The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for August 20, 1999

 Akzo Nobel acquired Hoechst Roussel Vet last week for $718 million.  The combined sales of Intervet and Hoechst will be an estimated $920 million, placing it in the top 5 animal health companies worldwide.
 Proctor & Gamble acquired The IAMS Co. last week for about $2.3 billion.  IAMS sales are approximately $800 million worldwide.
 Synbiotics Corp. announced revenues of $8.3 million for the second quarter ended June 30, 1999, a decrease of 7% over the prior year. Revenue for the six months ended June 30, 1999 was $19.2 million, a 7% increase over the prior year six month period.
 Synbiotics launched ReproCHEK, a new in-clinic canine pregnancy test.  The test detects pregnancy 21-25 days post-breeding.
 Pfizer received two FDA approvals.  Zeniquen, a canine fluoroquinolone, is available now; Revolution, a once-monthly flea adulticide and heartworm preventative, will be available in September.
 announced record net sales of $10.3 million for its fiscal year ended March 31, 1999, up 184% over last year’s net sales. Net income for the period was $514,000, compared to last year’s net loss of $1 million.

Brakke Consulting’s
New Top 10 Animal Health Companies

 1.   Merial  $1,495 million
 2.   Pfizer    1,315 million
 3.   Bayer    1,000 million
 4.   Intervet       920 million
 5.   Fort Dodge       800 million
 6.   Novartis       650 million
 7.   Schering Plough      645 million
 8.   Elanco       615 million
 9.   Pharmacia & Upjohn     410 million
 10. Hoffmann-La Roche      375 million

 (from the Brakke Consulting 1999 Overview)

The Brakke Consulting Viewpoint:
Proctor & Gamble acquires IAMS

The acquisition of IAMS by Proctor & Gamble for $2.3 billion (3X sales) shocked the pet nutrition industry.  The IAMS purchase provides the $38 billion consumer marketing company with one of the most prestigious brands in pet food. 

In contrast to Colgate’s strategy after acquiring Hill’s, it is believed that Proctor & Gamble may move at least one of the IAMS brands into the mass market channel before year-end 1999.  Proctor & Gamble also indicated in the press release that other investments in the companion animal health business could be of interest, and acquisitions in this area could be just around the corner.

The entry of a consumer-goods company of Proctor & Gamble’s size into the super-premium pet foods market should have others reviewing their strategies for competitive position.  The pet shop and veterinary industry could well face the loss of one of their most significant pet food brands to the mass market channel.


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