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Brakke Consulting’s
Animal Health News & Notes for May 19, 2000
Copyright © Brakke Consulting, Inc.
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Company Earnings Releases
> PETCO reported continued strong comparable store sales growth and gross profit margin improvement leading to record sales and net earnings for its first quarter ended April 29, 2000. Net sales for the first quarter increased 15% to a record $265.2 million from $229.7 million in the first quarter last year. Net earnings for the first quarter were $6.4 million, compared with $3.6 million in the prior year. (Business Wire)
> Virbac Corporation, the US subsidiary of Virbac SA, announced record results for the first quarter ended March 31, 2000. For the three months ended March 31, 2000, net sales were $13.4 million compared with equivalent net sales of $12.9 million for the first quarter of 1999. Net income for the three months ended March 31, 2000, was $931,000, compared with a net loss of $118,000, for the year-earlier period. (BW HealthWire)
> PetQuarters.com announced the financial results for the third quarter ending March 31, 2000. Net sales for the quarter were $3.7 million, representing an increase of $3.6 million from the third quarter of 1999. The Company’s gross margin was a positive 28% for the quarter. Net losses increased by $3.3 million from the prior year period, which in part reflect non-recurring website expenses. Net sales for the nine months ended March 31, 2000 were $9.9 million, an increase of $9.7 million over the prior year period. (PRNewswire)
> IGI, Inc. reported for the first quarter ending March 31, 2000 a net loss of $1.0 million compared to a net loss of $319,000 for the corresponding period in 1999. Total revenues for the quarter ended March 31, 2000 were $8.5 million, a decrease of $289,000 or 3%, from revenues of $8.7 million for the first quarter ended March 31, 1999. The decrease in revenues was primarily attributable to decreased Poultry Vaccine sales partially offset by increased Consumer and Companion Pet Product revenues. (PRNewswire)
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Company News Releases
> PETCO Animal Supplies, Inc. announced the signing of a definitive merger agreement with a company organized by Leonard Green & Partners, L.P. and Texas Pacific Group, designed to take the company private. Under the terms of the merger agreement, the Company’s stockholders will receive $22 per share in cash in a transaction with a total value of approximately $600 million including assumed debt. (Business Wire)
> Synbiotics Corporation announced that W3COMMERCE Inc, its Internet marketing services subsidiary, has executed an alliance agreement with Friskies Petcare Products, a unit of Nestle SA, the world’s largest food company. Under the terms of the agreement, Friskies Petcare will sponsor a series of six informational and two directory websites, designed and developed by W3COMMERCE. Friskies Petcare will also offer certain non-food products, not available through traditional sources, on two e-commerce sites developed and managed by W3COMMERCE. Terms of the agreement include e-commerce commissions and sponsorship fees to be paid by Friskies to W3COMMERCE. (Business Wire)
> Pets.com and Veterinary Pet Insurance formed a limited exclusive marketing relationship. As part of the relationship, Veterinary Pet Insurance will offer Pets.com customers a group rate discount of 10% for any pets enrolled through the Pets.com Web site beginning May 17. Pets.com will promote Veterinary Pet Insurance through various marketing efforts. In turn, Veterinary Pet Insurance will spread awareness with its clients of the broad product selection, expert information and convenient delivery available at Pets.com. (Business Wire)
> DRAXIS Health Inc. announced that Anipryl, a veterinary prescription medication licensed to Pfizer Inc., has been cleared by the New Zealand Animal Remedies Board for the treatment of uncomplicated pituitary-dependent hyperadrenocorticism (PDH or Cushing’s disease) and age associated cognitive dysfunction in dogs. New Zealand represents the fourth jurisdiction to approve Anipryl for these two indications. (Business Wire)
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Animal Health News
> Balchem Encapsulates announced they have entered a distribution agreement with NYS Co., Ltd. of Japan, one of the largest importers of agricultural products in Japan. Under the terms of the agreement, NYS Co., Balchem’s largest international reseller of REASHURE Choline, retains sole distribution rights to market the REASHURE Choline product to feed companies and farms throughout Japan. (PRNewswire)
> Thorn BioScience LLC has announced the issuance of a patent for SABERMate, a product line developed for advancing ovulation in mares and other domestic animals. The SABERMate product delivers controlled release deslorelin, a GnRH analog, which stimulates leuteinizing hormone (LH) release for advancing and timing the ovulation process. The product will economically enhance the management of ovulation and thereby effectively manage matings or inseminations close to the time of ovulation. (PRNewswire)
> Delta Air Lines announced that it will embargo the acceptance of pets as checked baggage to all destinations on its worldwide system during the months of June, July and August. Delta will continue to accept small, domesticated pets for travel in the cabin, in kennels that fit under a passenger seat. Also during this time, Delta Air Cargo will accept animal shipments only from commercial animal shippers or licensed pet breeders. (PRNewswire)
> Six leading meat packers and processors announced the creation of an on-line, business-to-business marketplace for meat and poultry products, service and information. Smithfield Foods, IBP, Cargill subsidiary Excel, Tyson Foods, Gold Kist and Farmland are, according to this story, investing $20 million into the Web site. IBP, Smithfield, Excel and Tyson will each have a 21.5% stake. Cooperatives Gold Kist and Farmland will each own 7%. According to the companies, the marketplace will be neutral Web-based exchange that will provide a single location for both buying and selling meat. The launch of the exchange is expected this summer. (Animal Net)
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Agribusiness News
> Bayer Corporation’s Agriculture Division is launching an e-commerce platform, BayerValue.com, through which the company can enhance supply chain activities between Bayer and its business-to-business customers. The web site will allow Bayer and its business-to-business customers to use the internet to communicate in a seamless manner to increase the speed and efficiency of business operations such as order placement, order tracking, inventory management and distribution. (PRNewswire)
> Monsanto Co., the wholly-owned agricultural products unit of Pharmacia & Upjohn Inc. , filed Friday to raise $100 million in an initial public offering. In an initial prospectus filed with the Securities and Exchange Commission, Monsanto did not reveal how many shares it planned to sell in the IPO, or the projected per-share price range. The St. Louis-based company plans to use the net proceeds from the IPO to repay debt assumed from Pharmacia, according to the prospectus. It has applied to list its shares on the New York Stock Exchange under the symbol “MON” once it goes public. (Reuters)
> As part of a $100 million settlement of a federal lawsuit, Cargill admitted to growing Pioneer Hi-Bred International Inc.’s seed corn in order to isolate unique genetic material for its own use. Des Moines-based Pioneer sued Cargill and two other competitors in October 1998, saying it had found Pioneer genetics in the other companies’ products. Under the settlement, Cargill has agreed to destroy the material it acquired from Pioneer, not to engage in the practice of isolating parent seed in hybrid seed corn and to resolve rights to use genetic material that was in dispute. Cargill has pulled 11 hybrid varieties from the market because of the investigation. (AP)
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Brakke Consulting Announces Completion of Veterinary Internet Usage Study
Brakke Consulting has just completed a new survey of US small animal veterinarians. The survey reveals how veterinarians are using the new internet-based tools available to them. It includes the answers to questions such as
• What percentage of veterinarians have computers?
• How many use email and the internet, and how many have clinic websites?
• Are veterinarians ordering clinic products and supplies online, and if so, who are they using for their purchases?
• To which web-based services do veterinarians subscribe?
• How will the internet usage change in the next twelve months?
• Who are the companies offering web-based services to the veterinary profession?
The study is available for immediate shipping for a cost of $9,750. To obtain more information or to order a study, please call (972) 243-4033 or email Roger Cummings at rcummings@brakkeconsulting.com. Information can also be found on the Brakke Consulting website at www.brakkeconsulting.com <https://brakkeconsulting.com>.
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Brakke Consulting Viewpoint
Much of the news this week reflects the continued forward movement in one form or another of
e-commerce in animal health and agriculture. As we reported above, we have completed a market survey of veterinary internet usage. We are very pleased with this study. The usable information in this report will assist many clients in the decision process relating to how rapidly they should move forward with their own initiatives.
We are also encouraged by the strength in the animal health market this year. The 1st quarter results of most companies was very positive and we see a strong second quarter for the same companies. The pharmaceutical company merger mania seems to have cooled a bit for now. This allows the management in the animal health divisions to get on with business, rather than speculating who they will be working for next year. A little stability would be good for all us.
[Ron Brakke]
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