Animal Health News & Notes for April 20, 2001

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Brakke Consulting’s
Animal Health News & Notes for April 20, 2001
Copyright © Brakke Consulting, Inc.
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Company Earnings Releases

>  Pfizer reported that first quarter 2001 sales of the Animal Health business were down 17% (down 13% excluding the effects of foreign exchange) to $220 million, mainly due to the recent divestiture of feed-additive product lines, foreign exchange, the effect of the initial distribution of the anti-parasitic Revolution in 2000, and the impact of mad cow and foot and mouth diseases in Europe. (company website)

>  Eli Lilly reported that worldwide sales for Elanco in the first quarter of 2001 for were $164.1 million, an increase of 6% when compared with the first quarter of 2000.  Excluding the effect of exchange rates, sales grew by 9% for the quarter. (Company website)

>  Schering-Plough reported that first quarter 2001 sales of animal health products were down 2%  (up 2% when foreign exchange is excluded) to $153 million.  (PRNewswire)

>  IDEXX Laboratories, Inc. reported net income of $7.6 million for the quarter ended March 31, 2001, compared to net income of $8.0 million for the same period in the prior year. Revenues for the first quarter were $91.43 million compared to $91.39 million for the first quarter of 2000. Performance was particularly strong for water testing products, veterinary laboratory services, recently approved veterinary pharmaceutical product and several veterinary diagnostic products. (company website)

>  A year-end audit at Embrex has revealed embezzlement in its European operations, forcing the company to adjust fourth-quarter and year-end earnings.  Revenues were not affected, but net earnings for the fourth quarter had to be adjusted downward by 4 cents per share to 21 cents per share.  Net income for the full year was reduced by $1.2 million, resulting in net earnings of $6.6 million, or 77 cents per share.  (Animal Pharm)

>  Hill’s Pet Nutrition accounted for 12% of Colgate-Palmolive worldwide sales in the first quarter. Hill’s increased unit volume a healthy 5%, against a very strong year-ago performance. Sales increased 4% and operating profits increased 12%. Hill’s-U.S. strengthened its leadership position in the specialty channel with domestic unit volume up. Recent introductions of Science Diet Sensitive Skin and Science Diet Sensitive Stomach contributed to market share gains, as
did consumption-building programs targeted to veterinarians treating young puppies and kittens. All international regions also grew strongly, led by Germany, Australia, New Zealand, Korea, Argentina and Brazil. Expanded distribution, upgraded merchandising programs and continued gains from Science Diet feline Hairball Control and Science Diet feline Oral Care contributed to growth.  (Business Wire)

>  Alpharma Inc. previewed financial results for the first quarter and updated its outlook for the full year 2001.  Actual results for the first quarter will be reported on April 30, 2001. Based on preliminary results, the company expects to report increased revenue and net income for the first quarter ended March 31, 2001, but taking into account the significantly higher number of shares outstanding, the company will not achieve its estimated earnings per share for the quarter. (PRNewswire)

>  McDonald’s Corp.’s profits tumbled 16 percent as Europeans’ wariness of beef and weak currencies carved into the burger giant’s international sales, sending earnings lower for a second straight quarter. The world’s biggest restaurant company said Thursday it earned $378.3
million, or 29 cents a share, down from $450.9 million, or 33 cents a share,
in the first quarter of 2000. (AP)

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Company News Releases

>  Intervet has announced the development of a new serological test able to distinguish between antibodies generated in response to field strains of foot-and-mouth virus and those induced by vaccination.  The test is due for market launch in September, and could dramatically change vaccination policies around the world.  Many countries persist with a nonvaccination policy because of the damage a change would cause to the meat export market.  (Animal Pharm)

>  NETHERLANDS – The Dutch food group Wessanen NV has sold its U.S. dairy unit, which includes Marigold Foods and Crowley Foods, to National Dairy Holdings L.P. for $400 million.
National Dairy Holdings is a partnership between U.S. industry participants and Dairy Farmers of America Inc. The company has put the sale of European dairy firm Leerdammer Company on hold due to the adverse investment climate sparked by foot-and-mouth disease.  Wessanen  wants to get rid of its dairy activities, which accounted for about 40 percent of the group’s $3.45 billion turnover last year.  The sale is expected to be completed in the second quarter.  Wessanen’s U.S. dairy firms, Marigold Foods and Crowley Foods, had combined sales of approximately $1 billion last year. (AgWeb.com)

>  The Wall Street Journal reported that Purina Mills Inc. has received a warning letter from the FDA, saying that two separate inspections found that it failed to follow FDA rules, failing to ensure that drugs used in animal feed don’t harm animals or humans. The agency said the company failed to provide certain documentation proving that it was in compliance with FDA rules, and that employees are properly trained, the paper said. A poorly trained employee caused the January incident that resulted in 1,222 Texas cattle eating feed containing byproducts of other cows, in violation of agency rules to prevent the spread of mad cow disease.  (AnimalNet – Reuters)

>  Purina Mills officials are defending the safety of the company’s animal feed products following a warning letter from the FDA. Company officials said the letter has more to do with proper labeling and record-keeping than the safety of its products. (AP)

>  GERMANY – 14 federal states in Germany have terminated their contract with Bayer AG to supply FMD vaccines if needed.  From 2002 onwards these states are threatening to follow the example of Hessen and the Saarland, who have entered into a contract with Merial, which allegedly supplies FMD vaccines at considerably lower cost.  A spokesperson for the Bayer group called the contract termination “quite normal”. The ten-year contract with the federal states via the FMD vaccine bank would have been extended automatically without the termination.  Bayer is maintaining a vaccine reserve bank on behalf of the 14 states, and recently increased its stocks to 1.1 million vaccine units for each of the twelve most important virus strains. (Chemical Newsflash)

>  AUSTRALIA – Bayer Australia Ltd. launched Advantage Duo, a new product for controlling fleas and preventing heartworm disease in dogs. Advantage Due is a combination of imidacloprid and ivermectin, and is formulated as a spot-on.  (IVS)

>  US – Smithfield Foods Inc. has signed an agreement to buy Moyer Packing Co., the pork producer’s first foray into the beef sector. Moyer, with annual sales of about $600 million, is the country’s ninth largest beef processor. Terms of the acquisition were not released. (Emarkets – AP)

>  US  – Biocor has launched two new vaccines in the US.  FPV-1 Non-adjuvant is a single-antigen killed virus feline panleukopenia vaccine.  The vaccine is safe to use in vaccinating pregnant queens and young kittens.  The other new vaccine, Bronchicine CAe, is a new formulation of its injectable canine Bordetella bronchisepta vaccine.  (Animal Pharm)

>  US  – Medical Economics/Thomson Healthcare announced that Veterinary Economics was a finalist for a Jesse H. Neal National Business Journalism  Award for editorial achievement, a prestigious accolade recognizing editorial excellence in independent business publications. In the category of Best How-to Article or Subject-related Series of How-to Articles, “Selling Your Practice” was a finalist entry.  The Jesse H. Neal Business Journalism Awards were established by American Business Media in 1955 to honor journalistic enterprise, service to the field, and editorial craftsmanship. The Neal Awards are divided into three  classifications according to the publication’s size based on advertising revenue. (PRNewswire)

>  US  – Veterinary Pet Insurance (VPI) announced that rabbits are the newest type of pet to be covered under its Avian & Exotic Pet Plan.  Rabbits can be enrolled in a comprehensive health plan that is similar to the coverage available for dogs, cats and birds through VPI. Under VPI’s Rabbit coverage, annual premiums are $120.  The policy covers such things as office calls, prescriptions, laboratory fees, treatments, diagnostics, surgery and hospitalization. (PRNewswire)

>  US – MetaFarms.com, Inc., a provider of software-as-a-service to livestock producers, announced it has formed a strategic business alliance with the Swine Veterinary Center, a global consulting veterinary practice.  Terms of the relationship were not disclosed. Under the agreement, the company plans to work with the Swine Vet Center to help Metafarms’ clients utilize the veterinary group’s proprietary consulting tools, including spreadsheet models, databases, and their renowned training programs. (PRNewswire)

>  US  – Petsvetsandyou has created a buying group to help veterinarian members to save on pharmaceuticals, supplies and equipment.  The company is also creating a website hosting service for its members, where they can create their own personalized websites to promote their practices.  (dvm newsmagazine)

>  Bioenvision Inc. announced the formation of a separate wholly-owned division for the development and distribution of animal healthcare products derived from the Company’s product portfolio. The Company’s efforts to date have focused on the treatment of human disease,
mainly cancer, but ongoing studies in the veterinary field have shown efficacy in several animal disorders. The division will begin by marketing Modrastane for the treatment of Cushing’s disease in dogs and horses. The product has already received a veterinary license in the UK.  Modrastane also has demonstrated an ability to induce hair growth in dogs with alopecia X, a condition that causes hair loss in certain breeds of dogs. The disease has been compared with the male-pattern baldness seen in man. (Business Wire)

>  US – The Western Veterinary Conference Board of Directors recently announced the formation of a Veterinary Student Scholarship Program.  Through the fund established by this program, one third-year student enrolled in each of 27 US veterinary colleges will be awarded a $2,500 scholarship to assist with payment of his/her 2001-2002 educational expenses.  Scholarship recipients will be selected by their respective colleges of veterinary medicine, based on criteria of demonstrated leadership and financial need.  All of the Western Veterinary Conference Scholars will also be guests at the next Western Veterinary Conference, receiving complimentary registration, travel and accommodations. (press release)

>  US  – The AFIA Board of Directors has approved a Plan of Merger with the American Alfalfa Processors Association.  The plan of merger requires the approval of two-thirds of the members represented at or attending a membership meeting.  A special membership meeting to approve the plan of merger will be held at 10:00 a.m. on May 1, 2001 at the AFIA offices. (association press release)

>  UK  – Guildhay launched its Canine CardioScreen test kit to diagnose heart failure in dogs in the UK.  The assay is based on the finding that plasma levels of natriuretic peptides (ANP) in humans and dogs have been shown to correlate with the presence of heart failure.  The kit will allow heart failure to be diagnosed at an earlier stage, allowing treatment with therapies such as ACE inhibitors to be started to improve the quality and length of a dog’s life.  Following the UK rollout, Guildhay will focus on the European and North American markets.  Guildhay has entered into a joint promotional agreement with Intervet and a distribution agreement with Canadian Biovet.  (Animal Pharm)

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  BRAKKE CONSULTING, INC.
    2001 US Animal Health Manufacturers Directories are now available

2001 U.S. Animal Health Manufacturers Directories here!  If you have already ordered this directory, you should receive it in the mail early next week. 

The 2001 U.S. Animal Health Distributors Directories will be printed and available the end of
April.  

If you have not ordered your new directories you can do so by contacting Jane Morgan in our Dallas office.   The directories are $250 each.  Additional copies of the same directory to the same shipping address are $75 each.   Orders maybe placed by contacting Jane Morgan in the Dallas office at jmorgan@brakkeconsulting.com mailto:jmorgan@brakkeconsulting.com or (972) 243-4033.  

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Animal Health News

>  Federal emergency officials are preparing for a U.S. outbreak of foot-and-mouth disease, a prospect they see as highly likely. Officials from FEMA and about 75 other agencies ranging from the USDA to the CIA met in Washington to review plans for addressing an outbreak of the highly infectious animal virus.  The plans call for treating an outbreak much the same as a natural disaster, in which states take primary responsibility and call on federal resources as needed. (E-markets – UPI)

>  Britain’s battle against the foot-and-mouth epidemic ran into fresh problems when farmers balked at government plans to vaccinate livestock. The government’s push for the vaccine is a turnaround from last month when Agriculture Minister Nick Brown said mass vaccination was “a very unattractive option for our farmers and the country.” Vaccinating animals is not only costly but can hit meat exports since vaccinated animals cannot be distinguished from those incubating the disease. Some countries refuse to buy meat from countries that use vaccines against the disease. Britain said on Wednesday it had found 19 new infected sites, taking the total to 1,385. The epidemic has been financially devastating for Britain’s normally lucrative tourism industry as well as for its farmers. British business, leaving agriculture aside, stands to lose a much as 40 billion pounds ($57 billion) by July because of the epidemic, the Institute of Directors said on Thursday. (Reuters)

>   The British government has lifted foot-and-mouth disease restrictions in two British counties – the first such move since the epidemic broke out in February. Restrictions ended Thursday night, hours after the government’s chief scientific adviser, Professor David King, said the epidemic was “fully under control.’’  (AP)

>  Preliminary tests for foot-and-mouth disease on pigs from a farm in the southwestern German state of Baden-Wuerttemberg were negative. Initial tests at the state testing laboratory in Tuebingen proved negative. A final result was expected in the next few days. Four animals showed symptoms which suggested the highly contagious ailment and two had been slaughtered. A three-kilometre area around the farm had been sealed off. (Reuters)

>  Some US consumers are curbing their purchases of beef and other animal products because of confusion and concern about outbreaks of mad cow disease and food-and-mouth disease in Europe, according to a survey released on Thursday by a public relations company. 14 percent of respondents said they had already changed their food purchase or eating habits because of news
reports about mad cow and foot-and-mouth disease. The survey also showed that 19 percent of consumers interviewed wrongly believed that mad cow and foot-and-mouth were the same disease, while 27 percent believed the diseases were related. Nearly half of the survey respondents said they believed that cows infected with foot-and-mouth disease could infect humans. The survey was conducted April 6-9 and has a margin of error of plus or minus
3 percent, the company said. (Reuters)

>  New Zealand scientists think they have identified the cause of the bovine spongiform encephalopathy (BSE) in the UK, and it’s not scrapie-infected sheep—it’s antelope. Antelope were imported into southwest England in the 1970s for safari parks. After they lived in the parks, the antelope suffered degenerative diseases similar to BSE, and the scientists think the animals’ remains were used in cattle feed. The theory is a significant departure from other theories that link BSE to scrapie-infected sheep or genetic mutations. (AgWeb)

>  The USDA reported that a meat plant is recalling 14.5 million pounds of meat and poultry products that may be contaminated.  Bar-S Foods Co. voluntarily recalled the meat, which may be contaminated with  Listeria monocytogenes. Recalled products include lunch meats, whole hams, sausages, hot dogs and corn dogs. (AP)

>  The United States could become brucellosis-free by the end of the year, according to a top USDA official quoted by the Livestock Marketing Association (LMA). The disease is still a problem in wildlife, particularly among the bison in Yellowstone National Park. USDA and state officials are working through a joint management plan to keep bison that wander outside the park from transmitting the disease to cattle, reported LMA.  (Agweb)

>  BioValidity’s Pet Nutrition Knowledgebase, a comprehensive source of dog and cat nutrition information and research, is now available for licensing to Schools of Veterinary Medicine. BioValidity, a firm that has developed customized knowledgebases for the life science industries since 1996, previously offered its knowledgebases only to corporate clients.  BioValidity now is marketing the PetNutrition Knowledgebase (PNK) to veterinary schools, animal health institutions, and research universities across North America. The PNK offers research data on canine and feline nutrition and contains information derived by reviewing over 16,000 research articles from more than 750 journals. Information in the PetNutrition Knowledgebase is searchable by nutritional substance, health concerns, and body systems.  (Business Wire)

>  Western University of Health Sciences has been approved by the American Veterinary Medical Association to start the US’ 28th veterinary medical program.  The AVMA granted Western U.’s College of Veterinary Medicine a letter of reasonable assurance on March 4, 2001, the first step in the accreditation process.  The charter veterinary class isn’t expected until fall 2003.  (dvm newsmagazine)

>  Researchers at the University of California, Davis, have discovered evidence of the organism that causes cat scratch disease, Bartonella henselae, in ticks, suggesting that the arthropod has the potential to transmit the disease.  While it is not certain that ticks are vectors of these diseases, it is evident that they carry Bartonella DNA and could be potential vectors.  Researchers found that almost 20% of the ticks they tested were positive for the organism, a
percentage that’s even higher than for known tick-borne diseases like Borrelia burgdorferi (the cause of Lyme disease) or ehrlichia. (AnimalNet – American Society for Microbiology)

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Agribusiness News

>  After an 11-month investigation involving IBP’s slaughter handling practices, the beef packing company is free of charges. The Humane Farming Association and several other groups alleged that an IBP plant had improperly handled livestock.  State and county officials reported there is insufficient evidence against IBP to support allegations and that the animal rights activists “manufactured” evidence against the company. (DirectAg – Farm Progress)

>  US – Based on recent government data, hog slaughter in the first quarter of 2001 slipped 1.7%, but dressed hog weights were 2% heavier. The result was pork production about on par with year-earlier levels, according to Jim Mintert, Kansas State University agricultural economist. “Even though pork production was near a year ago, prices were higher than in 2000’s first quarter,” the economist says. Mintert expects slaughter to “shift gears” this spring and move above year-ago levels by 1.5 to 2%. That increase, combined with continued heavy weights, could push pork production up 2.5 to 3% over spring, 2000 levels. (Direct-Ag – Farm Progress)

>  UCCnet, a not-for-profit, tax-exempt subsidiary of the Uniform Code Council (UCC), today announced that Wegmans Food Markets and the Ralston Purina Company successfully communicated item information for a complete product category through UCCnet’s GLOBALregistry(TM).  The companies will continue to conduct any product information changes and updates for items included in the category through the organization’s registry. The benefits of offering industry standards-compliant synchronized data and industry-defined application requirements allow UCCnet’s GLOBALregistry(TM) to be a platform for trade exchanges.  The foundational services facilitate interoperability and serve these trading communities with applications that may not be available through their particular exchange. (AP)
 
>  Canada – A 17-year-old Canadian student who manages the genetics program on a multimillion-dollar dairy operation has helped create a cow that is on pace to set a Canadian record for milk production.  According to Holstein Canada, the three-year old cow, known as Daisycrest Dragoon Kimberly, is the top all-round performing cow in Canadian history, when volume, fat and protein are considered. This year, the 1,300-pound cow is on track to produce nearly 58,000 pounds of milk.  (Animal-net – AgWeb.com)

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Brakke Consulting Viewpoint
 
On April 15th Brakke Consulting, Inc. celebrated its’ 15th anniversary.  The past 15 years have seen many changes in the animal health industry.  At this time, we especially appreciate our clients, those who have been with us since our beginning and the new ones that continually enter the industry and request our services.  I also want to thank our consultants, their knowledge and dedication to both our firm and the industry are remarkable.  We have made many friends over the past 15 years – thank you all!

It has been a busy week in the animal health industry, judging by the number of stories we’ve summarized for you.  The companies reported reasonably good results for the first quarter of 2001.  The announcement by Intervet that they had produced a new diagnostic that will distinguish between natural antibodies and those induced by vaccination for the foot-and-mouth virus is one of the most exciting items of the week.  This new technology could be of great benefit to the industry.  Another story out of New Zeeland indicating that deer may have been the source of BSE in the UK is also an interesting new twist.  It would be great if we could solve the BSE and foot-and-mouth issues for the industry this year.

I have to comment on the story out of Canada related to the 17 year old student who has helped produce a dairy cow that may produce 58,000 pounds of milk this year.  How many milk cows would be needed if milk production moves towards the 50,000 pounds per cow range in the next few years?  Milk shakes for everyone this weekend to help with the over supply that is on the way!!
[Ron Brakke]
 
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