The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for January 12, 2001

Copyright © Brakke Consulting, Inc.
Company Earnings Releases

> Neogen Corporation announced second quarter revenues jumped to $9.0 million, a 66% increase from last year’s second quarter.  The quarter marked the first time the Company has exceeded the $9 million mark.  Year-to-date revenues stand at $17.1 million, a 59% increase over the prior year comparable revenues.  Neogen’s quarterly revenue increase was led by its Animal Safety Division, with a jump of 83% from the previous fiscal year.  Of the Animal Safety increase, 28% can be attributed to the sales of comparable products from year to year, and the remainder to second-quarter sales of the recently acquired AmVet and Squire product lines.  Year to date, Animal Safety sales are up 61%.  (PRNewswire)

Company News Releases

>  As of January 4, the vitamins businesses of BASF and Takeda will be combined after approval by antitrust authorities in most countries.  The combined business, owned by BASF, will have a global presence and a share of approximately 30% of the worldwide vitamins market.  In Japan, the business will be organized as a joint venture for the sales and distribution of bulk vitamins, with BASF holding 66% and Takeda 34%.  Outside Japan the combined product range will be the sole responsibility of BASF. (Feedstuffs)

> The FDA announced approval of an abbreviated new animal drug application (ANADA) for Farnam’s Continuex.  Continuex, with the active ingredient pyrantel tartrate, is a generic copy of Pfizer’s Strongid 48 and is for use in horses to prevent and control internal parasites. (FDA Veterinarian)

>  The FDA announced approval of an abbreviated new animal drug application (ANADA) for Phoenix Scientific’s Phonectin.  Phonectin, with the active ingredient ivermectin paste, is a generic copy of Merial’s Eqvalan paste and is for use in horses to treat and control gastrointestinal parasites. (FDA Veterinarian)

>  The Hartz Mountain Corporation announced that it has been acquired by a fund managed by J.W. Childs Associates, L.P., a private equity investment firm, and Hartz’ management team.  The closing of the transaction ends the Stern family’s 76 years of ownership and management of the pet supply business.  Hartz had recently completed its conversion from a distribution-based company with direct-to-store delivery capabilities to a low cost marketer, developer and manufacturer of pet supplies for dogs, cats, pet birds, small animals and fish.  The acquisition by J. W. Childs will allow Hartz to pursue its current pet strategy and provide a capital base for expansion.  The company’s management team and staff will remain intact. (PRNewswire)

>  Veterinary Products Laboratories (VPL) announced encouraging data from a three-month study intended to evaluate the safety of 7-oxo-DHEA, trademarked as 7-Keto, for weight loss and hyperlipidemia applications in veterinary species.  VPL will be introducing an obesity management formulation in 2001 based on this preliminary study and other studies in performance.  Human and lab animal studies using the compound have demonstrated significant results for weight management and weight loss, memory function and immune augmentation.   VPL announced in May of last year that it had licensed patent rights to 7-Keto from Humanetics Corporation.  (company press release)

>  Alcide Corporation announced an agreement with Universal Marketing Services, Incorporated (UMS), to acquire UMS’ inventory and certain intangible assets effective February 1, 2001. UMS is the largest customer for the Alcide animal health product line and has acted as a master distributor for Alcide’s udder care products, selling through local distributors in a number of international and U.S. market areas. The Company’s sales to UMS amount to roughly 45% of Alcide’s total udder care sales. The acquisition terms call for a cash payment for inventory value on February 1st, plus $440,000 cash and 7,000 three-year warrants to purchase Alcide
common stock. (Business Wire)

> Lohmann Animal Health International has nearly completed a $4.5 million expansion of the production facility at Maine Biological Laboratories (MBL). Part of the 24,000 square foot addition enables the company to increase batch sizes to 10,000 bottles, which means they’ll have the potential to manufacture nearly five times the quantity produced in 2000. (company press release)

>  The European Commission recently announced that PIC, a swine genetics and ag-biotech company, has been successful in obtaining its fourth EC project grant. The project, called “PathoCHIP” includes PIC, Intervet and the Spanish National Institute for Food Research (INIA) at the Animal Health Research Center (CISA, Centro de Investigacion en Salud Animal). The research partnership will use innovative, cutting-edge technology and bioinformatics to better understand genetic regulation of disease production, recovery and resistance. A pig-specific bacterial disease caused by Haemophilus parasuis is the focus of this study. (PRNewswire)

>  Veterinary Information Network (VIN) announced the acquisition of majority shares of and investment in Texas Veterinary Informatics, Inc.  The companies are jointly dedicated to providing veterinarians and companion animal owners definitive, state-of-the-art information and practice tools on the Internet.  An all-new, online, “test” version of Associate with over 600 canine and over 450 feline disease summaries will be available in January. The Associate provides users with a uniquely formatted full-text medical diagnostic and therapeutic reference that can be searched by disease name, clinical signs, or treatment.  Users will be able to seek information in traditional (table of contents and index) and unique (clinical sign search and comparison) formats.  (company press release)
>  Kingsway Financial Services Inc. announced that it had entered into an agreement with Pethealth Inc. to underwrite pet insurance products in the United States through its wholly owned subsidiary, Lincoln General Insurance Company. Pethealth, through its planned U.S. brokerage operation, intends to offer accident and illness insurance products for dogs and cats throughout the United States beginning in spring 2001. Pethealth, through its subsidiary PetCare Insurance Brokers Ltd. (“PetCare’’), currently offers pet insurance products to owners of dogs and cats in Canada. (company press release)


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Animal Health News

>  A 109-page report issued by the Union of Concerned Scientists claimed that antibiotics are being used far more heavily in pigs, cows and chickens than has been revealed by the drug and livestock industries, citing as evidence its own calculations of the drugs’ use on farms. The group claims that 70% of the antibiotics produced in the US, or 25 million pounds, are used in livestock for nontherapeutic purposes, compared to only 3 million pounds used in human medicine.  The report’s animal figures are much higher than those provided by the industry, and the human ones are much smaller.  A year ago, the Animal Health Institute released a report saying that all antibiotic use in animals, both therapeutic and nontherapeutic, accounted for only 36% of the 50 million pounds of antibiotics produced in the US.  The organization’s numbers for animal use were based on sales figures provided by members. (New York Times, others)

>  According to a new FDA report, hundreds of US animal feed producers have violated regulations meant to keep mad cow disease out of the country. The FDA stressed that no cases of mad cow disease have been found in US cattle despite intense monitoring, and the violations don’t mean the food supply was tainted. But armed with results from feed-mill inspections, the FDA is warning that companies could face seizures, shutdowns, even prosecution if they continue to violate rules meant to keep American livestock from eating slaughtered-animal parts linked to the deadly brain disease. Many companies in violation already have received warning letters, and some feed has been recalled. (AP)

>   The advertising campaign that promotes pork as “the other white meat’’ is likely to end soon, the victim of a growing dispute between large and smaller-scale livestock producers. The government-supervised program is financed through a fee on hogs. Farmers voted 15,951 to 14,396 to kill the checkoff program in a referendum held last year, according to results recently  released by the USDA. Opponents of the $54 million program, which pays for research as well as advertising, say it has done little to stimulate pork consumption and mostly benefits meat processors and large corporate farms.  It was the first vote on the pork program since it was created 15 years ago. U.S. pork consumption was estimated at 66.5 pounds per person last year, about the same as it was in the mid-1980s when the program was created. (AP)

>  The Japanese Ministry of Agriculture, Forestry and Fisheries plans to conduct surveys on pet food to see if it is necessary to set official safety standards. The move comes as a growing number of pet owners are hoping to provide healthier food to their pets and ensure its safety. Unlike in the United States or Europe, where pet food is regulated as feedstuff, there is no regulatory framework in Japan. The use of additives or nutritious ingredients is currently up to the pet food makers themselves. The officials said the ministry will form a committee to look into pet food production and distribution lines and compare ingredients of domestic products with those of imported products. (AP)

>  French pork producers announced that they would launch a label detailing the origin of pig products raised in the country in an effort to boost consumer confidence and consolidate the sector’s recent recovery.  The label will be unveiled at the annual farm show in Paris next month. (AgWeb)

>  USDA and University of Vermont researchers have produced a clone of a purebred Jersey cow whose cells may offer a biotechnological defense against mastitis disease. It will at least another year before the cow, named Annie and born in March 2000, begins producing milk and scientists can begin testing for mastitis resistance. Annie is the first to be genetically altered with a gene for an agricultural application. Scientists hope that Annie will resist bacterial disease caused by Staph. aureus by secreting an added protein called lysostaphin. In 1999, trials with seven transgenic strains of lysostaphin-producing mice, the protein effectively killed S. aureus bacteria in both the genetically modified rodents’ mammary glands and milk. (AnimalNet – ARS)

Agribusiness News

>  Genetically modified wheat, barley and rice could be available commercially within the next three years, although the recent controversy surrounding StarLink bio-corn could hinder their arrival. Monsanto’s Roundup Ready wheat could be available to farmers by 2003. If approved by government regulators and not shunned by consumers, it would be the first genetically modified wheat joining a basket of crops already bioengineered including corn, soybeans and cotton. The wheat industry has promised not to make the same mistakes in its marketing of bio-wheat. (E-markets – The Arizona Republic)

Brakke Consulting Viewpoint
The recent articles and editorial in the New York Times stimulated by the Union of Concerned Scientists’ report on antibiotic use are very unfortunate for the industry.  The articles suggest to the FDA that they need more control and information regarding how and where drugs are used in animal health. Whatever happened to balanced reporting and comments related to the importance of veterinarians in food safety? 

One encouraging sign is a program initiated by some of the veterinary schools to begin training promising veterinary students in the international aspects of food safety.  This program, conceptualized by Texas A&M, needs the support and commitment of the animal health industry to succeed.  The objective of the program is to make veterinary students aware of the vital role they play in protecting the public health, with an emphasis on the global community. 

If your firm is interested in participating, please call or email our Dallas office at (972) 243-4033, or  We will see many of you at the North American Veterinary Conference next week in Orlando.

[Ron Brakke]
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