The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for June 22, 2001

Copyright © Brakke Consulting, Inc.
Company Earnings Releases

>  Vetoquinol reported sales of 111 million euros ($105 million) for the year 2000, a 14% increase over 1999.  Companion animal products now represent approximately 40% of total sales.  (Animal Pharm)

>  International Absorbents Inc. announced financial results for the First Quarter ended April 30, 2001. Revenues for the quarter increased by 17% to $2.5 million versus $2.2 million for the first quarter last year.  Net income was $268,000.  During the quarter the company added three new product lines. (PRNewswire)

Company News Releases

>  Purina Mills Inc. has agreed to a $360 million buyout by Land O’Lakes Inc. The deal would be worth $23 a share for Purina Mills stockholders, a 19.2% premium over last Friday’s closing price.  Land O’Lakes had sales of $5.8 billion and profits of $103 million last year. The cooperative does business in all 50 states and more than 50 countries. Land O’Lakes created the largest feed company in North America last September, when it combined its feed operations with those of Farmland Industries, a Kansas City-based cooperative.  Purina Mills will become part of that business, Land O’Lakes Farmland LLC. However, it will continue to be based in St. Louis and would have its own sales and marketing teams. (Emarkets – St. Louis Post-Dispatch)

>  Intervet announced that the veterinary product Lasix, the original veterinary furosemide product, will now be called SALIX in the veterinary industry.  The name change is pursuant to an agreement with Aventis Pharmaceuticals; when Hoechst Roussel was sold to Intervet, Intervet agreed that Aventis would retain Lasix as the registered trademark for the human drug, and Intervet would find a new name for the veterinary product.  SALIX will be unchanged from the Lasix product except for the name change.  (Feedstuffs)

>  A Delaware judge ruled that Tyson Foods Inc. must proceed with its $3.2 billion acquisition of IBP Inc., concluding that the Arkansas poultry producer acted improperly when it called off the buyout in March.   Tyson pulled out of the deal after learning that an IBP subsidiary had grossly overstated its profits, forcing IBP to restate downward recent years’ earnings – earnings which Tyson said it had relied upon in the bidding for IBP.  The ruling appears to set the stage for what would be an extremely unusual forced corporate marriage.  But while IBP indicated that it is still prepared to be acquired by Tyson, the ill-starred merger is no sure thing.  Analysts predicted that Tyson would prefer to pay IBP to get clear of the obligation.  (Emarkets – Chicago Tribune)

>  Idexx announced FDA approval of its Parallux Residue Test, which screens milk for all six beta lactams in under four minutes. The assays approved include Beta Lactam, Pen/Ceph, Cillins, Cephapirin, Ceftiofur and Cloxacillin.  (Animal Pharm)

>  Kemin Americas, Inc., and Food Technology Service, Inc. have agreed to combine their resources to promote a comprehensive pathogen reduction program for meat and poultry
producers. The addition of Food Tech’s “first in North America” food irradiation technology to the K-One program is the final assurance in the process of producing table-ready meat and poultry products.  Food Technology Service, Inc. is the first irradiation company in North America dedicated to the food market. (Business Wire)

>  More than 40 international manufacturers of pet products and pet food have entered into an agreement with TR Cutler Inc. to promote their products to the US consumer market. The Berlin-based European Pet Products Alliance senior director stated that he is confident that with this campaign, the 40+ brand names will become well known throughout North America. (Petfood Industry E-newsletter)

>  Precise Pet Products launched a new, all-natural range of pet food for dogs and cats.  The food is aimed at the premium niche and is sold through pet stores, feed stores, veterinarians and human health food stores.  The pet food contains cranberries for urinary tract health, carrots for eyesight and kelp to boost thyroid function.  It also contains probiotics to aid digestion.  (Animal Pharm)

>  In the first veterinary application of IGEN International Inc.’s Pathigen tests, the British government’s Veterinary Laboratories Agency (VLA) is evaluating the suitability of using three of these tests in a nationwide program for surveillance of pathogens in food production animals.  The evaluation will use IGEN’s tests to monitor Salmonella, E. coli O157, and Campylobacter in animal fecal samples.  IGEN anticipates that, after successful completion of the evaluation, the VLA would use the PATHIGEN tests to develop the work of its network of 16 government veterinary laboratories.  PATHIGEN tests are already used in the worldwide food safety testing market.  (PRNewswire)

>  GERMANY AniMedica has bought the majority of Lohmann Animal Health’s Veterinary Pharma business.  The sales encompasses all of Lohmann’s Veterinary Pharma branches in the EU (except Greece) and four other countries.  According to Lohmann, the export of products not covered by the deal will continue, and contract manufacturing activities will continue as well.  (Animal Pharm)

>  Simmons Company and their licensee Pet Goods Mfg. & Imports, a division of Tarahill, Inc., are proud to announce the successful launch of the Simmons PetCare bed at last week’s American Pet Products Manufacturing Association’s 43rd Annual Pet Products Trade Show. The PetCare beds feature Simmons’ patented Pocket Coil technology and dual density foam, the same designs used in their human beds.  There are two products in the line:  One features Beautyrest Pocketed Coil Springs to provide comfort and support for pets.  The other uses OrthoCare dual density foam to give controlled support for older pets, large breeds, or pets with hip dysplasia or joint problems.  Both come with removable, washable covers. (PRNewswire)

>, a resource dedicated to finding places that people and dogs can enjoy together, now lists over 260 dog-friendly employers in over 40 states.  The majority of dog-friendly companies can be found in California, with over 80 workplaces listed. These companies allow their employees to bring dogs to work on a regular basis, usually every day. The category with the largest amount of dog-friendly employers is the high tech industry followed by pet-related industries, healthcare, retail, manufacturing and construction, home repair, the movie industry and other miscellaneous categories. (Business Wire)

Associated Press

The American Medical Association’s policymaking House of Delegates approved a resolution at its annual meeting this week urging that “non-therapeutic” use of antibiotics in animals be phased out or eliminated.  The measure refers specifically to antibiotics that are given to humans as well. The AMA wants the government to phase out the overuse of antibiotics in livestock, broadening the organization’s campaign to curb human resistance to the lifesaving drugs.  Environmental groups applauded the action, but it was criticized by the Animal Health Institute, which represents companies that make veterinary medicines.

Animal Health Institute News Release

The Animal Health Institute released the following statement in response to a resolution adopted by the American Medical Association:

“The Animal Health Institute is committed to working with public health officials and those in the veterinary and agriculture communities to combat antibiotic resistance.  While we recognize the importance of antibiotics to human health, the AMA resolution is far too broad and sweeping, confuses therapeutic and subtherapeutic uses and is an ineffective solution to addressing antibiotic resistance.

Many segments of the animal agriculture industry are working with public health officials to implement judicious use guidelines for antibiotic use in animals.  At the same time, we have supported funding for additional research into resistance and how it is spread, and have supported funding for additional monitoring, surveillance and data collection to provide a robust information base for proposed management efforts. The best approach is for the human health and animal health industries to work together on research, education, monitoring and surveillance efforts so that each can employ the best strategies for limiting the rise of resistance.  This resolution does not represent such a cooperative effort.”


1. The usage estimates are unsupportable.  The Animal Health Institute annually releases a survey of sales of its members.  AHI estimates that of about 20 million pounds used in animals, only 2.7 million pounds (13%) are used for growth promotion.

2. Use alone is not an indication of a problem.  The amount of antimicrobials used in animals is not an indication of their contribution to resistance development in humans.  For example, Virginiamycin, a streptogramin antibiotic, has been used for over thirty years in animal feed.  Yet, at the time of approval of SYNERCID, the first human streptogramin approved, the resistance in humans was exceedingly low.  A survey of physicians in the Journal of Antimicrobial Chemotherapy indicates that the contribution to the human antimicrobial resistance problem from animal sources is very low (3.88%).

3. The resolution confuses therapeutic and subtherapeutic uses.  While the resolution calls for banning antimicrobials used at less than therapeutic levels, it cites as evidence the FDA action against fluoroquinolones, which are veterinarian prescribed therapeutic products. Fluoroquinolones are irrelevant to the topic of the resolution.  The science behind the FDA action is a topic hotly disputed.

4. The resolution is far too broad and sweeping.  The vast majority of antimicrobials used for disease prevention or growth promotion are either arsenicals or ionophores, which have absolutely no use in human medicine, or constitute antibiotics that have not been associated by public health agencies with human resistance problems (e.g. bacitracin and tylosin). The only veterinary fluoroquinolones on the market are prescription products labeled only for short-term treatment and off-label use in food animals is prohibited by regulation.  If bacterial resistance is the issue, then there is no justification for taking such a sweeping approach to animal antimicrobials.

5. The science supporting assertions in this resolution does not exist. The assertion that there is increasing evidence that resistance developed in animals is spreading to humans is simply not true.  In fact, while much work has been done there is little science to suggest a link between animal use of antimicrobials and resistance in humans.

Animal Health News

>  BRITAIN   A cow born in Britain after strict measures on feeding meat-based animal feed to cattle were put in place has been diagnosed with BSE, according to Britain’s Department for Environment, Food and Rural Affairs.  Scientists believe that BSE is caused by cattle eating contaminated meat-based animal feed, a practice banned in August, 1996. The department said the cow had been born in May 1997. The state veterinary service is investigating the case to find out whether it would cast light on the causes of BSE, including whether the disease had been passed down from the cow’s mother. (Reuters)

>  CZECH REPUBLIC   Czechs have detected no other cases of BSE among 134 cattle from a herd where one infected animal was found last week. The 134 cows were slaughtered as a precautionary measure after a six-year-old cow tested positive for BSE, in the first case outside western Europe. (Reuters)

>  SPAIN   A second case of suspected swine fever has been found in Spain, two days after
an outbreak in the same area which prompted a decision to slaughter 2,000 animals. Farmers within six miles of the farm in Catalonia are on alert for the contagious fever, while an area of around two miles around the farm is being sealed off. (Reuters)

>  EUROPE   The European Commission announced that it has indefinitely extended a ban on the use of all livestock feed containing animal meal to help prevent the spread of BSE.  The ban, which applies across the 15-nation European Union, had been set to expire at the end of this month.  It was originally put into place at the beginning of the year after the first cases of BSE appeared on the continent in France, Germany and Spain.  While the ban is indefinite, it will come under periodic review. (Emarkets – UPI)

>  US   41 horses are quarantined at 10 different North Georgia locations due to exposure to equine infectious anemia. The Georgia Agriculture Commissioner has tested those 41 quarantined, and more than 50 others as a precautionary measure.  The infected horse was found in routine testing required when a horse changes ownership, goes to events or travels out of state.  The horses in quarantine will be retested 45 days after their exposure to the
infected horse.  Results are still pending on all of the tests. (PRNewswire)

>  NEW ZEALAND   New Zealand dairy farmers approved plans to merge most of the industry into a NZ$10 billion (US$4.2 billion) processing and marketing company to take on the world’s food ingredients multi-nationals. The new “GlobalCo” brings together farmer-owned processors NZ Dairy Group and Kiwi Cooperative Dairies with their jointly owned export marketing wing the NZ Dairy Board. The one company will control about 7% of New Zealand’s gross domestic product (GDP) and 20% of the country’s annual NZ$30 billion in exports.   The merged company, which has an initial name of Global Dairy Company or GlobalCo, says it will be the world’s ninth largest dairy company with annual revenues of more than NZ$10 billion from assets of around NZ$7.5 billion. (Reuters)

>  In repeated small-scale tests performed by the USDA’s Agricultural Research Service, pigs treated with dexamethasone grew about 12% faster in their first 18 days of life than did other pigs.  Dexamethasone is a synthetic version of a type of hormone called a corticoid that is naturally produced by animals under stress.  ARS researchers are now beginning to test the one-time treatment’s long-term effects on pigs.  These tests include measures of body composition at market weight, rate of weight gain and the amount of feed consumed per pound of gain. Reducing the average time from birth to market by just one day could translate into an annual income boost of tens of millions of dollars for the nation’s swine producers.  (USDA-ARS)

>  US   A $100,000 grant from the Alfred P. Sloan Foundation has paved the way for the University of Illinois College of Veterinary Medicine to develop a comprehensive online continuing education program for veterinarians.  The three-year grant from the New York-based Sloan Foundation will be combined with matching $100,000 contributions from the UI Office of Academic Affairs and College of Veterinary Medicine to develop a full line of continually updated courses. The program will begin this fall with a Web-accessible course on pain management. Official launch of the expanded online program will be in early 2003.  The Sloan grant will help to create a core set of 10 courses, which will cover dentistry, ophthalmology, behavior, business, nutrition, imaging, exotic pets, emerging diseases and public health. The courses will vary in content, duration and credit hours.  (Univ. of Illinois press release)

>  A new type of car alarm being developed by General Motors aims to reduce the number of small children and pets left in a car in hot weather.  The new alarm, designed with babies in mind but applicable to pets as well, will alert passersby to a trapped infant or animal. The alarm, called a low-energy radar sensor, senses movement, even that as minimal as breathing.  At the same time, the temperature will be monitored.  When these two factors are combined, the alarm, connected to the car’s horn, is triggered and chirps three times. It sounds similar to the sound of an “S” in an S.O.S. call.   The device, which is still being tested, is due out in 2004 model cars.  (Vetcentric newsletter)

>  Scientists at the Pacific Northwest National Laboratory are working to turn animal manure into chemicals that could be used for antifreeze, carpeting or even plastic bottles to hold soda pop.
The national lab received an $800,000 grant from the Department of Energy’s Office of Energy Efficiency and Renewable Energy. It will pay for a two-year study of the best ways to turn manure into chemicals now made from a nonrenewable source — petroleum. (AnimalNet – Knight-Ridder Tribune)

Agribusiness News

>  Aventis SA and its partner Schering AG have settled on a valuation for their Aventis CropScience joint venture but have yet to receive satisfactory bids.  According to Aventis’ CEO, three or four’ bidders are still in the running for the CropScience agrochemical unit and are not likely to have anti-trust problems.  Sources told Reuters last week that Aventis was in talks with Dow Chemical Co., Bayer AG, and BASF AG on the sale of CropScience.   Aventis had also proposed selling the unit to Monsanto and DuPont.  In early March, Aventis’ finance chief said CropScience would be worth about seven times core EBITDA, which was 529 million euros in 2000, before exceptional items. That would suggest a valuation of 3.7 billion euros ($3.18 billion), plus about two billion euros in debt. (Reuters)

Brakke Consulting Viewpoint

There are some interesting stories to comment on this week.  I’m really happy to know that the Department of Energy is willing to spend our tax dollars on solving the animal waste problems.  If successful, we can keep stepping in “it” on our carpets, while drinking some soda or bottled water out of “it”.  Wow!!

Another story is the cautionary tale of Purina Mills.  In just a few years Purina Mills has gone from one of America’s leading brands to a business that almost no one wants to own any more.  Even the new purchaser is not consolidating it into their operations.  Could the plight of Purina Mills have anything to do with management’s inability to reinvent the company to serve a changing market?

Also, Tyson Foods appears to have novel way to acquire IBP: “The judge made us do it.”  A strategy not often employed on mergers, but undoubtedly valuable to the attorneys involved.  Hopefully the shareholders on both sides of the transaction will see the value also.

Finally, the AMA has entered the discussions on the use of antibiotics in animal production.  There was nothing in the press release related to the prescription practices of human physicians.  How many of you have sent a note, emailed or called your congressman or senator with your views on this issue?  They need to hear from you.  Do it now!

[Ron Brakke]
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