The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for June 30, 2000
Copyright © Brakke Consulting, Inc.
Company Earnings Releases

>  Alcide Corporation announced net sales and earnings for its fiscal year ended May 31, 2000.   Fiscal year 2000 sales of $12.4 million were $1.2 million higher than fiscal 1999 sales.  Sales of Sanova to the poultry industry totaled $3.9 million for the 12 month period, as this new Alcide business continued to expand rapidly. The net loss of $447,000reported for fiscal 1999 included a one-time $2.3 million charge to royalty expense to settle a lawsuit with royalty rights holders. (Business Wire) 

Company News Releases

>  The Federal Trade Commission has approved the $90 billion merger between Pfizer and Warner-Lambert. The deal is expected to make the new Pfizer the largest pharmaceutical company in the world. The FTC agreed to the merger after the companies consented to divest themselves of some businesses in four areas – treatments for depression, Alzheimer’s, cancer and lice. (AP)

>  Heska Corporation sold its Center Laboratories business to Alk-Abello’ (ALK), a part of the Chr. Hansen Group, based in Denmark.  In addition, ALK has licensed certain of Heska’s intellectual property rights related to recombinant allergens for use in human allergy treatment.  The purchase price for the business together with the up-front license fee paid by ALK is approximately $6.4 million. (Company Press Release)

>  Heska Corporation announced that it has entered into an expanded $13.1 million, two-year credit facility with Wells Fargo Business Credit, an affiliate of Wells Fargo Bank. The expanded credit facility has two components:  First, two existing term loans totaling approximately $3.1 million at Heska’s Diamond Animal Health subsidiary in Des Moines, Iowa have been refinanced at a lower interest rate. The second component is a $10 million asset-based, revolving credit facility to be used principally to fund working capital needs for Heska’s growing business and for other general corporate purposes. (PRNewswire)

>  IGI, Inc. announced that IGI, Inc. and Lohmann & Co., AG, of Cuxhaven, Germany have signed a definitive asset purchase agreement for the sale of IGI’s Vineland Laboratories Division to Lohmann.  The Company previously had announced the execution of a binding Letter of Intent. The sale is subject to the approval of the shareholders of IGI, Inc. The terms of the proposed sale provide for the payment by Lohmann to IGI of $12.5 million subject to certain proposed post-closing adjustments.  Lohmann also will assume approximately $2.5 million of IGI’s liabilities. (PRNewswire)

>  An exclusive agreement has been signed whereby Essentia Water, Inc. will produce a private label water product for PETsMART.  This unique purified water product, packaged in 1.0 liter sized bottles, will be known as ’Shareables’, for me and my pal! The PETsMART ’Shareables’ lines are produced and marketed exclusively to be shared by people and their pets.  (Business Wire)

>  PETCO will soon launch its latest initiative, a “Free Food” offer for members of its PETCO Animal Lovers Save (P.A.L.S.) program, to attract new customers and enhance the prospects of keeping customers loyal.  P.A.L.S. is a database-marketing program launched b PETCO more than two years ago.  PETCO is the only major pet specialty retailer with such a customer loyalty program.  (PRNewswire)

>  Dutch Nutreco will move cautiously in expanding its animal feed and meat business in emerging markets, according to its new CEO-designate. Nutreco, one of the world’s top five feed makers and the biggest in Europe, has done extensive research on entering potentially high growth areas of Eastern Europe, Asia and Latin America, but so far has entered the markets cautiously.  Nutreco entered the Chile market for its other main business, fish farming and feed, 12 years ago and slowly grew to the point where it now employs 2,000 people there. This slow, steady approach will probably be used in other emerging markets. (Reuters) 
>, the world’s first retail buyers’ Web site designed for small business, announced that Sergeant’s will make a selection of its flea and tick products and other pet supplies available to small- and medium-sized retailers. With flea and tick season in full swing, and the high demand for pet products, retailers can now stock their shelves with these high-demand products with just the click of a mouse while saving time and money. (Business Wire)

> with has launched an Internet “Pet Portal”. is a unique “Pet Portal” that brings together the pet-loving community and the marketplace. caters to all pet lovers – from fish enthusiasts to bird, bunny, dog and cat owners — at the local level. is a content and service oriented site. (PRNewswire)

> added new content and now offers five features: Daily News Harvest™, Marketing Minute, DC Digest, Virtual Livestock Advisor™, and Voice of the Farm™.  (Company Press Release)

>  Dairy Strategies, LLC, a leading dairy consulting firm, has signed an exclusive agreement with to provide free on-line consulting services for the Virtual Dairy Expert, now on the web site. Through this partnership, dairy producers can access value-added dairy advice at their convenience and only on the site. (PRNewswire)

>, a website targeted at the compound feed industry, plans to upgrade next month to make e-commerce possible among its members.  The e-commerce facility will be structured as a bulletin board where compounders and premix makers can post the type of products they use, giving their e-mail address, and suppliers can contact them.  The site is based in Europe, with headquarters in Ireland, but has subscribers scattered throughout the world, including Latin America and Asia.  (Reuters)


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Animal Health News

>  IBP, the world’s largest meat packing company, recalled more than 200 tons of ground beef from grocery store shelves across the United States and Canada, fearing contamination by E. coli bacteria. IBP Inc. voluntarily recalled the ground beef, produced in May at its packing plants in Illinois and Alberta, from distributors and retailers in 25 states and at least five Canadian provinces after the bacteria was found in samples. The company and government inspection agencies on both sides of the border stressed no illnesses associated with the meat had been reported. (Reuters)

>  Purdue University researchers have found that ultraviolet (UV) light can be used to reduce certain pathogens, including E.coli, on the surface of pork. According to researchers, using UV light might be a good strategy for decreasing food-safety risks and enhancing the shelf life of pork.  UV light treatments could be used during pork processing, perhaps while the meat is aging in cold storage. (AnimalNet – Purdue Univ. News Service)

>  PPL Therapeutics has successfully used a technique known as gene targeting to insert new genes or alter specific parts of DNA in sheep.  It’s the first time gene targeting has been done in any mammal besides the mouse, and it promises healthier livestock. The technique could even lead to producing livestock that could be used as organ banks for humans.  Three female sheep produced last year with genetic changes are still alive.  Two of the sheep carry a human gene that makes them produce milk with a certain human protein. The third animal’s DNA contains a deliberate disruption in its natural DNA code.  It is hoped that within a few years, the work will lead to healthier sheep that are stripped of weak genes, such as one that makes them vulnerable to scrapie, the disorder linked to “mad cow” disease.  The technique could also enhance animals and make their meat or milk tastier and more nutritious for eating.  (ABC News)

>  An Irish court jailed a dairy farmer for five years after he was convicted of introducing a BSE-infected cow into his herd to qualify for special compensation payments.  The Circuit Criminal Court in the southern city of Cork imposed the sentence on farmer James Sutton after the first successful prosecution under legislation to prevent the spread in Ireland of bovine spongiform encephalopathy. (Reuters)

Agribusiness News

>  Paradigm Genetics, Inc., a functional genomics company, announced that it has successfully completed alterations or knock-outs in the genes of the rice blast fungus, Magnaporthe grisea, which significantly damages rice crops worldwide. In addition, the Company has completed alterations in 70% of the genes of the pathogen Septoria tritici, which causes serious damage in wheat. This achievement represents a significant advance in the Company’s Microbial Pathogen Program, which is focused on defining gene function for key fungal pathogens. The understanding of gene function for these pathogens may lead to improved products for crop protection. (PRNewswire)

>  Agricore and American Cyanamid Company have signed a global agreement for the development, commercialization and marketing of new, high performance, herbicide-tolerant canola varieties for the CLEARFIELD Production System. This agreement utilizes Cyanamid’s expertise in herbicide tolerant crops and weed control, and Agricore’s expertise in marketing, distribution, and managing a canola seed program.  Agricore will market the new CLEARFIELD canola varieties that are developed. (PRNewswire)

>, Inc. announced the formation of a strategic alliance with Tenkoz, Inc., a consortium of agricultural distributors, to develop an e-business platform that will serve the product supply needs of farmers and ranchers through their local retailer.  The e-business system will have two components: the first component involves the creation of an electronic infrastructure linking Tenkoz and its member companies with AgWeb’s suppliers and retail customers.  The second component is focused on the agricultural retail level and the creation of virtual ’storefronts’ connecting farm producers with their local crop inputs dealer.  (PRNewswire)

>  A California state appeals court overturned a judgment in a 1998 biotechnology license-rights trial that awarded $174.9 million to Mycogen Corp. from Monsanto Co. The appellate court also rejected a claim that Monsanto should license to Mycogen genetically engineered germ plasm – the genetic foundation for altered seeds – instead of simply the gene technology.  (Dow Jones)

>  The Department of Agriculture deemed parts of Alabama, Florida, Nebraska and New Mexico agriculture disaster areas, due to the unrelenting drought conditions that have caused farmers irreparable losses.  (ABC

Brakke Consulting Viewpoint

The weeks news seems to center around small consolidations, new financing and alliances for several companies.  The dotcom companies keep filling our mail box with press releases.  There does not appear to be much “content” related to real business in any of them.  Most of our clients report that the first six months of the year have been good.  They are on budget and ahead of 1999.  We continue to think 2000 will be a good year for the industry.  I am sure all dog and cat owners will rejoice now that they have a purified water they can share with their pets this summer. 
We wish everyone a safe and pleasant July 4th weekend.  Be careful with your firecrackers.

[Ron Brakke]
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