The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for March 16, 2001

Copyright © Brakke Consulting, Inc.
Company News Releases

>  LION bioscience AG announced that Intervet has extended its collaboration with LION for its bioinformatics solutions. The contract consists of extended licenses for the data integration technology SRS and the automated gene and genome annotation system bioSCOUT, as well as for new licenses to LION’s novel genome comparison software genomeSCOUT and SRS everEST, a soon-to-be-launched product for EST clustering. (PRNewswire)

>  Bayer announced that it is distributing Kiltix Topical Tick Control for Dogs, free to veterinarians to distribute to dog owners who purchase Advantage.  Bayer recommends that the product be administered once a month to control ticks.  The product should not be used on cats. (Veterinary Practice News)

>  Dr. Brendan Fox, president of Elanco, announced his retirement effective March 31, 2001. Dr.  Fox’s career with Elanco spanned over 20 years, and included a variety of assignments in sales and marketing management, both in the US and overseas. Dr. Fox was appointed president of Elanco in 1990.  Pat James has been announced as Dr. Fox’s successor.  (Feedstuffs)

>  Tyson issued the following statement regarding IBP: We are pleased that IBP continues to make progress resolving its outstanding issues with the Securities and Exchange Commission.  However, the non-cash impairment charge has not been settled, and IBP has not filed their 2000 10-K.  In addition, while we are disappointed with the revised expectations for first quarter, we are encouraged that IBP’s management has confidence in future results.  We are continuing with our due diligence and are closely monitoring all factors related to IBP’s business.  It is still too early to determine what effect these issues will have on the transaction structure. (PRNewswire)

>  Europeans’ leeriness of beef during a mad-cow disease scare is hurting McDonald’s sales more than expected. The company scaled back its profit outlook for the first quarter and the year, sending its stock spinning to a three-year low of $26.29 a share before it recovered somewhat. Company officials said sales were off significantly in January and February in Germany, Italy, Spain, Portugal and Greece. Europe accounts for nearly a quarter of all McDonald’s sales. (AP)

>  The FDA is amending the animal drug regulations to reflect approval of an abbreviated new animal drug application (ANADA) filed by Blue Ridge Pharmaceuticals for Wormexx, a flavored pyrantel pamoate tablets.  The tablets are indicated for the removal of large roundworms (ascarids) (Toxocara canis; Toxascaris leonina) and hookworms (Ancylostoma caninum; Uncinaria stenocephala) in dogs and puppies, and to prevent reinfection of Toxocara canis in puppies and adult dogs and in lactating bitches after whelping. (CVM website)

>  The FDA is amending the animal drug regulations to reflect approval of a supplemental new animal drug application (NADA) filed by Phoenix Scientific, Inc. The supplemental NADA provides for oral use of a 200-milligram strength phenylbutazone tablet for relief of inflammatory conditions associated with the musculoskeletal system in dogs and horses. (AnimalNet – Federal Register)

>  Veterinary Product Laboratories will introduce an obesity management formulation supplement this year, based on the three-month preliminary study results of the compound 7-KETO.  The compound’s safety has been confirmed, and VPL has begun clinical trials.  VPL licensed the patent rights to 7-KETO from Humanetics Corp in May 2000. (Veterinary Practice News)

>  Heska announced the recent issuance of a patent covering its equine influenza vaccine, Flu Avert IN.  The vaccine, introduced in November 1999 after obtaining regulatory approval, has proven to be safe and effective in protecting horses from the most common strains of equine influenza.  (company press release)

>  Alltech announced that the company is expanding its offices, laboratories and production plants in the US and Ireland to keep up with continuing increases in demand for its biotech-derived livestock feed additives.  (Poultry Times)

>  VetConnect Systems expects to shortly release a new software module designed for veterinary practices that offer boarding and grooming services.  The module, designed for the Cornerstone practice management systems, can also run as a standalone application.  The new software handles bookings and personalized care needs, and links to the patient record.  It can also generate reports.  The software may also be launched in the kennel industry in the second quarter of 2001.  (Veterinary Practice News)

>  ProdiGene, Inc. announced that it has completed additional financing of over $9 million through the private placement of preferred stock.  StaufferSeeds, Inc., a partner providing seed and grain production for ProdiGene’s recombinant proteins, led the financing round. The funding from the financing will be used to further develop and commercialize recombinant proteins produced from the company’s technology platform, which involves transgenic plants. (PRNewswire)

>  Pheromone Sciences Corp. announced that it has engaged the Ontario Veterinary College to carry out experiments into veterinary applications for its PSC Fertility Monitor. The program will investigate the potential for expanding Pheromone’s Fertility Monitor platform technology to new applications such as the prediction of estrus and ovulation of animals. Initial research will focus on large animals in a farm breeding situation. The ability to provide accurate monitoring of the fertility status of commercial livestock would afford a significant commercial opportunity for both the agricultural community and Pheromone Sciences Corp. (PRNewswire)

>  Medical Management Inc. (MMI) launched BluePaw, a preferred provider organization (PPO) pet health insurance plan, in Oregon.  BluePaw will evaluate its pilot program in six months, then branch out to other large pet-population states such as Texas, Ohio and California.  According to the company, the veterinarian will accept a co-payment from the client, and be reimbursed from BluePaw within five days.  The company adds that both preferred and out-of-network providers can submit claims and receive payments, and there is no fee to the veterinarian for being a BluePaw provider. (Veterinary Practice News)

>  LabelClick, Inc. announced it has expanded its product line to include a new line of private labeled products for the veterinarian industry. Veterinary clinics can now order small animal, large animal, and equine supplements with their own veterinary clinic brand on the label.  These private-label products are available in smaller quantities, which ideally suits the buying power and storage capacity of veterinary clinics.  LabelClick, a provider of dynamic private labeling solutions that allows pharmacies, chiropractors, veterinarians, health food stores, mail order companies, and exercise and fitness centers to customize private-label vitamins and nutritional supplements, is a wholly owned subsidiary of Vertical Health Solutions, Inc. (Business Wire)


         Mergers, Acquisitions & Divestitures

  >  Are you interested in growing your business by purchasing another company, product line or technology?

  >  Have you been thinking about selling your company, product line or technology?

  >  Have you considered merging your company with another firm to improve shareholder value?

In 2000, Brakke Consulting handled a dozen projects related to acquisitions or divestitures.  We were the sales Agent of Record for the December sale of Megan Health to Avant Immunotherapeutics.  We assisted with valuations and due diligence on three confidential transactions, and provided executive counsel on several other potential transactions.

Brakke Consulting has the experience, insight, abilities, and contacts that provide our clients with the highest quality services in the animal health, pet, veterinary, and specialty chemicals markets.  Please contact any of our offices for a confidential consultation on our range of services.  Contact information for all offices are available on our website at
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Animal Health News

>  Britain started killing tens of thousands of healthy sheep, goats and pigs in a macabre final effort to end a foot-and-mouth outbreak threatening livestock and farming around the world. The head of Britain’s farmers predicted the slaughter could lead to the death of one million animals in a mass cull expected to last several weeks. Under UK government plans, all sheep, goats and pigs within three km (two miles) of highly infected areas will be killed. (Reuters)

>  France announced its first case of foot-and-mouth disease, confirming suspicions that the highly contagious livestock disease had spread from Britain to continental Europe. Officials immediately set up a 1.5-mile security parameter, limiting access to the farm in the Mayenne region, and a further “surveillance parameter” of 6 miles. The origin of the afflicted cows in France was not immediately clear. The ministry said they belonged to a farm that is near one that imported British sheep in February. The ministry said tests had confirmed the cases in the cows from a herd of 114 cattle on the farm. All 114 cows were destroyed and their carcasses were to be incinerated. (AP)

>  The USDA announced that it is temporarily prohibiting the importation of animals and animal products from the European Union (EU) into the United States. This temporary action is being taken following confirmation of foot-and-mouth disease in France. On February 21, USDA announced similar actions regarding the United Kingdom and Northern Ireland. The Department says these measures are part of a coordinated prevention program to ensure the disease does not spread into the United States. The United States has been free of FMD since 1929. (DirectAg)

>  Argentina’s Farming and Food Health Agency (SENASA)  confirmed the existence of foot-and-mouth disease in a central province and further outbreaks are suspected. The confirmation ended weeks of government denials that the world’s No. 5 beef exporter has been infected with the virus amid mounting farmer and industry complaints that cattle were suffering from the ailment. (AnimalNet – Reuters)

>  European Union veterinary experts agreed to ban imports of livestock and dairy products from Argentina, following reports of foot and mouth disease there. EU officials said the ban would take effect after approval by the European Commission, which is expected in the next few days. The United States, Canada and Chile have already introduced similar bans. Earlier, the EU panel recommended a ban on the export of livestock from France, where the first confirmed cases of foot-and-mouth disease were confirmed on the continent following an outbreak last month in Britain. (AP)

>   According to Britain’s chief veterinarian, some farmers and others are not adhering to tight restrictions aimed at stopping the spread of foot-and-mouth disease, imperiling the nationwide drive to bring the epidemic under control.  Nine new outbreaks of the highly contagious livestock ailment were confirmed Monday, bringing the total number of cases to 173. Movement by people in the countryside has been discouraged, and those who travel to rural areas are being asked to walk through troughs of disinfectant. Even so, the chief veterinarian said there was anecdotal evidence that people have gone from one farm to another without taking necessary precautions. (AP)

>  In a move to keep mad cow disease out of the United States, McDonald’s Corp. has ordered its beef suppliers to ensure that that the cattle they buy were fed in accordance with federal restrictions. The fast-food giant has given meatpackers until April 1 to document compliance with the rules. The FDA reported recently that hundreds of feed makers had failed to comply with its feed regulations, which are intended to keep BSE from spreading if it ever reaches this country. McDonald’s plans to audit its suppliers’ documentation.  The McDonald’s action has had a ripple effect through the beef industry.  Major beefpackers, including IBP Inc., have told their cattle suppliers they must document their compliance with the feed rules. (AP)

>  The group that collects $50 million a year in dues from the nation’s hog producers for promotion and research has begun separating from the farmers’ policy-making body as part of a deal with the USDA. The National Pork Producers Council, which sets policy for 85,000 hog producer members, and the National Pork Board, which collects checkoff money from those producers, have worked side-by-side and shared staff for many years in the Des Moines headquarters. Their separation was part of a settlement reached with the USDA late in February after the NPPC went to court in January to prevent the USDA from suspending the checkoff. Then-Agriculture Secretary Dan Glickman had ordered the checkoff terminated after pork producers narrowly voted against it. (Reuters)

>  A prolonged cold spell in December and January left Florida fish farmers with losses that could exceed $10 million in the $50 million-a-year industry. Gov. Jeb Bush has asked the USDA to declare the industry a disaster and allow farmers to qualify for federal financial assistance. There is no crop insurance for fish farmers. (AP)

> According to the Veterinary Infectious Disease Organization (VIDO) at the University of Saskatchewan, a new vaccine to combat the streptococcal form of bovine mastitis has passed the proof-of-concept phase, taking it one step closer to producers. In four separate vaccine trials, vaccinated dairy cattle demonstrated significant resistance to streptococcal infection. (AnimalNet – VIDO)

>  Accelerated Genetics and Colorado State University are collaborating on a sexed-semen research trial that may help beef and dairy producers choose the sex of their cows’ offspring.  The goal is to predetermine the sex of calves from specific matings and promote faster genetic gain within herds.  Research results are expected to be released this summer, according to Accelerated Genetics. (AgWeb)

>  Genometrix Inc. has been selected by AniGenics, Inc. to genotype cattle for single nucleotide polymorphisms (SNPs) associated with parentage confirmation, improved productivity and meat quality. The resulting data will be used to help beef producers breed livestock of consistently high market quality with improved characteristics. (AnimalNet)

>  A new hypodermic needle especially designed for the livestock industry will become commercially available in June.  The new hypodermic needle, which was developed by Winnipeg based Process Detectable Needles Inc., is made of a special alloy that’s more flexible and
less prone to breakage than conventional needles and it’s virtually 100% detectable at the packing plant if it does break.  The product will be distributed through Schering-Plough Animal Health, who has the North American distribution rights, and it will be available in June of 2001.  (AnimalNet – Farmscape)

>  A unique breed of chicken that is claimed to be both tastier and meatier will soon be available on Hong Kong menus. The hybrid bird is the result of a HK$10 million (US$1.3 million) government-funded research project carried out by local zoologists after local poultry farmers complained that their chickens were getting too bland.  Now, after five long years, the research team has come up with a new hybrid bird — the “Kadoorie Yummy Chicken.”  They are expected to sell for around HK$80 (US$10), comparable to the price of top quality chickens already on the market. (Reuters)

Agribusiness News

>  The annual survey of farms by the USDA indicates that the number of farms and ranches in the United States dropped by 0.9% in 2000 to 2.17 million, the smallest number in the 90 years that the USDA has records available.  Just 25 years ago, the number of farms was double what it is now.  The average size of farms inched up by two acres to 434 acres in 2000. That compares to 213 acres in 1950, the first year that the statistic is available. Any operation that sells at least $1,000 worth of agriculture goods in a year is classified as a farm. (Emarkets – Knight Ridder/Tribune)

Report on the American Animal Hospital Association meeting in San Antonio

The American Animal Hospital Association held their 68th annual meeting in San Antonio this past week.  There were over 250 clinical presentations, 150 exhibitors, plus education tracks for technicians and practice managers.  Dr. John Albers presented a very informative overview of the current state of the veterinary profession during the General Session.  Everyone enjoyed the humor and insight of Dr. Terry Paulson during the Lacroix/Pollock lecture.  The 2002 annual meeting will be held in Boston, Massachusetts. 

[Roger Cummings]
Brakke Consulting Viewpoint

I’m currently in Thailand after a few days in Indonesia.  These are some very interesting and developing animal health markets.  The long term future here appears reasonably bright.  We managed to avoid the demonstrations in Jakarta. I’ll be spending another 14 days in the region so I’d hope to provide more insights later.

[Ron Brakke]

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