Animal Health News & Notes for October 26, 2001

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Brakke Consulting’s
Animal Health News & Notes for October 26, 2001
Copyright © Brakke Consulting, Inc.
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Company Earnings Releases

>  Akzo Nobel reported that, for the third quarter 2001, revenues for its animal health division Intervet were 274 million euros ($249.3 million).   The 8% increase over the same period in 2000 was due to strong growth spurred by innovative product lines. (company press release)

>  American Home Products reported that, for the third quarter 2001, revenues for its Fort Dodge Animal Health division were $205.3 million, an increase of 12% over the third quarter of 2000.  Sales for the first nine months of 2001 were $559.6 million, a decrease of 1% from the first nine months of 2000.  The increase in the third quarter was primarily due to the June launch of ProHeart 6, a heartworm preventative with a six-month duration.  The decline in the first nine months was primarily due to a general weakening in the livestock sector globally. (company press release)

>  Schering-Plough reported that third quarter 2001 revenues for its animal health division were $169 million, a decrease of 2% from the third quarter of 2000.  For the first nine months of 2001, animal health revenues were $493 million, a decrease of 2% from the first nine months of 2000.
(company press release)

>  Eli Lilly reported that worldwide sales of animal health division Elanco in the third quarter of 2001 were $177.5 million, an increase of 8% when compared with the third quarter of 2000. Excluding the effect of exchange rates, sales grew by 12% for the quarter. (company press release)

>  Pharmacia reported that worldwide sales for its animal health division for the third quarter of 2001 were $119 million, an increase of 2% when compared with the third quarter of 2000.  Sales for the first nine months of 2001 were $344 million, an increase of 6% over the comparable period in 2000.  (company press release)

>  Heska Corporation reported financial results for its third quarter and year-to-date periods ended September 30, 2001.  Revenue in the third quarter from the Company’s proprietary pharmaceuticals, vaccines and diagnostic (PVD) products grew by 15% and revenue from sales of veterinary medical instrumentation products grew 25% over the third quarter of the prior year.  Total revenue in the third quarter of 2001, however, declined to $11.8 million from $12.7 million for the third quarter of 2000.  The decline in total revenue was due to a $2.6 million drop in sales at the Company’s Diamond Animal Health subsidiary. For the third quarter, the Company’s net loss was reduced to $3.9 million from $4.7 million in the third quarter of the prior year, representing an 18% improvement.  (PRNewswire)

>  ImmuCell Corporation announced the results of its operations for the three month period ended September 30, 2001. During the three month period ended September 30, 2001, total revenues increased by 22% to $1.4 million compared to the same period in 2000, while product sales increased by 19% to $1.3 million. The net operating loss before taxes of $80,000 compares to a net operating loss before taxes of $13,000 for the three month period ended September 30, 2000.  (Business Wire)

>  Cargill Inc. reported a 67 percent increase in earnings for the first quarter of fiscal 2002, ended Aug. 31st.  The company reported net income of $288 million on unstated sales volume for the period.  (meatingplace.com)

>  Church & Dwight reported specialty products increased by 3.3% due to growth in the animal nutrition line.  Third quarter sales for animal nutrition ended Sept. 38, 2001 at $19.9 million, a 10% increase over the same period in 2000 with sales of $18.0 million.  For the nine month period, sales were reported at $ 57.0 million, an increase of 11.8% from the same period in 2000 at $ 51.0 million. (Business Wire)

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Company News Releases

>  US  MetLife now includes Veterinary Pet Insurance as a voluntary benefit, continuing the climb of companies offering pet insurance as a benefit to their employees.  (company press release)

>  JAPAN   Osaka-based Shionogi Pharmaceuticals has announced a collaboration for development and sales of animal health products with Boehringer Ingelheim Vetmedica. Both companies have agreed to establish a joint company for animal health business in Kawanishi City, Hyogo Prefecture in Japan in April 2002.  Shionogi reported that its animal health product sales in fiscal 2000 ended March 31, 2001 was Yen 4 billion [$ 33.3 million]. Boehringer Ingelheim’s animal health product sales through local distributors was Yen 500 million [$ 4.2 million] in 2000. (Brakke Consulting Japan)

>  AUSTRALIA   Jurox announced a breakthrough in growth promotant technology for pork producers.    Jurox has an exclusive global arrangement with New Zealand company Biostore to develop and provide a once-off application of porcine somatotropin (pST).  The partners have developed a patented delivery system using modified live pST-secreting cells in microcapsules, which when placed in the pig’s ear, makes the hormone continuously available. (Agribusiness)

>  GERMANY  Vical Incorporated announced it intends to appeal the ruling by the Opposition Division of the European Patent Office revoking the company’s patent covering the nonviral delivery of genetic material.  (PRNewswire)

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Australian Animal Health Market Grows by 3%

The Australian Animal Health grew by 3% in the year to the end of June, according to the Australian Animal Health Industry Audit.  Of the 11 companies participating for more than a year, four recorded substantial growth while two showed major falls in turnover,  1% and 2% respectively. More significant growth was recorded in the musculoskeletal, nutritional and metabolism, and antibiotic markets.  (Rural Business)

Brakke Consulting provides a full range of business consulting services in Australia and the Pacific Rim.  For more information, please contact Dick Miles at mailto: rmiles@brakkeconsulting.com

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Animal Health News

>  SWITZERLAND   Three new cases of BSE have been discovered in three regions of Switzerland, raising the 2001 toll of infections to 29.  A cow in the St Gall canton was killed upon discovery of the disease. The two other cows, born after 1990, were found in Delemont, in the Jura canton and in Hochdorf, in the Lucerne region. (AnimalNet – Agence France Presse English)

>  UK   A scientific study that suggested BSE had spread to sheep has been scrapped after nearly five years because researchers were testing the wrong brains.  Scientists who thought they were testing sheep brains were actually working with tissue from cattle, according to the chairman of the Spongiform Encephalopathy Advisory Committee. The study, which began in January 1997 and cost $315,000, was supposed to involve 2,860 brains from sheep that had died of scrapie from 1990 to 1992.  Scrapie and BSE, are similar, incurable diseases, but scrapie has been found in sheep for centuries. (AP)

>  US  The American Meat Institute’s Board of Directors agreed to make food safety a non-competitive issue by sharing food-safety information freely among all AMI member companies. AMI will also develop a formal process to share and assess information developed within individual companies.  (meatingplace.com)

>  US  Colorado State officials fear that some elk that may be infected with a fatal illness were sold to private ranches in as many as 15 states and could spread the disease to the wild elk and deer throughout the nation.  The state has confirmed six cases of chronic wasting disease, the elk and deer equivalent of BSE.  (AnimalNet- NYTimes)

>  US  California recently offered $10 million in funding to help dairies convert methane gas, a byproduct of manure, into electricity. Under the state program, a dairy can recoup up to 50% of its capital investment. Increasing electricity prices have made what might sound like a joke into an all too viable alternative. In fact, after the methane is burned for energy, there is still solid manure to be used as fertilizer. (AnimalNe – Lean Trimmings)

>  US  Researchers at the University of Wisconsin Medical School’s McArdle Laboratory for Cancer Research and their collaborators at Harvard Medical School have found the receptor  that anthrax toxin binds to in order to enter cells.  The finding represents a major advance in understanding exactly how the toxin kills host cells, leading quickly to death. (AnimalNet – University Press Release)

>   EU veterinary experts have voted to ease curbs on exports of pork and beef from Britain imposed because of FMD.  The Standing Veterinary Committee, of the EU,  voted on Wednesday in favor of a European Commission proposal extending the area from where Britain is allowed to
export fresh pigmeat to all counties that have had no outbreak of FMD or have remained free of the disease for more than 3 months. (AnimalNet – Reuters)

>  CANADA launched a new agency to develop an extensive traceback system for the Quebec Province food supply, beginning with the cattle industry. Quebec¹s government has created Agri-tracabilite Quebec, an independent traceback agency. The agency is slated to start developing a cattle ID system in March 2002 for a July 1 start date, with the system extended to
the entire cattle chain by 2005. (AnimalNet – AgWeb)

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Agribusiness News

>  Syngenta reported sales for the first nine months of 2001 were $5.13 billion compared with $5.61 billion for the same period in 2000.  Sales were 5% lower with crop protection down 6% and seeds up 1%.  (PRNewswire)

>  Grain and livestock producers could see improved efficiencies and profits as a result of a strategic partnership announced today between John Deere and AgInfoLink Global Inc, a leader in the tracking of livestock and meats.  Under the agreement, the two companies will collaborate in the development of technologies for traceability systems in grains, livestock and other agricultural products.  The combined knowledge gained from experience in tracking grains and livestock will facilitate the development of more comprehensive tracking systems that will help to promote product consistency and to meet the safety and quality demands of producers and consumers. (company press release)

>  Smithfield Foods Inc. has completed the acquisition of Packerland Holdings, Inc., the fifth-largest US beef process.  The acquisition was completed on Oct. 25  (meatingplace.com)

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Brakke Consulting Viewpoint

The earnings reports for the animal health divisions for the 3rd quarter continued to be positive for most companies.  It appears that for the full year there will be a gain of 3 to 5% for the industry as a group unless dismal numbers occur before the year end.  Keep up the good work. 

During the past few days I have spent some time in the upper Midwest, South Dakota, Iowa and Minnesota.  Those associated with food animal production seem to be optimistic regarding the next few months.  The biggest concern relates to the reported drop in beef consumption.  However, prices for beef at the retail level offer some great consumer values. 

I continue to be amazed at the positive impact of genetics on crop yields.  The harvest is in full swing and yields are running high based on the lack of moisture during the growing season.  We continue to believe that animal genetics will play a bigger role in the sales of animal health products in the future. 

Also, the pheasant hunting was great in South Dakota. 

 [Ron Brakke]
 
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