The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for March 30, 2001

Copyright © Brakke Consulting, Inc.
Company Earnings Releases

>  Neogen Corporation announced a 37% increase in quarterly revenues, and earnings that met
analyst expectations.  Neogen reported earnings of $0.12 per share for the third quarter, which ended Feb. 28, as compared with $0.11 for the same period last year.  Third quarter revenues were $8.6 million in fiscal year 2001 compared to $6.3 million in FY 2000. Year-to-date revenues were $25.7 million, a 51% increase over the prior year comparable revenues of $17.0 million. The Company’s Animal Safety Division saw a 34% increase in revenues for the third quarter, and
stood at a 50% increase on a year-to-date comparison.  Year to date, Neogen’s FY 2001 earnings were $0.39 per share, as compared to $0.30 for the first nine months of last year. In its third quarter, Neogen continued its strong improvement in income from operations, increasing 29% on a quarter-to-quarter comparison with the previous fiscal year.  Year to date, Neogen’s operating income was $2.9 million, a 74% increase from the prior year’s $1.7 million at the end of the third quarter. (PRNewswire)

>  IGI Inc. reported a net loss of $11.4 million for the year ended December 31, 2000, compared to a net loss of $1.6 million in 1999.  The 2000 loss includes a loss from discontinued operations and tax expense resulting from an increase in the Company’s deferred tax valuation allowance.  Revenues for the year were $16.8 million, a decrease of 10% over 1999.  The Company sold the assets of its Vineland Poultry division on September 15, 2000.  (PRNewswire)

Company News Releases

>  Tyson Foods has discontinued its $3.2 billion agreement to acquire IBP Inc. In a letter to IBP detailing the end of the purchase, corporate attorneys called attention to issues raised by the Securities and Exchange Commission, including misstatements in IBP’s earnings. However, it was those bad earnings statements that Tyson’s attorneys say company officers used in valuing the meat packer. And attorneys note that “delays and restatements resulting from these matters have created numerous breaches by IBP of representations, warranties, covenants and agreements contained in the Merger Agreement which cannot be cured.” Tyson is firing up legal action against IBP in Arkansas to get relief. (DirectAg)

>  The USDA approved Idexx’s new, in-clinic Canine SNAP 3Dx test, which tests dogs for three important vector-borne infectious diseases — Lyme, heartworm and Ehrlichia canis (E. Canis).  The SNAP 3Dx test is the only triple diagnostic test in animal health that has the capability to detect Lyme and E. Canis antibodies as well as heartworm antigen within eight minutes — quick enough for dog owners to wait in-clinic for the results.  This test is also the only Lyme diagnostic that can distinguish infected dogs from those that have received any of the currently available Lyme vaccinations. (PRNewswire)

>  Ralston Purina has changed the name of its veterinary therapeutic diet line from Clinical Nutrition Management to Purina Veterinary Diets.  Individual products have also been renamed.  The intended use of each diet is now spelled out on the package, eliminating the need for pet owners to remember product codes.  (Animal Pharm)

>  The Wake County Superior Court in Raleigh, North Carolina, has dismissed two lawsuits brought by a group of environmentalists against Smithfield Foods, Inc., and its North Carolina hog production subsidiaries. The judge stated that the Waterkeepers Alliance, a New York-based organization headed by Robert F. Kennedy, Jr., along other environmental activist groups, “lacked standing to sue Smithfield” and that alleged riparian landowners had failed “to state a single claim” against Smithfield.  (AgWeb)

>  CytRx Corp entered into a license agreement with Ivy Animal Health, providing Ivy a worldwide exclusive license to CyRx’s investigational agent CRL-8761, a non-antibiotic feed additive that enhances growth performance in monogastric food animal such as poultry and pigs.  As part of the license, CytRx will receive a nominal up-front payment, a milestone fee upon US regulatory approval, and a royalty fee equal to 5% of net sales. (AgriMarketing)

>  Heska Corporation announced the introduction of its new SPOTCHEM EZ clinical
biochemistry analyzer. The SPOTCHEM EZ is a compact desktop system used to measure all common blood chemistry components and offers 19 different biochemical tests that are vital
to veterinary medical diagnosis.  Other features include a built-in sample processing centrifuge, a test menu ranging from 1 to 9 tests in a single patient cycle and the ability to perform over 60 tests per hour.  The SPOTCHEM EZ is being manufactured for Heska by ARKRAY, Inc. of Kyoto, Japan, which has a 40-year history of success in the global human and veterinary diagnostic products business. (PRNewswire)

>  Central Garden & Pet Company announced that it’s All-Glass Aquarium subsidiary has received the Pet Industry Distributors Association’s (PIDA) annual “Best New Product Award” in the aquarium category for its MINI-BOW 7 aquarium.  (Business Wire)

>  Nutreco Holding NV of the Netherlands and USA-based DCV Inc. reached an agreement for Nutreco to acquire the premix activities of DuCoa, the #3 independent premix company in the US.  DuCoa is also a leading company in innovative feed additives based on patented technologies.  The acquisition is expected to be completed in the first quarter of 2001.  (Feed Management)

>  ImmuCell Corporation announced that it has received a two year grant award aggregating up to $400,000 from the Maine Technology Institute to augment the Company’s development of its Nisin-based mastitis treatment, Mast Out. This award funds significant portions of the costs related to conducting the clinical trials and developing the proprietary manufacturing process required to obtain FDA approval of the product. The Maine Technology Institute is a
non-profit corporation created by the Legislature of the State of Maine. The grant award carries a contingent pay back obligation of up to $800,000 (up to two times the award amount), which could be paid as a 2% royalty on product sales. (Business Wire)

>  BMI Group acquired a 7,600-sow operation in North Carolina from Tyson Foods.  Terms were not disclosed.  The divestiture of the North Carolina operation consolidates Tyson’s sow herd at 102,000 head in Arkansas and Oklahoma. (Feedstuffs)

>  Foster Farms and Zacky Farms announced that they have entered into a definitive agreement for Foster Farms to acquire the chicken operations of Zacky Farms for an undisclosed amount.  Zacky Farms’ fully integrated turkey operations and its deli and further processed meat operations will remain under ownership and management of the Zacky family. The transaction is expected to close mid-2001, subject to regulatory approval.  Foster Farms, with more than $1 billion in annual revenues, is the largest poultry producer in the Western United States.  (PRNewswire)

> KINO, the parent company of Innotek, announced the acquisition of Invisible Fence Company.  Financial terms were not disclosed.  Innotek is a manufacturer of high-tech behavior solutions for companion pets and sporting dogs.  Company executives expect the union to provide a synergy in new product development, as well as promoting market expansion for both product lines.  (Pet Business)

    2001 US Animal Health Manufacturers Directories are now available

2001 U.S. Animal Health Manufacturers Directories being shipped next week!  If you have already ordered this directory we expect to receive them from the printer and have them in the mail to you 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

>  More than 2,417 cases of foot-and-mouth disease have been detected in Saudi Arabia, the biggest importer of cattle in the Gulf region. The cases were discovered in 46 infected sites in different parts of Saudi Arabia. The kingdom and neighboring the United Arab Emirates are the only Gulf Arab states to report the disease. (Reuters)

>  Two piglets are suspected of having contracted foot-and-mouth disease at a German pig farm on the Dutch border.  The animals were imported before February 1 from the Netherlands, where 10 cases of the debilitating disease have been reported after Britain was swept by an epidemic. A local government spokesman said that vets have not been able to diagnose the disease with certainty, but they could not rule out that the piglets had caught it. (Reuters)

>  The USDA has developed a new diagnostic test for foot-and-mouth disease that can determine the presence of FMD in 40 minutes instead of the current period of 40 hours. Experts say that quick detection is crucial to prevent spreading of the disease.  The ARS will be testing the new procedure this week in Britain.  Details regarding the actual procedure will be disclosed once it is determined if the test is accurate and can be used in the event that FMD enters the US.  (AgWeb)

> Britain won European Union permission to vaccinate up to 180,000 cattle against foot-and-mouth disease in an effort to contain the epidemic. British Agriculture Minister Nick Brown has said Britain has not yet decided whether to vaccinate – seen as a last resort. But the government wants to have the option because of the scale of the livestock disease outbreak, which has now infected over 700 farms. EU officials said vaccination would be limited to the hardest hit English counties.  Britain was ready if it decided to go ahead with vaccinations, with 500,000 shots lined up and access to 5 million more. The European Commission must still formally approve the measure before vaccinations in Britain can go forward, but that is regarded as a formality. (AP)

>  According to economists in a Reuters survey, ripple effects from Britain’s farming crisis, particularly on tourism, could reduce economic growth by more than a quarter percentage point this year. Foot-and-mouth disease, which has restricted access to large parts of the countryside, will reduce gross domestic product growth by 0.3 percentage points in 2001. (Reuters)

>  Zoos and wildlife parks terrified by the unyielding march of foot-and-mouth disease petitioned the European Union for permission to vaccinate to protect their rhinos, antelopes and giraffes.  The European Union fears that even a limited vaccination program could cause member states to lose their disease-free trade status on world livestock markets because inoculated animals bear the same foot-and-mouth antibodies as infected animals. Veterinary experts from the 15-nation bloc said Tuesday they were seeking the advice of international trade bodies after several European zoos requested vaccines. (AP)

>  The second of two Wisconsin flocks of sheep with scrapie has been destroyed, leaving the state with no known cases of scrapie.  Wisconsin has found about one case of scrapie a year since 1989, and all those flocks have been destroyed, he said. State records do not go back beyond that year. (AnimalNet – Knight-Ridder Tribune)

> The EU Food Safety Commissioner said it might be necessary to tag every farm animal in Europe in order to prevent a repeat of the foot-and-mouth crisis.  Tagging would enable routes of infection to be swiftly identified and would prevent illicit movements of animals, which are suspected to have contributed to the speed of foot-and-mouth’s spread. (AnimalNet –

>  The USDA has been monitoring 28 imported European cattle belonging to owners in Minnesota, Texas, Vermont and Illinois, and the agency has reported that the animals show no sign of mad cow disease. The animals have been quarantined since at least 1996 because they were imported before the US imposed import bans to control the spread of bovine spongiform encephalopathy (BSE). Veterinarians examine the animals several times a year for any sign of the deadly disease. Officials with USDA’s Animal and Plant Health Inspection Service say the animals have never shown any signs of being infected with foreign animal diseases. Nevertheless, livestock futures fell sharply based on news that USDA was monitoring some cattle for signs of BSE. (AgWeb)

>  Four years after the debut of Dolly the sheep, cloned animals are a laboratory curiosity no longer. They are moving, slowly but surely, on to the American farmstead. One cloning company has returned at least a half-dozen cloned animals to American farms this year. At least two American companies are actively marketing cloning services to farmers and ranchers. For the moment cloning remains expensive, as much as $50,000 per animal when all costs are figured in,  but costs are falling. The development of commercialized cloning has been discussed at the FDA and the USDA, and the companies involved are keeping those agencies apprised. So far neither agency has seen grounds to intervene. (AnimalNet – Washington Post)

>  According to the April issue of Mayo Clinic Women’s HealthSource, research over the past 20 years has revealed a number of health benefits derived from animal companions. For example:
Older people with pets were more active and less likely to be depressed than their peers without pets. Pet owners with AIDS were less likely to be depressed than those without pets. Stockbrokers with high blood pressure who adopted a pet were better able to control their high blood pressure than stockbrokers without pets. People with pets have been shown to have lower cholesterol and blood pressure, reducing the risk of heart disease. Pets aren’t for everyone, but if you are considering the addition of a pet to your household, pick one that fits your preferences and lifestyle. It doesn’t have to be a cat or dog. One large research study showed that birds
and fish can offer the same type of health benefits. (AnimalNet – Mayo Clinic)

Agribusiness News

>  Monsanto Company and Aventis CropScience announced a series of agreements to settle two pending lawsuits and to avoid patent roadblocks to the development and commercialization of genetically improved cotton varieties. Specific financial details of these agreements were not disclosed. The legal actions and the agreements involve intellectual property issues regarding cotton transformation and stacking of multiple insect-protection traits in plants. (E-markets – PRNewswire)

>  The Italian Farm Minister, a member of the Greens who is staunchly opposed to GM foods, has asked authorities to suspend the seed import license of Monsanto after the U.S. biotech group imported seeds he said contained suspected genetically modified (GM) material. Italian police have been asked to seize some 300 tonnes of soybean seeds suspected of containing GM material which Monsanto has already distributed to retailers. A Monsanto spokesman said the soybean seeds were conventional and had been distributed to clients after the company received all the necessary authorizations.  The use of GM seeds in open fields is forbidden by law in Italy. (Reuters)

Brakke Consulting Viewpoint
Ron Brakke is en route back to the US from his trip to Asia.  Ron’s comments will return in next week’s newsletter.

[Ron Brakke]
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