The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for September 22, 2000

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Company Earnings Releases

> Alcide Corporation announced net sales and earnings for its first fiscal quarter which ended Aug. 31, 2000.  Net sales of $4.2 million for the quarter ending Aug. 31, 2000 were the highest for any quarter in Alcide’s history and were 59% higher than for the first quarter last year. Sales of Sanova food antimicrobial to the poultry industry totaled $1.7 million, an increase of $1.3 million compared to the first fiscal quarter last year, as this new Alcide business continued to expand rapidly. At the end of the quarter 19 plants representing 11% of the total U.S. poultry market, were utilizing the Sanova System to improve the quality of their product. In addition to the 19 plants now operational, there are 4 Sanova Systems in various stages of installation and scheduled to start within the next 30 days and 4 additional plants have contracted for Sanova installation in the future, resulting in a total of 27 plants under contract. (Business Wire)

Company News Releases

>  Pfizer announced the retirement of Brian Barrett as Vice President, Pfizer Inc, and President of the Animal Health Group.  Mr. Barrett will retire at the end of February 2001, following a distinguished career that spans 35 years, including more than four years as President of the Animal Health Group.  Pedro Lichtinger, currently Area President of Animal Health’s Europe/Africa, Middle East Region, will succeed Mr. Barrett as president of Animal Health.  He will assume his new responsibility October 1.  Mr. Barrett will be chairman of the Animal Health Group until his retirement. (PRNewswire)

>  PETCO Animal Supplies announced the signing of a memorandum of understanding related to a proposed settlement of the class action lawsuits filed during May 2000 resulting from the proposed merger of BD Recapitalization Corp. into PETCO.  As previously reported, the Company has entered into a definitive merger agreement with a company organized by Leonard Green & Partners, L. P. and Texas Pacific Group. PETCO anticipates completing the transaction in the fall of 2000. (Business Wire)

>  Veterinary Centers of America Inc. announced that it has completed the previously announced merger with an affiliate of Leonard Green & Partners L.P. for $15.00 per share in cash.  The transactions contemplated by the merger agreement were approved by the requisite vote during a special meeting of stockholders of Veterinary Centers of America Inc. on Sept. 19, 2000. The merger will result in a recapitalization of VCA. The parties are taking steps to consummate the merger and expect the closing of the merger to occur on Sept. 20, 2000. (Business Wire)

> IGI, Inc. announced that it has completed the sale of its Vineland Laboratories Division to the Lohmann Animal Health Organization of Cuxhaven, Germany, for $14.8 million. IGI stated that the proceeds of the sale are being used to reduce its substantial bank debt. (PRNewswire)

>  Heinz North America, an affiliate of the H. J. Heinz Company announced the formation of the Heinz Specialty Pet Food organization to focus specific attention on pet stores and the veterinarian community worldwide.  The specialty pet food business for Heinz will now be separated from the retail grocery and mass merchandisers pet food business and will be organized under one management team.  Heinz Specialty Pet Food is headquartered in Pittsburgh, Pennsylvania, and is comprised of pet food brands that are marketed directly to pet specialty stores and through veterinary clinics.  Heinz currently sells its specialty pet food products in over 40 countries worldwide.  Some of the leading Heinz Specialty pet food brands are Nature’s Recipe, Innovative Veterinary Diets and Techni-Cal. (PRNewswire)

>  A group of cattle producers today asked a U.S. District Judge to recertify their class action suit against IBP, Inc., claiming the giant meat packing firm has unfairly fixed the price of cattle ready for market.  Cattlemen maintain IBP, through a practice known as “captive supply”, has deliberately depressed the price of cattle on the open market, violating both the spirit and letter of the law.  The cattlemen first filed their lawsuit in 1996, and the Court certified their case for trial in April, 1999. IBP successfully delayed the proceedings when an appeals court signaled that the original class was too broadly defined. Cattlemen believe that has now been corrected. If the cattlemen prevail, damages could reach as high as $1.5 billion.   (AnimalNet)


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Animal Health News

>  BioNet Technologies, Inc.  Immune Technologies Division in the process of gaining international registration and developing strategic alliances for the marketing and sales of its new product, I-MOD-ER, an immune modulating product for horses suffering from respiratory diseases, currently in the pre-licensing phase.  I-MOD is the trade name for products developed by Immune Technology, Inc. utilizing their innovative and revolutionary “Immunomodulating Technology”. This technology treats microbial infections by enhancing the patient’s immune system. ITI’s products target diseases affecting horses, dogs, cats and cows. (Business Wire)

>  Britain’s ailing pig industry suffered a further setback when the government confirmed the 13th case of swine fever and said measures aimed at containing the outbreak were set to stay in place.  Officials are investigating any links between the fresh case in the east of England
and the others in the area.  Wednesday the USDA banned pork imports from the region. The European Union is maintaining similar restrictions. (Reuters)

>  The U.S. government will begin allowing farmers to display a seal on meat and dairy products to attest that they treat their cattle and chickens humanely.  But the voluntary standards are so stringent that few farmers initially can meet them.  To qualify for the “Free Farmed” seal, farms would have to eliminate cages for laying hens and stop using forced molting, the withdrawal of food and water to increase egg production. Dairy cattle would have to have access to pastures.  Standards designed to improve farm conditions for broiler chickens and beef cattle also are in the package. Rules for hog farms are being written. The story says that the American Humane Association developed the standards and set up a new organization, Farm Animal Services, to inspect farms that want to use the label. The USDA is to monitor the inspection process.
The program is based on a British system developed by the Royal Society for the Prevention of Cruelty to Animals. (AP)

>  A Minnesota power producer is preparing to build the first poultry litter-fired power plant in the US.  The plant will burn poultry litter that will then be sold back to farmers and poultry producers as fertilizer or ashen feedstuff, with the electricity produced sold to an energy company.  The plant is expected to use as much as 500,000 tons of poultry litter per year. (Feedstuffs)

>  An Agricultural Research Service (ARS) chemist has developed antibodies for nicarbazin, a medicinal feed additive in chicken feed.  The antibodies will first be utilized in an enzyme-linked immunosorbent assay (ELISA) kit. After successfully developing the ELISA kit for use in the laboratory, International Diagnostic Systems Corporation will evaluate the antibodies as the basis for an easy-to-use field test.  ARS has applied for a patent on the antibodies, which were developed under a Cooperative Research and Development Agreement (CRADA) with IDS. The ELISA kit could be available for use by the quality control departments of feed manufacturers by the spring of 2001. (USDA ARS News Service)

Agribusiness News

>  Cargill Inc announced it is selling its hybrid seed business to Dow’s Mycogen Seeds.  The deal, set to close in October, includes all seed research, production and distribution assets of Cargill Hybrid Seeds in the US and Canada, except Cargill’s Intermountain Canola, Goertzen Seed Research and the Western Canadian seed distribution business.  The purchase price was not disclosed.  The agreement will make Mycogen the third-largest US seed corn producer.  (e-markets)

Brakke Consulting Viewpoint

The start of the Olympics seem to have scooped most of the animal health stories this week.  When you combine that with the budget process for 2001, it makes for a slow week in the news.  Hopefully each of you will be rewarded with your own “medals” as you finish out 2000.

Several economists are now predicting some difficult times ahead for beef and pork prices.  There is a large supply of heavy animals out there waiting to be slaughtered, and this will probably have a negative effect on prices.

We are saddened to see that Brian Barrett will be retiring from Pfizer’s Animal Health Group, but are glad to see that he will still be around for a bit before we lose him from the Industry.  We wish him all the best in the future.

Have a great week.

[Ron Brakke]

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