The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for March 31, 2000

Copyright © Brakke Consulting, Inc.
Company Earnings Releases

Company News Releases

> Monsanto Company and Pharmacia & Upjohn announced that the European Commission has cleared the planned merger of the two companies. Based on the European approval, the companies confirmed plans to close the merger on Friday and to begin trading as Pharmacia Corporation on Monday. In relation to the European Commission ruling, the two companies have agreed to divest a few immediate-release analgesic products marketed by Pharmacia & Upjohn in Sweden.  Sales of these products are not significant and are immaterial to the overall transaction.  Pharmacia Corporation’s corporate and pharmaceutical business headquarters will be in Peapack, N.J.  The agricultural business headquarters will be in St. Louis and will retain the Monsanto name.  (PRNewswire)

>  Heska Corporation announced that it has entered into an option agreement with Pharmacia Diagnostics, a subsidiary of Pharmacia Corporation. Under the agreement, Pharmacia Diagnostics will evaluate the use of Heska’s recombinant allergen technology for use in their allergy diagnostic systems for humans.  During the option period, Pharmacia Diagnostics has an exclusive right to license the technology for instrument-based human diagnostics. Financial terms of the agreement were not disclosed.  Pharmacia Corporation is the global leader in allergy diagnostics. (PRNewswire)

>  Doane Pet Care Company announced that it has entered into a Share Purchase Agreement by which it will acquire A/S Arovit Petfood, which is headquartered in Denmark.  Under the terms of the Agreement, Doane will pay approximately DKK 1.2 billion (approximately US $156 million) and will assume indebtedness, net of cash, of approximately DKK 64 million (approximately US $8 million.  Arovit is a leading producer of private label pet food in Europe supplying a full range of products for dogs and cats, including wet, dry and treats. (PRNewswire)

>  IDEXX Veterinary Services, Inc. announced that the Company has teamed with to offer IVS customers laboratory results online, at no extra charge.  IVS is the only diagnostic laboratory in the U.S. to offer lab results over the Internet.  (company press release)

>  Veterinary Centers of America Inc. announced the signing of a definitive merger agreement with a group led by Green Equity Investors III, L.P., an affiliate of Leonard Green & Partners, L.P.  Under the terms of the merger agreement, the company’s stockholders will receive $15 per share in cash. Bob Antin, chairman and chief executive officer of VCA and other members of management will retain a portion of their stockholdings in the surviving corporation, although a substantial amount of their shares will be acquired in the transaction along with, and at the same price as, all other outstanding shares.  The company currently anticipates completing the transaction in the third calendar quarter of 2000.  Leonard Green & Partners, L.P. is a private Los Angeles-based merchant banking firm specializing in organizing, structuring and sponsoring management buy-outs, going private transactions and recapitalizations of established public and private companies.  (Business Wire)

>, the free web page building service with integrated e-commerce, announced it is adding to its roster of online merchants. (Business Wire)

>  VetConnect, Inc. is pleased to announce a content alliance agreement with Lippincott, Williams & Wilkins, Inc., Baltimore, Maryland.  The agreement allows for  incorporation of The 5-Minute Consult: Canine and Feline, edited by L.P. Tilley and F.W. Smith into   The electronic version contains the complete medical database of the published and CD versions of The 5-Minute Consult. In January, VetConnect, Inc. announced exclusive content agreements with four other providers: North American Compendiums, Inc., Lifelearn, Inc., Veterinary Learning Systems, and Veterinary Medicine Publishing Group. (company news release)

>  Vetstream, Inc. announced its first quarterly update of CD-EQUIS, its interactive equine medical reference publication.  This update, which adds to CD-EQUIS new clinical information in 13 areas of equine care, is now available to U.S. veterinarians. CD-EQUIS provides comprehensive information on topics ranging from behavior to microbiology. (company press release)

Animal Health News

>  Hog futures rose to a 2 1/2- year high on signs that a declining number of slaughter-ready animals is reducing output of bacon, chops and other pork cuts popular during the spring and summer.  Hogs for June settlement rose 1.15 cents, or 1.6%, to 73.55 cents a pound on the Chicago Mercantile Exchange, the  highest closing price since August 1997. Hog futures are about 41 percent higher than a year ago. (Bloomberg News)

>  According to an article on AgWeb, University of Missouri livestock economist Ron Plain says hog prices could reach $50, possibly $55 by this summer. He is basing his bullish outlook on continuing strong consumer demand, which has been supported by strong economic conditions. Plain expects the best prices during June, July and August of this year. Plain said in his weekly swine report that if his numbers are right, second quarter slaughter will drop 4% and third quarter kill could decline 5% from year-ago levels. (AgWeb)

>  US Cattle prices fell almost 2%, the biggest one-day drop in five months, on expectations that an outbreak of E. coli bacteria at a Minneapolis elementary school could lead consumers to buy less beef.  Five students have confirmed cases of infection by E. coli 0157:H7 bacteria and 11 more show symptoms associated with the  food-borne illness, a state health official said. Cattle for June delivery fell 1.175 cents, or 1.7%, to 68.775 cents a pound on the Chicago Mercantile Exchange, the steepest one-day drop since Oct. 25. Prices are up 7.4% from a year ago, on strengthening beef demand. (Bloomberg News)

>  Australia and Singapore joined three other nations in suspending imports of beef and pork from South Korea and Japan on Wednesday as concern spread over disease found in cattle. Australia suspended the import of dairy products from Japan and Korea, while Singapore suspended Japanese beef imports. Korean authorities were cited as saying that it could take up to a week to establish whether an illness affecting two cows on Sunday is foot-and-mouth disease, which is fatal and highly contagious on cattle and pigs. (Reuters)

>  The European Commission is set to propose compulsory tests on cattle for mad cow disease
in a bid to build a realistic picture of a disease many fear is under-reported. The proposal will force all European Union countries to undertake random tests, focusing on fallen stock — those animals that die on the farm for no apparent reason.  Under the EU proposal, member states will be able to choose one of three tests on the market — one from France, one from Switzerland and another from Ireland. (Reuters)

>  Japanese researchers announced that two cloned bulls are set to become fathers following a successful experiment in which their semen was used to artificially impregnate cows. The experiment was conducted by Japan’s Ministry of Agriculture in conjunction with researchers in Kagoshima Prefecture to determine the ability of cloned animals to reproduce. Twenty-four cows were artificially inseminated in December; pregnancy tests this month showed 14 of the cows had conceived.  Barring complications, the offspring of the cloned bulls will be born in November or December. (AP)

>  Scientists are using cutting-edge, molecular genetics-based beef breeding technology to identify in cattle, genes that are associated with high growth. The study, a collaboration between Canada’s Lethbridge Research Centre and the University of Alberta, is aimed at developing DNA typing that will identify animals with enhanced growth performance. Scientists will clone and characterize the bovine “high growth” gene and determine its effect on post weaning growth in cattle,  possibly allowing producers to identify animals that would grow faster. These animals would also be heavier at a particular age and would show better feed conversion than animals without the “high-growth” allele. (Canada Alberta Beef Industry Development Fund)

>  California Assembly Member Ted Lempert has introduced a bill which would ban forced molting in layer hens, which is illegal in Europe and the UK. The bill is the first legislative step towards banning forced molting in the United States. (AnimalNet)

>  Canada’s federal government is proposing new regulations for medicated feeds production. This will require licensing and upgraded control measures for manufacturers of medicated feeds in Canada. The proposal includes domestic commercial and on-farm manufacturers, which could cost the livestock industry $100 million. (AnimalNet)


Agribusiness News

One of the largest yearly investments most companies make is in Advertising and Promotion.  When was the last time you seriously evaluated your program?  Are you using the right mix of sales promotion, public relations, database marketing and advertising?  Do you have a customer retention program?  Are you taking advantage of global synergies?  Do you have an Internet strategy, or merely a web site?  Are your communications agencies performing?

Brakke Consulting has helped several companies evaluate and improve their marketing communications programs.  Senior Consultant John Volk has more than 25 years of experience in animal health advertising and public relations, and pioneered direct-to-consumer advertising for companion animal products.

If you are interested in improving the return on your A&P investment, contact John Volk in the Chicago office of Brakke Consulting, (773) 327-4941, email:

Brakke Consulting Viewpoint

The Japanese Ministry of Agriculture, Forestry and Fisheries has announced that the animal health authorities had diagnosed suspected Foot & Mouth Disease in 10 fattening beef cattle fed in a small farm located in the suburbs of Miyazaki City, Kyushu island.  All these cattle were destroyed on March 25, 2000. The Japanese National Institute of Animal Health had carried out an examination of FMD with specimens of these cattle, and has detected FMD antibody but could not been isolate the virus so far. JMAFF has prohibited transfer of all live cloven-hoof animals and closed all slaughter houses and livestock markets in the area within the radius of 20 km. So far there has not been found further FMD outbreaks in Japan.

On the other hand, the Korean MAF has announced that an outbreak of suspected FMD had occured in a farm located in Kyungki-Do, Korea. In Taiwan, outbreaks of FMD has still spread from pigs, cattle and goats. As a result, the JMAFF, Korean MAF and Taiwan Agricultural Council have decided to suspend imports of beef, pork, dairy products and meat & bone meals etc from each other countries respectively.

[Dr. Atsuo Hata, Brakke Consulting Japan]
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