The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for August 4, 2000

Copyright © Brakke Consulting, Inc.
Company Earnings Releases

>  Central Garden & Pet Company announced financial results for the fiscal third quarter ended
June 24, 2000.  Net sales for the fiscal third quarter were $453.8 million compared to $529.1 million in the fiscal 1999 third quarter. Net income for the fiscal third quarter was $12.9 million compared with net income of $13.7 million in the comparable 1999 quarter.  Net sales for the first nine months of fiscal 2000 were $1.1billion compared with $1.2 billion in the comparable 1999 period. Net income for the first nine months of fiscal 2000 was $18.5 million compared with net income of $28.8 million in the comparable 1999 period. (Business Wire)

>  Virbac Corporation announced that for the three months ended June 30, 2000, income before taxes increased 71% to $841,000 on net sales of $13.8 million, compared with income before taxes of $493,000 on net sales of $14.4 million in 1999. For the six months ended June 30, 2000, income before taxes increased 381% to $1.8 million on net sales of $27.1 million. Results for the six months ended June 30, 1999, are presented on an equivalent basis as if Virbac, Inc. and Agri-Nutrition Group Limited, which were merged on March 5, 1999, were combined for the entire first half of 1999. (company press release)

>  Tyson Foods reported that, for its fiscal third quarter ended July 1, net income fell 41% to $40.5 million on sales of $1.81 billion, down 3.9% from the previous year.  The company stated that an oversupply of chickens is exerting downward pressure on price, and demand is declining as consumers express renewed interest in red meat.  Tyson has reduced chicken production by about 5% this year.  (Wall Street Journal)

Company News Releases

> BASF Aktiengesellschaft and Takeda Chemical Industries Ltd. have agreed to combine their bulk vitamins businesses. Following regulatory approvals, the combined business will have a global presence and a combined share of approximately 30% of the worldwide vitamins market. BASF’s vitamin sales were approximately Euro 500 million in 1999;  Takeda’s bulk vitamin business had global sales of Euro 240 million. The volume of the global vitamins market is estimated to be steadily growing at an annual rate of a minimum of 4% and the animal nutrition industry accounts for 60% of the vitamins market. (Business Wire)

> Merial announced it is moving its North American headquarters to the Atlanta suburbs and expand its research activities at an existing plant in nearby Athens.  The company said it is planning a total capital investment of $32 million and the creation of more than 400 new jobs in the state.  Merial already has two existing plants in Georgia, in Athens and in Gainesville. (AP)

> IDEXX Laboratories, Inc. announced the acquisition of Veterinary Pathology Services, Inc. (“VPS”). VPS, with locations in Adelaide, Brisbane and Sydney, had 1999 revenues of approximately US $5.0 million.  VPS is the second Australian veterinary laboratory acquired by IDEXX. In December 1997, IDEXX purchased Central Veterinary Diagnostic Laboratory, located in Melbourne. With VPS, IDEXX now has leading market share in veterinary reference laboratory testing in Australia. (BW HealthWire)

> Alpharma Inc. announced that the FDA has approved the combination usage of BMD and ChlorMax chlortetracycline in feed rations to control porcine proliferative enteropathy, or ileitis. According to the National Animal Health Monitoring System, up to 77 million pigs may be affected by ileitis in the US, resulting in economic losses of more than $1 billion annually.  This approval will give pork producers a new cost-effective way to fight ileitis and knock out respiratory or enteric diseases at the same time. (PRNewswire)

> Heska Corporation announced that Ralston Purina Company has introduced the first nutritional product to result from the Ralston Purina-Heska alliance. CNM brand DM-Formula is a revolutionary new diet available only through veterinarians for the nutritional management of feline diabetes mellitus. Ralston Purina, who will market this product, formally introduced it to the market place at the American Veterinary Medical Association annual meeting, which was recently held in Salt Lake City. (PRNewswire)

>  Livestock producers can now find exclusive production and productivity features at  Vance Publishing Corporation, the publisher of Drovers, Pork and Dairy Herd Management, will provide content exclusively for the Livestock Producer and Dairy Performance Centers.  Vance is the most recent agricultural leader to partner with, joining Farm Progress, Fort Dodge Animal Health and Dairy Strategies. (PRNewswire)


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Animal Health News

>  AviGenics reportedly plans to genetically engineer a chicken with an extra-large breast which will yield more meat, and then insert a DNA tag to prevent breeding of the chickens without permission. If successful, AviGenics, based on the campus of the University of Georgia, would be one of the first to put GM meat on US supermarket shelves.  (AnimalNet – The Sydney Morning Herald)

> The British government said it is branching out its “pet passports’’ to a further 15 countries that are free of rabies. Cats and dogs from rabies-free nations including Australia, New Zealand and Japan will now be able to enter Britain without quarantine. The government was committed to extending the scheme to qualifying rabies-free islands by April 2001, and has been able to do this ahead of schedule. (Reuters)

>  A drug that helps save human lives is reportedly causing the deaths of some Thoroughbreds that receive it to enhance performance.  So far, racing’s regulators have been unable to stop the medication’s abuse because there is no definitive test to detect its presence in the equine body.
Epogen (epoetin alfa) is a genetically engineered version of a protein that is produced by the kidneys and stimulates the bone marrow to produce red blood cells.  The drug has been on the
market in the U.S. since the late 1980s.  In the human sports world, Epogen is taken to increase the oxygen-carrying capacity of blood by competitors in sports such as cycling, cross-country skiing, long-distance running, and swimming. The practice is known as “blood doping.”  (AnimalNet – The Blood-Horse)

> The World Trade Organization ruled in favor of the United States and other beef exporting nations Monday when it ruled that Korea’s beef importing rules are unfair trade barriers.
Yesterday, U.S. Trade Representative Charlene Barshefsky said the new WTO ruling “will greatly enhance market access for U.S. beef later this year as Korea’s beef quota is scheduled to expire on Dec. 31, 2000.”  Korea is the third most important export market for U.S. cattle producers. (DirectAg)

>  The Federal Court of Canada has ruled that Harvard University will be able to patent a genetically-modified mouse in Canada, overruling a previous court decision. The Federal Court¹s new ruling marks the first time Canada has allowed a mammal to be patented. Harvard¹s “oncomouse” is designed to be prone to developing cancer so it can be used in research. Harvard succeeded to patent the transgenic rodent in the U.S. in 1998. It was granted a corresponding patent in Europe but the case faced opposition and a final decision has yet to be made. (AnimalNet – CBC News)

>  Dutch doctors have reported that four babies with a previously incurable, fatal muscle disorder known as Pompe’s disease have been successfully treated with an enzyme derived from the milk of rabbits injected with a human gene. The rare inherited disorder usually kills its victims within the first year of life.  Dutch biopharmaceuticals firm Pharming Group has developed an enzyme, recombinant human alpha-glucosidase, taken from the milk of transgenic rabbits injected with a human gene. Children with the disease have a deficiency of the enzyme. The company specializes in research on transgenic animals. Pharming has formed a joint venture with the U.S. company Genzyme Corp to market the drug. A launch is planned for mid-2001. (Reuters)

> A consortium of dairy-industry heavyweights such as Kraft Foods and Suiza Foods Corp. plans to form a business-to-business Web site called The companies plan to use the site, slated to begin operating early next year, to order raw milk and to sell products such as cream and cheese. (AnimalNet – The Wall Street Journal)

Agribusiness News

>  State Health officials in Sao Paolo, Brazil have ordered nine foods containing genetically modified ingredients off store shelves until their labels specify that content.  The State’s Health Monitoring Center said it was acting in compliance with a state law that requires all ingredients be listed on a product label.  Brazil is in the midst of a heated debate over foods containing genetically modified organisms should be produced.  (Emarkets – Agence France-Presse)


Brakke Consulting Viewpoint

This week the Executive Summary of the Brakke Management and Behavior Study was published in the Journal of the American Veterinary Medical Association.  The study documents the financial and management behaviors of companion animal veterinarians, and their impact on practitioner income.  The research was conducted on behalf of the American Veterinary Medical Association, and sponsored by Bayer Animal Health.

The study was a significant project for our firm, taking over 18 months to complete.  We want to thank the many individuals who assisted us during the project, especially the AVMA staff.

This new study, along with the KPMG Megastudy (The Current and Future Market for veterinarians and Veterinary Medical Services in the US) published last year, provided the National Commission on Veterinary  Economic Issues with a solid foundation of data on which to build programs that will raise the overall income level of veterinarians profession.  It is in the best interests of all of us in the animal health industry to support efforts of NCVEI and other organizations in improving the financial health of the veterinary profession.

If you would like a reprint of the Executive Summary of the Brakke Management and Behavior Study, please contact Roger Cummings at

 [Ron Brakke]
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