The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for April 6, 2001

Copyright © Brakke Consulting, Inc.
Company Earnings Releases

>  Roche reported that sales of vitamins and fine chemicals to the animal feed industry in the fiscal year 2000 were 52% of the CHF 3,605 million in sales, or approximately CHF 1,875 million ($1,164 million).  The company noted that sales of carotenoids were exceptionally good, due primarily to a strong demand for astaxanthin in the aquaculture sector in Norway and Chile and for canthaxanthin in Canada.  Biotin sales were also up.  Ronozyme P, a new phytase product, was approved for marketing in a number of countries and has already contributed appreciably to good sales growth in the division. Roche divested its medicinal feed additives business in 2000.  (company annual report)

>  Doane Pet Care Company reported a net loss of $9.5 million for its fourth quarter ended December 30, 2000 on net sales of $251.0 million, compared to net income of $9.5 million
on net sales of $205.1 million for the 1999 fourth quarter.  The 2000 fourth quarter was unfavorably impacted by $19.6 million of non-recurring charges primarily relating to the closure of certain inefficient manufacturing facilities. Doane reported a net loss of $4.9 million for its fiscal year ended December 30, 2000 on net sales of $891.9 million, compared to net income of $21.4 million on net sales of $770.6 million for the 1999 full year.  Full year 2000 results included non-recurring charges of $28.6 million.  The Company announced the closing of seven inefficient manufacturing facilities in the last two years in an effort to improve long-term financial performance.  Results for the current fourth quarter and fiscal year were not comparable to the reported results for the same fiscal 1999 periods due to the Company’s acquisition of Arovit in the second quarter of 2000 and the non-recurring charges discussed above.  (PRNewswire)


Company News Releases

>  Nutro Products announced the creation of a family of foods formulated to meet the nutritional needs of large breed dogs.  The line includes large breed diets for senior dogs and overweight dogs.  The food contains added amounts of glucosamine and chondroitin, the building blocks of healthy joints.  At the same time, Nutro introduced a new product created to fight plaque and tartar buildup in dogs of all sizes.  Natural Choice Dental Care has a special fiber blend and comes in a larger kibble size.  The Dental Care food also contains cranberry powder, oil of clove and alfalfa to combat bad breath.  (Feedstuffs)

>  Abaxis announced the release o f the new Prep Profile II and the Large Animal Profile.  With the addition of ALP, the Prep Profile II now provides the veterinarian with a 6-chemistry panel for presurgical screening.  The Large Animal Profile, which includes phosphorus and magnesium, is specifically designed for the bovine practitioner.  (PRNewswire)

>  OptiGen has a new test for progressive retinal atrophy in Siberian Huskies and Samoyeds.  The test is performed on a small blood sample.  PRA is a genetic eye disease that causes blindness in a number of dog breeds. By testing breeding stock, breeders would be able to avoid producing affected offspring.  (Groom & Board)

>  Multipet International has acquired the product lines of Truax International.  Financial terms of the deal were not announced.  Multipet acquired several patented cat toys, as wells as several toys under development, including Truax’s Christmas 2001 costume line.  (Pet Product News)

> rolled out the first flushable kitty toilet.  LitterFree, a self-cleaning cat litter box, is hooked to your home’s water and drainage system.  LitterFree eliminates the need to scoop cat waste or frequently change used kitty litter. Washable, dust-free granules are automatically treated by a deodorizing, cleaning solution. (Business Wire)

    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

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 or (972) 243-4033.  

Animal Health News

>  Dutch officials started vaccinating 50,000 animals at farms in the central village of Kootwijkerbroek where angry farmers had earlier sealed off a farm infected with foot-and-mouth disease.  The Meat and Animal Inspection service experts will take two to three days to finish the work on about 200 farms. The animals, which will be culled within two months, are located within a two-kilometer radius of the farm where the highly infectious disease was discovered on Thursday. The total cull of animals in the Netherlands is expected to reach nearly 100,000.  So far there are 11 confirmed cases of foot-and-mouth. (AnimalNet – The Globe and Mail)

>  Several pigs suspected of carrying foot-and-mouth disease in a small town in North Carolina have tested negative.  Blood samples were immediately taken by USDA officials and sent to a USDA laboratory.  On Thursday, the tests came back negative for foot-and-mouth disease, and the United States remains free of the disease. (AnimalNet – Reuters/AP)

>  Initial tests have been ordered on a cow found on a farm in western Denmark with suspected foot-and-mouth symptoms, according to the Danish Veterinary and Food  Administration. The result of the tests are expected by Thursday evening. (Reuters)

>  US – The USDA is preparing to tighten standards on imports of dairy products as an extra precaution against foot-and-mouth disease, adding that the measure will be the latest in a series of steps taken by the USDA in the past month to reduce the chances of the highly contagious disease spreading from the European Union and other infected countries to U.S. soil.  American importers will have to certify that dairy products, such as cottage cheese or mozzarella, have been properly heat-treated or aged to kill any foot-and-mouth virus that could have been transmitted from an infected animal. (AnimalNet – Reuters)

>  US – Two of three cloned calves at California State University, Chico, have died in the past few weeks, slowing the development of cloned livestock for commercial use. Three cloned Charolais calves were born on March 9 as part of a research project through the school’s College of Agriculture. While the calves appeared healthy for the first 11 days of their lives, one died on day 12, and three days later another died. Immune problems are common in cloned calves, and researchers believe the two calves died from an intestinal infection. The third calf nearly died from a similar infection, but it is now gaining weight and appears to be absorbing antibodies from the surrogate mother’s milk. The calves are part of a larger national research project to determine the viability of cloned calves. (AgWeb)

>  US – Proposed legislation in California would require microchips to be implanted in cats and dogs to reduce the number of former pets killed in the state’s animal shelters each year. Under Senate Bill 236, dogs and cats would be “chipped” and the owner’s identification entered in a national registry. The bill is slated for debate in the judiciary committee next month. The American Kennel Club, which claims to maintain the largest database of microchipped pets in the country, has reunited 43,221 lost pets with owners, according to its website. (AVI website)

>  US – The American Humane Association is holding its third annual national Tag Day on April 7.  Tag Day comes at a crucial time of the year when warmer temperatures mean more people will be outdoors with their pets.  Increased outdoor activity always corresponds with an increase in lost animals arriving at shelters.  AHA hopes Tag Day activities around the country will have a positive effect in reducing these seasonally higher numbers. (PRNewswire)

>  Parents who worry that their household cat might trigger asthma in their children shouldn’t be too quick to get rid of the pet, according to a study that appears in the March 10 issue of The Lancet. The study shows that high levels of cat allergen in the home decrease the risk of asthma, apparently by altering the immune response to cats. For many allergens, such as the house dust mite, the higher the level of exposure, the higher the likelihood of a person producing “allergic” antibodies (IgE). High allergen levels also increase a person’s risk of becoming allergic and developing asthma.  Apparently, cat exposure is different.  However, high exposure to cat allergen appears to be protective for some children and a risk factor for others. (AVI website)

>  CANADA – A new vaccine for controlling E. coli O157:H7 in cattle has been developed through a collaboration between the Veterinary Infectious Disease Organization (VIDO) at the University of Saskatchewan in Saskatoon, the University of British Columbia (UBC) in Vancouver, and the Alberta Research Council in Edmonton. The vaccine is specific to the deadly strain and its close relatives. Currently, no vaccine or other methods exist for effectively controlling E. coli O157:H7, but vaccines that control other types of disease caused by the E. coli bacteria in cattle are commercially available.  The commercial partners of UBC and VIDO, Alberta Research Council and Bioniche Life Sciences Inc., are currently producing large quantities of the vaccine for the safety and efficacy trials needed for licensing. (AnimalNet – VIDO)

>  AUSTRALIA – Australian agricultural exports to its top 12 markets increased 18% in 2000 to 21-year highs.  Agriculture Minister Warren Truss said the A$80.5 billion (US$39.6 billion) in total exports came from record high shipments to 10 of Australia’s top 12 trading partners, driven primarily by meat exports to Asia.  Exports to the Republic of Korea (total A$8,957 million) and to Singapore (total A$5,906 million) grew by a phenomenal 40% over the year. As well, exports to Thailand (total A$1,962 million) increased by 36% in 2000.  (Reuters)

Agribusiness News

>  Aventis has decided to sell off its CropSciences division and not seek an IPO.  Aventis has reportedly sent proposals on the sale of the CropSciences division to Dow, DuPont, Monsanto, Bayer and BASF.  The goal of the proposal is to arrive at a decision on the sale by June, thereby enabling Aventis to exit the business by the beginning of 2002.  Aventis has ruled out dividing up CropSciences into different parts or selling it off by product. Early in March, Aventis estimated its CropSciences division would be valued at about seven times earnings before interest, tax, depreciation and amortization (EBITDA), plus debt of about two billion euros. This move, in addition to selling off its animal feed division, will allow Aventis to concentrate on its core pharmaceutical business following a shift in strategy announced five months ago. (E-markets)

> Bayer AG is reportedly interested in buying the whole of Aventis CropSciences. This is a change in the company’s position on Aventis CropSciences after chief executive Manfred Schneider said at the annual press conference that Bayer would only be interested in separate parts of the life sciences group.  However, analysts who value the deal at roughly 6 billion euros said it would be unwise for Bayer and its major competitor BASF AG to bid for CropSciences. (Emarkets – AFX News)

Brakke Consulting Viewpoint

It appears that most animal health companies had a reasonably successful first quarter in sales and profits.  We’re hearing sales increases in the ranges of 6 to 10 percent over prior year by several companies.  We are of the opinion that 2001 will be a good year in animal health in the US.  Livestock prices are reasonably strong and should remain so for most the balance of the year.  The companion animal areas continue to grow even if it is getting a bit crowded in some product categories.

The European Market and other regions involved in the hoof and mouth disease outbreaks could have disastrous years if the epidemic continues to spread.  In the long term, we believe that pork and beef consumption could be impacted negatively by the high level of publicity related to hoof and mouth disease.  We would encourage the animal health industry and the producers to develop educational programs directed at consumers to explain that there is no danger to humans from the hoof and mouth outbreak.  We believe the publicity on hoof and mouth disease adds to the food safety issues that were already at a high pitch.

We believe that ALL the segments involved in the production of quality animal protein need to come together to weather the current and future food safety storms.  This includes producers, animal health companies, feed companies, packers, branded food companies, restaurant chains, government, etc.  Each has a stake in turning the negatives into a more positive and accurate story.  Who is going to take the lead in organizing this effort?

[Ron Brakke]
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