Animal Health News & Notes for March 24, 2000

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Brakke Consulting’s
Animal Health News & Notes for March 24, 2000
Copyright © Brakke Consulting, Inc.
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Company Earnings Releases
 Aventis reported 1999 sales for Merial were 1.6 billion euros ($1,610 million), down 1% from 1998 sales.  Sales of Frontline increased 9.6% to 296 million euros ($297 million), while avermectin sales declined 4.4% to 530 million euros ($533 million). (company website)
 Neogen Corporation announced the highest revenues for any quarter in the Company’s 18-year history.  Neogen reported third quarter revenues of $6.275 million, an 18% jump from the previous year’s $5.29 million.  Year-to-date, revenues for fiscal year 2000 stood at $17.0 million at the end of the third quarter, as compared to $16.9 million at the same time last year.  Neogen’s third quarter net income was $627,000 as compared to the prior year’s $589,000.  Not including revenues from Acumedia, which was acquired by Neogen in the third quarter, revenues from the Company’s Food Safety Division increased by more than 23% in the quarter as compared to last year, and its Animal Safety Division saw an increase of 13%. (PRNewswire)
 Alcide Corporation announced net sales and earnings for its fiscal third quarter ended Feb. 29, 2000. Net sales of $2.9 million for the quarter were 26% higher than for the equivalent quarter a year ago.  Nine month sales of $8.5 million were $220,000 lower than nine month sales last year, which included a nonrecurring contractual minimum payment from the Company’s former distributor, Novus International, Inc. The Company’s animal health and surface disinfectant sales for the nine month period were $6.2 million vs. $7.4 million for the same period last year. Sales of Sanova to the poultry industry totaled $995,521 for the third quarter and $2.3 million for the nine month period.  (Business Wire)

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Company News Releases
 Takeda Chemical Industries Ltd., Japan’s biggest drugmaker, and Schering-Plough Corp.’s Japanese unit said they’ll set up a joint venture to produce drugs for animals in Japan. The Osaka-based drugmaker will transfer its animal drug business to the venture, Takeda Schering-Plough Animal Health, as of June 30, the companies said.  For Schering-Plough, one of the world’s top five animal health companies, the joint venture will boost its presence in the world’s third-biggest market for animal health products. Takeda’s animal drug business — covering livestock, marine products and pets — had annual sales of 8.1 billion yen ($76.5 million) in the year ended March 1999, it said.  (Bloomberg)
 Heska Corporation announced that it has received USDA approval to manufacture and market its new canine heartworm diagnostic product, Solo Step CH Batch Test Strips. The Company plans to make the product available to veterinarians in approximately two weeks. Solo Step CH Batch Test Strips are a variation on the Solo Step CH point-of-care test, which was introduced in January 1999. This new batch test uses the same technology as the point-of-care product, but it is formatted for simultaneous testing of multiple samples. (PRNewswire)
 Milkhaus Veterinary Products, Inc. announced the initiation of its multi-center mast cell tumor study. MVP gained approval from USDA APHIS to proceed with the evaluation of its cancer therapeutic, LDI-100, in canine patients. The company will seek to enroll 90 dogs with mast cell tumors through its five investigational sites.  Mast cell tumors are among the most common forms of cancer in dogs. Current treatment involves the use of steroids, radiation and chemotherapy and surgery. Such treatment is expensive and often fails to affect a cure. (Business Wire)
 Destron Fearing Corporation announced that it has entered into an agreement with Temple Tag Ltd., the largest feedlot tag company in the United States, to supply Destron’s patented electronic ear tag (e.Tag) to the cattle market.  Temple Tag plans to introduce Destron’s electronic tag technology to the cattle market beginning spring 2000. (PRNewswire)
 PETCO Animal Supplies, Inc. announced the opening of its 500th store, making PETCO the first pet superstore chain with 500 U.S. stores.  During fiscal 2000, the Company plans to open a total of 50 new superstores and enter the Pittsburgh and Atlanta markets. PETCO’s entry into Atlanta will mark the beginning of its penetration into the southeast, a region offering excellent growth opportunities. (Business Wire)
 Pets.com announced an agreement with Yahoo! Inc. to be a featured store on Yahoo! Shopping.  As a premier merchant on Yahoo!, Pets.com will be the only pet retailer to appear on the Yahoo! Shopping main page for an agreed upon period of time. In addition, Pets.com will have fixed button placement in the Pet and Animal Supplies category of Yahoo! Shopping and pet-related categories throughout the Yahoo! network of properties. (Business  Wire)
 Friona Industries, L. P. is pleased to announce that its Randall County Feedyard is the first commercial feedyard in the U. S. to be awarded use of the Brand Mark symbol by the National Cattlemen’s Beef Association.   As a result of this certification, Randall County Feedyard can now display the “Brand Mark” Mark of Quality and the TCFA BSQA names and symbols on promotional and advertising materials.  TCFA BSQASM is one of four beef quality assurance programs in the nation to be honored with the NCBA Brand Mark for their “efforts to improve the quality and consistency of today’s beef products”.  (company press release)
 New Internet veterinary pharmacy Petscriptions.com announced that it has selected Synchrony Communications, leading electronic customer relationship management (eCRM) technology provider, to boost its virtual pharmacy.  Petscriptions’ customer service agents, who are licensed pharmacists, will offer online counseling for common problems. Help will also be available to assist customers in getting prescriptions and completing orders online. With a direct link to Petscriptions fulfillment process, Synchrony technology will help ensure orders are filled rapidly. (Business Wire)
 Pet Assure Inc. and Cornerstone Internet Solutions announced the launch of VETgalaxy.com, a B2B e-commerce marketplace targeting the $12 billion veterinary service industry.  VETgalaxy.com is a B2B e-commerce marketplace, linking buyers and sellers in the veterinary industry through a competitive on-line exchange.  The exchange offered by VETgalaxy.com enables veterinarians to post a customized inventory list online and requires suppliers to continually submit their latest product prices.  Purchase orders are generated based upon best price and availability from veterinarian- selected vendors.  VETgalaxy.com’s Web site is to be launched in a pilot program in mid-April.  The site will be fully functional at that time, but confined to 30 veterinary practices until the completion of the pilot in August 2000 when VETgalaxy.com anticipates a national roll-out to the veterinary marketplace. (PRNewswire)

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Animal Health News
 HealthTronics, Inc. has entered into an agreement with Shock Waves, Inc., to introduce the EquiTron into the United States. The EquiTron is a veterinary extracorporeal shock wave therapy system (VESWT) designed specifically for the treatment of animals.   Shock Waves, Inc., the first VESWT company to treat equine patients in the United States and the well established leader in VESWT research, offers HealthTronics a significant entree into the equine, canine and feline veterinary medical markets, estimated to include 7 million horses and 60 million dogs and cats.  Veterinary use of non-invasive shock wave lithotripsy was introduced in the United States by Shock Waves Inc. in the spring of 1998. VESWT is particularly effective in the treatment of navicular disease, arthritic changes in the hock and saucer fractures.  Other potential uses include healing for bone fractures, osteo-degenerative conditions, sesamoid fractures, navicular disease and tendinitis. (Business Wire)
 The German parliament voted to lift a four-year-old ban on British beef imports Friday, leaving France as the only European Union country with a ban still in effect. Coupled with strict labeling rules for British beef, the lifting of the ban formally takes effect after a government order expected to be published by the end of March. (AP)
 The European Union has said it will lift its threat to ban imports of US hormone-free beef after US authorities agreed to tighten the testing used to detect hormone residues in meat. (Feedstuffs)
 The study of the traits of the cattle in the Canadian Beef Cattle Reference Herd has drawn researchers closer to understanding what makes one steak tender and another tough. Researchers have identified what seems to be a link between meat tenderness and a section of one of the 30 chromosomes found in the nucleus of a bovine cell. If they are successful, there could someday be a genetic test allowing cattle producers to identify tender-meat bulls to keep for breeding. (Western Producer)

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Agribusiness News
 American Home Products Corporation announced that a definitive agreement has been signed with BASF Aktiengesellschaft for the sale of AHP’s Cyanamid Agricultural Products business. Under the agreement with BASF, which is subject to certain customary conditions, BASF will pay to American Home Products $3.8 billion in cash, and will take out loans of up to two billion euros to finance the deal to be paid back in five to seven years. The company said during an analysts’ teleconference that development of the new products would boost its sales by about three billion euros.  In a separate transaction, AHP is selling certain products to an unrelated party for $28 million.  According to John R. Stafford, Chairman, President and Chief Executive Officer,  the sale of Cyanamid reflects AHP’s strategy to focus on its pharmaceutical, biopharmaceutical, consumer health care and animal health products businesses. (PRNewswire)
 BASF Aktiengesellschaft announced that it is joining a group of leading global chemical companies and SAP AG to form an independent joint venture with the goal of creating the leading electronic marketplace for the chemical and pharmaceutical industries using mySAP.com e-business and marketplace technology.    In addition to BASF and SAP, the founding partners of the new joint venture – which is still open to new members globally – include Degussa-Huls AG, Henkel KGaA and Metallgesellschaft AG. (Business Wire)

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Brakke Consulting Viewpoint

 I want to use the viewpoint space this week to thank the firms that have already seen the Brakke Consulting 2000 Animal Health Industry Overview.  The comments from those who have seen it have been very positive, especially regarding the top company profiles portion and our insights into the other key issues currently impacting our industry.  If you have not yet scheduled a presentation for your group, you should consider putting it on the calendar in the near future.

 The first 100 internet usage surveys from small animal veterinarians have been tabulated and are being analyzed.  We expect to have an additional 200 surveys completed in the next two weeks.  Based on preliminary analysis, we believe that some of the results may be surprising to many of you.  The study will be available at the end of April, and is priced at $9,750.  If you order the study by March 31, you can receive a preliminary analysis prior to study publication.  Please call the Dallas office at (972) 243-4033 for more information.
 
 [Ron Brakke]
 
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