The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for September 1, 2000

Copyright © Brakke Consulting, Inc.
Company Earnings Releases

> Pharmacia reported that animal health sales in the second quarter 2000 reached $108 million, an increase of 9% over the comparable period last year.  Sales of Naxcel/Excenel and Licomix/Lincospectin were key drivers in the sales increase.  Sales for the first half of 2000 were $208 million, an increase of 12% over 1999. (Animal Pharm)

> Virbac S.A. reported provisional sales of FF 1,040 million ($150 million) for the first half of 2000, an increase of 18% over the comparable period in 1999.  On a comparable basis, sales increased 14.4% over 1999.  Sales of both companion animal and livestock products helped drive growth.  (Animal Pharm, company website)

>  Boehringer Ingelheim reported sales for the first half of 2000 for the Animal Health business grew by 15% to 137 million Euro ($130 million). (company website)

>  Alpharma reported sales for the first half of 2000 for its Animal Health Division (AHD) were $114 million, up 51% over the comparable period in 1999.  Sales for the second quarter 2000 were $73 million, an increase of 107% over the comparable period in 1999.  AHD revenues increased due to acquisitions, primarily Alpharma’s acquisition of the medicated feed additive business of Roche on May 2, 2000.  Sales for the first half of 2000 for the Aquatic Animal Health Division (AAHD) were $6.0 million, an increase of 30% over the comparable period in 1999, while sales for the second quarter were $3.0 million, up 20% over 1999.  AAHD revenues increased  primarily due to the acquisition of Vetrepharm in November of 1999.  (company 10Q)

>  Dainippon reported animal health sales for the fiscal year ended 3/31/00 were ¥22.4 billion ($213 million), an increase of 7% over 1999.  Petfood sales increased by 9.7% to ¥14 billion ($133 million) and remained the company’s largest animal health sector.  Small animal pharmaceuticals rose 6% to ¥6.5 billion ($62 million), while sales of aquaculture and livestock products declined significantly by 42% and 10% respectively. (Animal Pharm)

>  Biopure Corporation announced its financial results for the third fiscal quarter ended July 29, 2000.  For the quarter, the company reported a net loss of $7.2 million, compared with a net loss of $10.3 million for the corresponding period in 1999.  The decrease in net loss reflects interest earned on the company’s increased cash balance and reduced spending for research and development compared to the corresponding quarter in 1999. Total revenues were $836,000 for the third quarter of fiscal 2000, compared with $641,000 for the corresponding period in 1999.  This increase reflects more than 30% growth in unit sales of Oxyglobin, the company’s veterinary drug for the treatment of canine anemia. (PRNewswire)

Company News Releases

>  Virbac Corporation announced that it has entered into an exclusive, 15-year licensing agreement with Pfizer Inc, granting Pfizer Animal Health Group the right to market, sell and distribute two of Virbac Corporation’s advanced equine anthelmintic products in the United States and Canada. These two drugs, for which the Company is actively pursuing regulatory approval, are used for the treatment of parasites in horses, an estimated $100 million U.S. market. One of the products, a unique formulation of two active ingredients, is proprietary to Virbac and is patented in the United States as well as other countries.  Under the terms of the transaction, Virbac will receive significant initial and milestone payments, plus royalties based on sales and gross profits for the 15-year life of the agreement. In addition, effective September 1, 2000, Virbac will receive from Pfizer the over-the-counter marketing rights for Pet Tabs, a vitamin nutritional supplement for dogs and cats. (BW HealthWire)

>  Central Garden & Pet Company announced that its T.F.H./Nylabone subsidiary has successfully launched the Fold-Away Pet Carrier.    The product has been featured on ABC’s “Good Morning America” as one of the `hottest new item’ introductions at this year’s Hardware Show in Chicago.  T.F.H./Nylabone’s pet carrier is fully loaded to fully folded in seconds. In addition, the product meets airline and USDA transportation safety standards for shipping live animals.  (Business Wire)

>  pdqVET, a provider of web site solutions for veterinarians, and VETECH Software Services, Inc., a provider of turnkey computer systems for veterinary practices, announced that they have entered into a strategic alliance aimed at introducing pdqVET web site services into VETECH’s suite of practice management products.  The alliance brings together pdqVET’s market leading veterinary-specific web packages and VETECH’s expertise in technology-enabled practice management systems to provide a comprehensive business management solution for animal hospitals, clinics and specialty services.  (company press release)

>  Bioproducts Inc. and Inghams Enterprises Pty Ltd have joined forces to form a new palatant manufacturing company, Biopalatants Pty Ltd.  Biopalatants will supply palatability systems to the pet food industry in Australia, New Zealand and the Pacific Rim. (company press release)


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Animal Health News

>  A parasitic disease rarely found in this country has killed 21 foxhounds and has sickened at least 20 others, The New York Times reported Friday. The culprit was identified this spring by researchers at North Carolina State University as a strain of leishmaniasis, typically found in warm, coastal areas like Brazil, the Mediterranean, India and the Sudan. The disease has rarely been diagnosed in the United States. (AP)

>  Brazil has identified five more foot-and-mouth outbreaks in a key ranching state and more than doubled the number of animals killed to prevent the disease from spreading. Brazil¹s most southerly state, Rio Grande do Sul, now has 10 locations with outbreaks of the disease. The slaughter of animals viewed as a potential health risk now stands at 517, comprising 442 cows, 53 pigs and 22 sheep. That is more than double the ministry’s initial kill estimate of 222 animals last week — and more culling is likely. (Reuters)

>  According to a recent study, three out of four pet owners who access the Internet are aware of online pet stores, up from 55% in September 1999.  However, only 27% had shopped at an online pet store, and only 14% made an actual purchase at an online pet store.  (Pet Age)

>  British scientists say cattle may not be the only animals that can carry the bovine spongiform encephalopathy (BSE), and seemingly healthy hogs, poultry and sheep may also harbor the deadly brain disorder. Animals, and even people, who appear healthy may be silent carriers of the disease, according a report published in Proceedings of the National Academy of Sciences. The British scientists’ research on mice and hamsters indicated that pigs, poultry and sheep could carry the sort of risk that has been associated with cows. The scientists said apparently healthy cows could also become BSE carriers.  (AgWeb)

>  Researchers at the University of Tennessee announced the birth of the first Jersey calf cloned from an adult somatic cell and reported that cloning procedures are simpler than researchers first thought.  The calf, which is named Millenium and nicknamed Millie, was born Aug. 23 and weighed 62 pounds.  While Millie is among the first three bovine clones in the U.S. originating from adult somatic cells, she is also unique. The other two clones were produced with technology similar to that which created Dolly the sheep, while Millie was produced with standard cell-culturing techniques. Researchers said this discovery shows that scientists do not have to use patented cell preparation technology to clone adult animals. (AgWeb)

>  USDA/FSIS is conducting a special project beginning next week to sample and test for phenylbutazone in selected bovine slaughter plants under federal inspection. Phenylbutazone is approved for us in dogs and horses, but is not for use in food animals.  An earlier pilot project this year by FSIS found traces less than 3% of the livestock selected for testing, sufficient cause for this special project. There is no tolerance for this drug in food-producing livestock, and they and their by-products are condemned when it is detected. (National Meat Association)

>  The government says its overburdened meat inspectors spend too much time on jobs that processors could do themselves, such as checking scales and monitoring the water content of meat products, and wants to focus more on stopping harmful bacteria.  The USDA’s FSIS, which has 7,500 inspectors, is responsible for regulating a number of consumer protection rules that officials say have little or nothing to do with food safety. The department is considering allowing inspectors to spend less time doing tests to enforce those rules.  “The government should be supervising the industry’s enforcing of these other consumer protections rather than doing the industry’s job,’’ said a meat-safety expert with the Center for Science in the Public Interest, a consumer advocacy group.  USDA plans to work on a set of formal proposals later this year to overhaul its inspectors’ responsibilities.  (AP)

>  Agricultural Research Service scientists have found that adrenomedullin (AM), a recently discovered hormone, could act as an indicator of disease stress in livestock. Increases in the hormone adrenomedullin (AM) appear to be associated with some forms of infection in cattle, goats, pigs and sheep. For example, in ARS experiments, calves that harbored internal parasites had more AM in their pancreatic tissue and blood than healthy calves. So livestock producers may be able to use a test based on higher AM levels as a screening biomarker for disease stress, indicating animals that may not be acceptable for meat processing. ARS is the chief research agency of the USDA. (ARS News Service)
Report on the Central Veterinary Conference in Kansas City

The 2000 Central Veterinary Conference attracted more than 5,100 veterinary professionals to Kansas City, MO this week. The increased attendance included more than 1,600 veterinarians, 460 technicians, and 130 practice managers. The special student program sponsored by Hill’s Pet Nutrition, Inc. registered 200 plus veterinary and technician students.  Several Brakke Consultants attended the meeting as well, including Roger Cummings, CVPM, who was a featured speaker.

The newly expanded exhibit hall featured 377 booth spaces contracted by 280 companies displaying everything from pharmaceuticals to animal-related jewelry. Program highlights included advanced seminars for technicians and practice managers; 19 wet labs providing hands-on experience in techniques such as dental radiology and extractions, endoscopy, canine/feline ultrasound, and cytology; and a technology symposium focusing on the World Wide Web.  Rear Admiral Dr. Michael Blackwell delivered the annual keynote address, sponsored by Bayer, on the importance of the people-pet bond.

Agribusiness News

>  BASF and RiceTec, Inc. have announced a global agreement for the development, production and commercialization of high performance hybrid rice for the CLEARFIELD Production System. This multi-faceted agreement will lead to the development of the first hybrid rice with tolerance to the imidazolinone herbicides of the CLEARFIELD Production System.  The herbicide tolerant traits were developed using non-GMO technology that does not involve the insertion of genetic material.  The first commercial hybrids resulting from this agreement are projected to be available in the US in 2003. (PRNewswire)

>  Novartis Seeds has confirmed it plans to work with the EPA to reregister the company’s most popular line of Bt corn hybrids. At the same time, the company says it will not pursue reregistration of the first type of Bt it brought to market in 1995. The company has been offering its customers two types of corn containing Bacillus thuringiensis. The KnockOut lines, first introduced in 1995, contain Event 176. In 1996 the company also introduced its own version of YieldGard (known as Bt11).  Novartis says that today, YieldGard/Liberty link lines account for about 75% of the company’s Bt corn sales and that the volume will steadily increase. (DirectAg)


Brakke Consulting Viewpoint

The first 6-months reports for several of the leading animal health companies were very impressive.  Congratulations to all of those firms.  It now appears that the industry average for the first 6 months will be an increase of about 7-8%.  If your company is below that I’m sure you have some good reasons why for upper management.  If you’re above the average, you should be able to brag at least until the end of the 3rd quarter.

We wish those of you in the US a pleasant and safe Labor Day Weekend.  Drive carefully and if you have too much rain in your area, please direct it towards Texas…


 [Ron Brakke]
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