeting
Twenty companies were represented at the Association of Veterinary Biologics Companies (AVBC) held this last week. Bruce Addison, outgoing president, did an excellent job of maintaining attendance and having a successful meeting in light of the recent events in the U.S. Robert (Bob) Pitts of Vetrepharm Research was elected president for the coming year. In addition to elections, the members started a process to redefine and state the mission and objectives of AVBC for the future. The meeting was entitled “Veterinary Biologics – A global Role”. Subjects such as education / training of veterinarians, overseas regulators, regulatory harmonization, the role of government, new biological technologies, and biological threats were openly discussed between biological companies and the USDA officials. It was good to see the open cooperation with government, especially at a time when AVBC members, apart from supplying normal product needs to animal producers and pet owners, have much knowledge, defensive thinking and action to contribute in threatening areas such as BSE, FMD, and bioterrorism. John Short, Brakke Consulting, Inc. For more information you can reach John at his office at 828 236-0585 or jshort@brakkeconsulting.com.
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Animal Health News
> U.S. The 2001 Well-Managed Practice™ Study, published by Veterinary Economics Magazine, revealed declining profits in veterinary practices. Revenue climbed in 2000, but this growth did not translate into bigger paychecks for the practice owners and their team members. (Veterinary Healthcare Communications)
> U.S. Senator Richard Durbin from Illinois is hoping to create a new, independent agency to oversee all food inspection, one that would ensure that all food products are held to the same safety standards. Durbin’s bill calls for an agency whose functions would combine those of the Food Safety and Inspection Service, FDA’s Center for Food Safety and Applied Nutrition, the Center for Veterinary Medicine, the Department of Commerce’s Seafood Inspection Program and the food safety functions of other federal agencies.
> GERMANY A new case of classical swine fever has been discovered in Germany. The incidence discovered on 5 October occurred on a farm in Spree-Neisse in Brandenburg state. The World Organization for Animal Health says that there were two susceptible cases one of which was confirmed. Both animals were destroyed. The source of the disease has not been discovered, but the OIE says that other animals in the herd will be slaughtered and destroyed. A ban has also been placed on the movement of animals in the area and previous movement of animals on and off of the infected farm is being traced. (MeatNews.com)
> CANADA Researchers created white clover that expressed a gene from a bacterium that can cause respiratory disease in cattle. This is a step towards developing plants as edible vaccines against bovine pneumonic pasteurellosis, also known as shipping fever. (Animal Net)
> TOKYO Japan’s Health Ministry plans to inspect all cattle due to be processed into food, tightening up its checks for mad cow disease which currently only cover cows aged 30 months or more. Ministry officials said BSE testing would begin at 117 meat hygiene inspection centers nationwide after inspectors had been trained in new testing methods similar to those used in Europe. (Reuters)
> TOKYO Japanese authorities have found a second cow suspected of having mad cow disease. If confirmed it would be the second animal found to have the disease ailment in Japan. (AP)
> TOKYO Farm ministry officials were cited as saying Wednesday that the Japanese government plans to provide some 10 billion yen in aid by next March to producers of meat and bone meal (MBM) following its decision Tuesday to ban the use of MBM because of its suspected link to mad cow disease. (AP)
> Colorado State University announced the birth of two foals produced from eggs harvested from a mare, frozen, and then thawed. The eggs were implanted in two mares that had already been inseminated. According to CSU, this is the first live birth of foals produced from frozen eggs. (DVM Newsmagazine)
> SWEDEN A stray cow that had taken refuge on a farm in southern Sweden was euthanized because it could not be identified as a European Union-certified animal, according to the farmer who had sheltered it. The cow, which became somewhat of a national celebrity after its case was
widely publicized in national newspapers five weeks ago, did not have a plastic identification tag in its ear. Under EU rules, all unregistered cattle must be put to death as a safeguard against bovine spongiform encephalopathy, better known as mad cow disease. (AP)
> US Secretary of Agriculture Ann M. Veneman announced the distribution of nearly $2 million in grants in thirty-two states to bolster emergency animal disease prevention, preparedness, response, and recovery systems. The goal of the grant program is to assist states in meeting and exceeding animal disease response standards set by a steering committee of the National Animal Health emergency Management System. (NAHEMS). NAHEMS is a comprehensive system that includes federal, state and community governments, voluntary organizations, academic institutions and industry groups. (PRNewswire)
> LONDON Britain will begin exporting pork this month for the first time since the foot-and-mouth epidemic crippled the nation’s farming industry. Counties that have not had a case of the disease and do not adjoin high-risk areas will be able to export pork and bacon from Oct. 22. (AP)
> HARRISBURG, PA The Pennsylvania Attorney General announced he has shut down a Lycoming County dog kennel and ordered restitution for 62 consumers located in 18 Pennsylvania counties and five other states who purchased sick, diseased, and/or genetically flawed puppies. The owners of the kennel will pay nearly $30,000 in restitution, civil penalties and the Commonwealth’s investigation costs (PRNewsire)
> SOMERVILLE, MASS RESOLVE: The National Infertility Association, launched a new magazines this month, Family Building, with its first cover story exploring the benefits of pets for people experiencing infertility. (PRNewsire)
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Agribusiness News
> Dow AgroSciences LLC and DEKALB Genetics Corporation jointly announced the resolution of a significant patent dispute regarding the use of Bacillus thuringiensis (Bt) insect resistance technology in corn. Through a license and settlement agreement, Dow AgroSciences has obtained a license to the DEKALB patents for the sale of Herculex corn, as well as Dow AgroSciences’ pipeline Bt product intended to control corn rootworm, in exchange for the payment of a royalty to DEKALB. The financial terms of the settlement are confidential. (PRNewswire)
> Monsanto Company and DuPont announced they have resolved the issues related to Monsanto’s MON810 YieldGard ® insect protected corn trait used in Pioneer Hi-Bred International Inc.s corn hybrids. The resolution includes the dismissal of several lawsuits regarding the developmont, licensing and sale of MON810 YieldGard ® products. (PRNewswire)
> Syngenta announced the creation of its foundation for Sustainable Agriculture. The Foundation aims to contribute to the improvement of world food security and quality. It is currently promoting three projects in Sub-Saharan Africa. These share the basic aim of contributing to the sustainable security of food supplies grown by small farmers. (company press release)
> The U.S. Department of Agriculture and the U.S. Environmental Protection Agency have done little to implement their 1993 pledge to encourage farmers to reduce pesticide use through the promotion of integrated pest management programs, a recent report found. The report, “Management Improvements Needed to Further Promote Integrated Pest Management,” was authored by the General Accounting Office , U.S. Congress’s ’watchdog’ agency. (PANUPS)
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Brakke Consulting, Inc. announces new
PAIN MANAGEMENT STUDY
The new Brakke Consulting report, Pain Management Products for Dogs and Cats, is an overview of the market for these products. The report covers existing pain management products, both those approved for veterinary use and human drugs used off-label in small animals. It also provides valuable insight into the products for which veterinarians are still hoping.
The study is available for a price of $2,750. Reports can be shipped immediately upon receive any order. For more information on our survey services, please contact Dr. Lynn Fondon at lfondon@brakkeconsulting.com or call 972-243-4033.
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Brakke Consulting Viewpoint
It appears the most companies are pleased with the close of the third quarter and the start of the fourth and final quarter for the year. We’ve had a number of positive reports on sales of products to and from the veterinarian the past three weeks. We are hopefully over the most negative business impact related to the events of September 11th. We have noted a major attitude change related to project requests and approvals the past two weeks. These would not happen if our clients were not positive on the future. Thanks for the business and support.
Please be alert to the bio-terrorism issues that have surfaced in the past week. These could have an impact on the animal production business. Anything we can do in our companies to assist investigators and other officials related to preventing these incidents from occurring would be a major contribution. It is also important to be a positive influence by helping educate the public and employees in the areas we have expertise. This is not a time for any of us to take a wait and see attitude and later say “I told you so” or “we knew that weeks or years ago”.
Have a good weekend and travel safely,
[Ron Brakke]
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