The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for September 28, 2001
Copyright © Brakke Consulting, Inc.
Company Earnings Releases

>  Neogen Corporation reported that revenues for the first quarter of its 2002 fiscal year, which ended Aug. 31, were $9.7 million, a 20% increase compared to $8.1 million in the first quarter of fiscal year 2001. The quarter’s revenues were the most for any quarter in the Company’s history. Neogen also continued its strong growth in operating income, increasing 54% on a quarter-to-quarter comparison with the previous fiscal year. Revenues from Animal Safety equine products increased 34% during the quarter. (PRNewswire)

Company News Releases

>  Alpharma Inc. announced that a fire on September 24, 2001 at its Lowell, Arkansas location resulted in the death of one Alpharma employee.  A second employee was injured.  The fire took place in a small area of the site where certain feed additives for the company’s Animal Health Division are blended.  Disruption caused by the fire is expected to have a short-term negative impact on the company’s financial results. The full extent of the damage is being evaluated, but the company believes that direct losses will be substantially covered by insurance.  The negative impact on operating income of the temporary warehouse shutdown is expected to be no greater than $5 million in the third quarter. (PRNewswire)

>  Pharmacia Animal Health has launched, an online resource filled with detailed information and research for treating periodontal disease in dogs and cats, in addition to other pet ailments such as common soft-tissue and deep-wound infections and osteomyelitis.  The website provides disease information, health management strategies and the latest news and research for veterinarians. (company press release)

>  Livestock feed producer Purina Mills Inc. has announced its planned acquisition by dairy cooperative Land O’ Lakes Inc. has been delayed due to uncertain credit markets. The company continues to pursue the transaction, and he expects it to be completed in October.  According to the terms of the merger agreement, Purina Mills has the right to terminate the deal, if Land O’Lakes has not obtained the financing required to complete the merger by Nov. 15. (AgWeb)

>  Smithfield Foods has signed letters of intent to acquire Stadler’s Country Hams, Inc. and RMH Foods, Inc. the acquisitions will help build the value-added segment of Smithfield’s business.  The company already made three similar acquisitions this year.  Stadler’s is a major producer of country hams, while RMH Foods specializes in pre-cooked pork and beef entrees under the Quick-n-Easy brand.  Terms of the agreements were not disclosed. (AgWeb)

>  Embrex and Cobb-Vantress Inc. announced that Cobb-Vantress will provide a significant amount of Embrex’s funding requirements for its ongoing development of a patented technology and device to determine the gender of poultry in ovo.  The funds will be provided in several tranches tied to achievement of certain milestones.  In return, Cobb-Vantress will receive favorable commercial terms upon adopting the gender sort device.  (Poultry Times)

>  Doskocil Manufacturing Company, Inc. announced that it has reached agreements in principle with the lead bank of its lending group and holders of Doskocil’s senior subordinated notes for an overall financial restructuring.  Doskocil will effectuate the restructuring either by means of an out-of-court transaction or pre-packaged Chapter 11 filing as a means to reach a final agreement with its creditors. Doskocil emphasized that the financial restructuring will not impact day-to-day operations with regard to its employees, customers, suppliers and distributors. Doskocil’s trade creditors have been paid on current terms and this will continue throughout the restructuring. (Business Wire)

>  Ecolab, Inc., announced that the FDA approved the company’s Inspexx 100 antimicrobial food treatment for pathogen reduction in poultry processing.  The treatment is a peroxyacid chemistry that can be used throughout all stages of poultry processing to reduce microbial contamination on poultry carcasses, parts and giblets. (Wattnet Poultry USA)

>  eMerge Interactive, Inc. announced that it has reached an agreement with the Five States Beef Initiative (FSBI) to manage individual animal data-collection and information management for its new, vertically coordinated beef-production, marketing and information-sharing system for cattlemen in Kentucky, Ohio, Indiana, Michigan, and Illinois. The FSBI is a consortium of five categories of partners: each state’s Department of Agriculture, Cattlemen’s Association/Beef Industry Councils, and Farm Bureau; United Producers, a livestock marketing cooperative; and educational institutions. (PRNewswire)

>   eMerge Interactive, Inc. announced that it has successfully completed the previously announced equity investment by Allflex Holdings Inc.  As part of the transaction eMerge sold four million restricted common shares to Allflex and received $2.8 million in cash. Including this transaction, the total number of common shares outstanding is approximately 39.4 million. (PRNewswire)

>  CANADA   Heska Corporation announced that it has received approval from the Canadian Food Inspection Agency to sell Flu Avert I.N. in Canada.  Heska has granted Novartis Animal Health Canada, Inc. exclusive distribution rights to market and sell the vaccine in Canada. Flu Avert(TM) I.N. vaccine utilizes a modified live equine influenza virus that can grow only at the cooler temperatures found in the horse’s nasal passages and upper airways, where it induces a potent immune response. Flu Avert I.N. vaccine is a single dose administered using a nasal applicator, rather than a needle. (company press release)

Brakke Consulting, Inc.
Market Surveying Services

Have you ever wished you could get a quick read on what your customers are thinking?  Brakke Consulting offers on-demand veterinary and other surveying capabilities.  We maintain a database of several hundred small animal veterinarians and can turn around a brief survey in 3 – 4 weeks.  More in-depth surveys are also available, as are surveys of other industry participants.  In addition, Brakke Consulting’s consultants include experienced moderators for focus groups, and have conducted a number of focus groups in the recent past.

For more information on our survey services, please contact Lynn Fondon at, or Roger Cummings at

Animal Health News

>  JAPAN   UK tests carried out on a Japanese cow suspected of having BSA have proved positive. This confirmed the first outbreak of the brain-wasting disease in Asia. A meat industry expert said earlier this week that domestic beef sales, including imported beef, had fallen by about 20% in some supermarket chains. (Reuters)

>  A Slovak cow has tested positive for BSE, the country’s first case.  TASR reported that the cow that tested positive for the disease was of local origin from a farm in the village of Dolna Zdana, near the central Slovak town of Ziar nad Hronom. (Reuters)

>  AUSTRALIA   Livestock Industries and the University of Melbourne have patented a vaccine formulation against the cattle disease pinkeye. The disease results in significant production losses, affecting around 10% of cattle and calves in Australian feedlots. The formulation has performed very well in laboratory trials, and contains three proteins which are common to all serotypes, the vaccine is believed to be effective against all strains of the disease.  CSIRO is seeking collaboration with commercial parties to further develop the vaccine. (AnimalNet – CSIRO)

>  UK   The British pig industry is pushing ahead with a plan to reduce zoonosis, predominately Salmonella, in the country’s pig herd. The plan is to test two pigs out of every 100 pigs passing through abattoirs.  Mirroring the Danish testing system, under the British program, producers will be given a rating, and producers with high ratings will receive guidance in helping reduce the zoonosis levels. (Pork Alert)

>  US   Sheep producers may vote on whether they want to tax themselves to pay for promoting the consumption of lamb. Producers would pay a fee of a half-cent per pound under a research and promotion program proposed by the Agriculture Department on Friday. Meat processors would be charged 30 cents per animal to help pay for the program. The program would be similar to those that have long been in place for beef, pork, dairy and other farm commodities. Sheep producers voted down a similar program in the 1990s, but that program would have required them to pay a higher fee and there would have been no assessment for packers. (AP)

>  Michigan State University researchers have developed a new pathogen identification tool, dubbed “The E. coli Sniffer”, that sniffs out gases in manure and identifies those emitted by E. coli O157:H7.  Scan results are almost immediate, compared with the 10- to 14-day wait for a laboratory to conduct conventional testing.  Because the device can provide early detection of E. coli O157:H7, livestock producers could detect the pathogen and then modify the animals’ diets to eliminate the acidic conditions in their intestinal tracts that promote the bacteria’s growth, according to the report.  Plans are in the works to commercialize this new device, which was developed with partial funding from the USDA. The researchers are also looking for companies that would be willing to put this new device into the marketplace on a commercial basis. (Meating Place)

> JAPAN   Japanese toy maker Takara Company Ltd is developing a handheld electronic devise that communicates a dog’s mood to people by interpreting its bark.  The “Bow-lingual” records the dog’s bark and sends a signal to the owner’s “emotion pager,” which displays the dog’s feelings.  The translator registers six basic emotions.  The product is expected to reach the market in Japan in early 2002. (Veterinary Economics)

Agribusiness News

>  Bayer AG will not be able to complete its takeover of the farm chemicals unit Aventis CropScience from Aventis S.A. in September as scheduled. The CFO of minority shareholder Schering AG said, however, that the deal was certain to go ahead and was only being delayed for legal reasons. (ChemicalNewsweek)


Brakke Consulting Viewpoint

I have just returned from Chicago, where we conducted our first Due Diligence Seminar.  We appreciated the efforts of the 20 attendees and five consultants who participated in the seminar.  Those of you who wanted to attend the seminar but could not missed an excellent program.  We believe the participants learned a great deal about the importance of top-quality due diligence from both the buyer’s and seller’s perspective.

The seminar evaluation forms completed by the attendees were very positive.  Because several registrants were forced to cancel due to travel complications, we are considering whether to offer another seminar before the end of the year, this time in the Northeast.  We have not yet chosen potential dates or locations, but are considering holding it in the New York City area around the first week of December.  If you interested in attending, we would appreciate your feedback regarding your ability to attend based on that time and place.  We will make an announcement finalizing the time and location within a week or two.

Have a great weekend.

 [Ron Brakke]

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