The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for June 29, 2001
Copyright © Brakke Consulting, Inc.

Brakke Consulting announced that Eli Thomssen, BS, MBA, has joined the firm effective immediately.  Mr. Thomssen, formerly a VP Business Development and Strategic Planning for Pharmacia Animal Health, brings over thirty years of animal health industry experience to the firm, with particular expertise in the areas of mergers, acquisitions, divestitures and licensing activity.  Mr. Thomssen has been involved in numerous transactions with some of the leading products and companies in the industry.  His addition to Brakke Consulting will strengthen the firm’s ability to act as a resource to our clients in the area of business development.  Mr. Thomssen will also be developing a new service for the firm that will be announced in the near future.

Company News Releases

>  Pharmacia Animal Health announced that the 100-Day Contract Dairy Wellness Plan is now online.  The 100-Day Contract focuses on cow health during the critical 100 days that begin 30 days before freshening and end 70 days after calving.  The new Web site,, provides detailed information about putting the 100-Day Contract into practice, including dry-cow, fresh-cow and breeding programs.  The site offers management tools, troubleshooting tips and answers to specific questions.  Also included is an online calculator so producers can figure out how improved reproduction results can enhance their bottom line.  (company press release)

>  Virbac Corporation announced that the FDA has approved Iverhart Plus (ivermectin and
pyrantel pamoate), a new product for canine heartworm prevention and intestinal parasite control. Virbac will sell the product under an exclusive licensing arrangement starting in the fall of 2001. Iverhart Plus is equivalent biologically to the market leader, Merial’s Heartgard Plus. Iverhart Plus will be sold exclusively through veterinarians and prescribed in monthly increments and six-month packages. (Business Wire)

>  The Board of Directors of Pfizer Inc authorized the company to purchase up to $5 billion worth of its currently issued stock, with a limit of 120 million shares.  The company said it expects purchases will be made from time to time during the next 18 months in the open market or in privately negotiated transactions.  Common stock acquired through this program will be available for general corporate purposes.  As of May 31, 2001, Pfizer had approximately 6.3 billion shares of common stock outstanding. (PRNewswire)

>  Tyson Foods, Inc. and IBP, inc. have agreed on merger plans, and Tyson will acquire all outstanding shares of IBP on the same economic terms provided by the original agreement.
The transaction will result in a combined company with approximately 28% share of the beef market, 25% share of the chicken market, and 18% share of the pork market. Tyson will pay $30 in cash for 50.1% of IBP’s common shares, and the remaining IBP shares will be converted into Tyson Class A common stock. Tyson will commence a cash tender offer to purchase up to 50.1%  of the outstanding shares of IBP no later than July 5 and will complete the offer no later than Sept. 1. Conversion of remaining IBP shares will occur no later than Nov. 15. (AgWeb)

>  Embrex, Inc. announced that it has acquired an exclusive worldwide license from Pfizer Inc. to all pending patents relating to in ovo poultry coccidiosis vaccines.  Pfizer and Embrex collaborated in the area of coccidiosis vaccines from 1997 to 2000.  Under the license agreement, Pfizer will receive milestone payments from Embrex and a royalty on future sales of the vaccine. Recent field trials, coordinated with two major U.S. poultry producers, have demonstrated that the unique in ovo coccidiosis vaccine under development is safe and efficacious, with performance equivalent to the commonly used coccidiostats. (PRNewswire)

>  Neogen Corporation has entered into a letter of intent to acquire Gene-Trak Systems, a wholly owned subsidiary of Vysis, Inc.  The purchase is subject to due diligence and approval of the Boards of Directors of Neogen and Vysis, and is expected to be completed in less than 60 days. Gene-Trak Systems is a supplier of foodborne pathogen detection products based on DNA probe technology, which offer a complementary approach to Neogen’s immunosorbent assay technology for the testing of food for dangerous bacteria.  Gene-Trak’s revenues were approximately $3 million in its most recently completed fiscal year.  Gene- Trak’s products have enjoyed a substantial market share in the egg product industry, and include tests for Salmonella and Listeria monocytogenes, a pathogen of particular concern to the food industry. (PRNewswire)

>  Smithfield Foods, Inc. announced the closing of its purchase of approximately 13 million
shares or 50 percent of the outstanding common shares of Pinnacle Foods, Inc. for $6 million. This is Smithfield Foods’ second transaction in the last week to accelerate its case-ready business in the Northeast.  Smithfield will combine its distribution capabilities with Pinnacle and recently-acquired Moyer Packing Company to offer better service and a greater variety of pre-priced, pre-packaged case-ready products to food retailers.  Pinnacle produces pork, beef, lamb and veal; Moyer is a beef processor.  Pinnacle expects sales of about $60 million this year.  The agreement also calls for Smithfield Foods to provide a $30 million revolving line of credit to Pinnacle for working capital and other purposes. (PRNewswire)

>  Infigen, Inc., announced that the company has been awarded another patent in a series of issued U.S. patents that encompass essential fundamental steps for the cloning of mammals. Several patents issued worldwide cover critical elements of Infigen’s proprietary nuclear transfer (NT) technology platform.  Processes covered by relevant Infigen patents are expected to eventually lessen the cost and complexity of cloning transgenic cattle and other livestock. (PRNewswire)

>  Infigen, Inc. announced that the world’s first herd of cloned dairy cows is in milk production at the company’s farms.  The milk will be evaluated and compared with milk from non-cloned Holsteins, as a part of the company’s review to be shared with the FDA and the National Academy of Sciences (NAS). The 18 cloned two-year-old cows began production in December, 2000.  All milk from the 305-day lactation cycle will be sampled and tested but will never enter the human food chain.  (PRNewswire)

>  Siemens Nuclear Medicine Group announced the availability of its new M.CAM nuclear camera designed to image small laboratory animals. The new M.CAM is capable of imaging at the molecular level and meets the stringent sensitivity requirements and spatial resolution needs demanded by researchers in the small animal-imaging field.  The M.CAM features technical innovations that allow for high-performance capabilities such as hybrid low-energy/medium-energy imaging; tomography for mice and rats at both low- and medium-energies, and ultrahigh spatial resolution using coded aperture techniques. (AnimalNet)

>   MidnightPass announced it is marketing Kittywalk, an outdoor enclosure made of sturdy industrial strength fishnet, weaved to a metal hoop-shaped wicket that easily stakes firmly into the ground and can easily be moved from place to place.   Kittywalk provides a safe haven where a cat can relax in the fresh air, eat grass, chase bugs, watch birds, exercise and enjoy the sunshine without risk of escape. This fall the company is also introducing Puppywalk and WabbitWalk for dog and rabbit owners.   (PRNewswire)


Would your firm like to make a large or small acquisition?  Do you have a company, product line, or product that you’d like to divest?  Does your firm need assistance in performing due diligence?  Do you have managers experienced in the due diligence process?

Brakke Consulting has assisted in several projects each year in the areas listed above.  With the addition of Eli Thomssen to our firm, we’ll have even more expertise as a resource for you to draw upon when considering any of these activities to expand or focus your business.  Please contact any of our Brakke Consulting offices for more information by going to our website at and clicking on the office closest to you.

Animal Health News

>  UK   Britain will start testing the brains of thousands more cattle for mad cow disease from next month to comply with European Union requirements, according to the Department for Environment, Food and Rural Affairs. Testing of older at-risk cattle which have died on farms will start on July 1 as part of an effort to gauge more accurately the extent of Britain’s mad cow disease, or bovine spongiform encephalopathy (BSE), epidemic. Britain has detected nearly 180,000 cases of BSE since mad cow disease was first found in a herd in 1986. Just over 200 cases have been found so far this year. (Reuters)

>   GERMANY   Swine fever has broken out on a farm in northern Germany, and at least 1,200 pigs will be slaughtered as a precaution. A half-mile exclusion zone was placed around the affected farm near the town of Fallingbostel, in the Lower Saxony state. Tests on animals from the farm confirmed the diagnosis of classical swine fever.  Officials were examining whether wild pigs might have transmitted the disease. (AP)

>  US   The US Supreme Court ruled that the mushroom industry’s mandatory checkoff violates the First Amendment guarantee of free speech.  Industry observers say the ruling could have repercussions for the beef, pork, dairy and egg industries, as well.  In its six-to-three ruling, the court sided with mushroom producer United Foods Inc., which argued that a mandatory mushroom promotional campaign forced the company to pay for ads that benefited its competitors.  The court previously ruled that checkoff advertisements are constitutional in heavily regulated industries like California fruit production. Justice Kennedy said the mushroom case is different, because the mushroom market is less regulated, and mushroom producers do not cooperate the way the fruit producers do. If this reasoning is applied to determine the constitutionality of other checkoffs, it is likely that each case would be judged by the amount of cohesion and regulation in each industry.  (AgWeb)

>  Burger King announced a new initiative requiring suppliers to follow new animal handling guidelines. At the same time, the company filed a petition with USDA’s Food Safety and Inspection Service (FSIS) asking for a meeting to discuss that agency’s enforcement of the Humane Slaughter Act.  In its petition, the company says that this act is “inadequately enforced” and the company wants inspectors to do a better job. Company officials will be meeting with FSIS officials on July 10 to discuss the matter.  (DirectAg)

>  US   According to the USDA, 190,000 pounds of fresh ground beef and pork were recalled by Excel Corporation in a voluntary recall due to fears of possible E. coli contamination. The USDA’s Food Safety and Inspection Service (FSIS) tested samples of the recalled products after being contacted by Georgia officials about reports of illnesses that were suspected of being associated with the meat.  Test results revealed that the meat samples were positive for E. coli O157:H7, but no direct link between the recalled meat and the illnesses has yet been confirmed. (Reuters Health)

>  US   New proposed changes to the Clean Water Act by the EPA would dramatically affect hog producers with as few as 750 head.  If adopted, these rules would represent the largest shift in water quality regulations affecting swine, beef, dairy, and poultry operations in nearly 30 years. Crop farmers applying manure on their fields may also be subject to the proposed regulations. The proposed regulations will drastically increase the number of producers requiring permits. (DirectAg)

>  Transgenic Pets LLC of is in the process of producing the world’s first allergen-free cat. The biotechnology company is headed by a medical doctor. The company has a patent pending with the U.S. Patent and Trade Office. Transgenic intends to use its proprietary technology to allow millions of consumers to enjoy the love and companionship of a pet without the cost, inconvenience, risk and limited effectiveness of current allergy treatments. (AnimalNet – Capital District Business Review)

>  According to researchers at the University of Leicester, playing songs by REM, Lou Reed, Aretha Franklin and Simon and Garfunkel encourages cows to produce more milk, as much as 3% more than cows with no music.  The opposite was true when academics from played the animals upbeat songs by groups such as Jamiroquai, Supergrass and The Wonderstuff.  A sound system was fitted in the cow sheds and music played 12 hours a day. The work was prompted by curiosity over whether the effects of music on the mood of humans would be the same for animals. (PA News)

Agribusiness News

>   Wheat growers in Kansas, Oklahoma and Texas alleged that the USDA responded too slowly to an outbreak of Karnal bunt at the southernmost edge of the nation’s wheat belt just as harvest was getting underway.  Karnal bunt is a fungus that is harmless to people but sours the taste and smell of flour made from infected kernels.  It also slightly cuts production in infected fields.  The disease’s main impact is economic: 80 countries ban imports of wheat grown in infected regions.  That could be as crippling for American growers, who last year produced nearly $6 billion of wheat, as would be the discovery of foot-and-mouth disease in U.S. livestock, said the executive vice president for the Kansas Wheat Growers Association. (AP)


Brakke Consulting Viewpoint

It’s been a relatively slow week in the animal health industry when it comes to news.  It appears that most companies were very busy finishing off the sales for the second quarter of the year.  We expect some nice 6-month results by several of our clients and a bit of belt-tightening by others.  It still looks to us like 2001 will be a good year for the industry in general.

Earlier in the newsletter we announced that Eli Thomssen is joining us to strengthen our merger & acquisition, divestiture, and due diligence services.  We believe that consolidation will continue in the industries we serve, and we plan to be on of the leading firms in that area.

To those of you in the US, be careful with your firecrackers next week, and have a great Fourth of July.

[Ron Brakke]
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