The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for March 17, 2000
Copyright © Brakke Consulting, Inc.
Company Earnings Releases
 Bayer AG reported sales of its animal health group were 917 million euros ($920 million), up 3.5% over the prior year’s revenues of 886 million euros.  Growth was attributed to the companion animal sector, which was reported to represent almost half of the animal health group’s sales. (Bayer annual report)
 Synbiotics Corp. reported results for the year ended Dec. 31, 1999.  Revenue for the year ended Dec. 31, 1999 was $32.0 million, compared with revenue of $31.7 million for the prior year.  Net loss for the year was ($749,000), compared with a net loss of ($1,911,000) for the prior year.  Direct sales in the U.S. continue grew by 40% in the fourth quarter as a result of an expanding sales force, telesales team, and industry leadership on the Internet.  (BW HealthWire)

Company News Releases
 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. (PRNewswire)
 Monsanto Co. and Pharmacia & Upjohn Inc. expect to close their proposed $27 billion merger ahead of schedule. In a joint press release Wednesday, the two companies said, pending shareholder approval, they expect to close the merger on or before April 1. Monsanto and Pharmacia & Upjohn confirmed that the European Union extended the deadline for clearing the proposed merger to March 30 from March 17, based on remedies the companies offered to address regarding E.U. antitrust concerns. The companies said as part of its agreement with the E.U., they will divest a few minor pharmaceutical products in Scandinavia, which they termed immaterial to the transaction as a whole. (Dow Jones)
 announced that the Company has resolved all outstanding comments with the Securities and Exchange Commission concerning its filing on Form 10-SB.  This enables the Company to comply with Nasdaq Rule 6530 and to continue trading on the over-the-counter bulletin board.  It was erroneously reported earlier that PetQuarters would be removed from trading on the OTC Bulletin Board. (PRNewswire)
 announced that it has filed a registration statement with the Securities and Exchange Commission for an initial public offering of shares of its common stock.      CIBC World Markets will act as the lead manager of the offering. The co-managing underwriters of the offering are SG Cowen and Wit SoundView. (Business Wire)
 has opened the Three Dog Bakery boutique at  The co-branded specialty shop will include Three Dog Bakery’s distinctive all-natural food, dog treats and Gift Boxers.  (Business Wire)

Animal Health News
 PPL Therapeutics is pleased to announce that on 5th March 2000, five piglets, all healthy, were born as a result of nuclear transfer (cloning) using adult cells. This is the first time cloned pigs have been successfully produced from adult cells. The successful cloning of these pigs is a major step in achieving PPL’s xenograft objectives.  It opens the door to making modified pigs whose organs and cells can be successfully transplanted into humans.  Pigs are the preferred species for xenotransplantation on scientific and ethical grounds. Clinical trials could start in as little as four years and analysts believe the market could be worth $6 billion for solid organs alone, with as much again possible from cellular therapies, e.g. transplantable cells that produce insulin for treatment of diabetes. (PRNewswire)
 Bio-Enhancement Systems Corporation (“BESCORP”) announced the successful launch of its first commercial product, the Animal Behavior Modifier (“ABM”), targeted at the beef and dairy cattle food production industries.  The ABM is a device engineered to naturally enhance the weight gain of beef cattle and the milk production of dairy cattle without the use of steroids or growth hormones.  The technology developed by the company is based on a well-established scientific principle that the application of mild, non-painful pressure to the tail of an animal will result in enhanced eating and other motivated behaviors leading to increased efficiencies in food animal products. (PRNewswire)
 U.S. beef consumption rose 2% in 1999, to 66.2 pounds per person, according to the USDA, as the meat enjoyed its best year since the 1980s. Factoring in higher prices, consumer spending on beef shot up 5% to $49.2 billion, according to Chicago-based marketing firm Technomic Inc. Still, marketing research shows chicken will surpass beef as Americans’ meat of choice by 2005. (AP)
 Meatpackers will soon be required to disclose the prices they are paying for livestock, under rules proposed Tuesday by the USDA. The new program, which was authorized last year by Congress, is intended to give cattle, hog and sheep producers more leverage in bargaining with processors. The pricing data are to be reported to USDA at certain times of the day. In addition to livestock, purchases of imported lamb cuts also will be covered by the reporting requirement. The department is seeking input from producers and processors on how to report the data back to the industry. USDA officials say they expect to have the system operational by this summer. (AP)
 Corn that results in “cleaner” manure when fed to hogs and poultry is starting to become available to crop and livestock producers. The corn is low in phytate, the main phosphorus storage unit in corn grain. Non-ruminant animals such as poultry and hogs can’t absorb phosphorus in this form, so it passes through into the manure.  But hogs and poultry need phosphorus, so supplemental P is added to their diets. This results in manure that contains a relatively high concentration of P.  Phosphorus is a pollutant when it gets into lakes and streams. It can be washed into lakes and streams when water flows across land having phosphorus fertilizer or manure on the surface. (AnimalNet)
 Purdue University researchers have developed a cost-effective, nutritional diet for pigs that produces manure with less nitrogen and less odor than typical pig excrement.  The diet has reduced crude protein in comparison to standard hog diets, and is supplemented with synthetic amino acids and cellulose.  The diet also costs less per ton than the standard hog diet. (Ascribe News)

Agribusiness News
 The European Union will keep its de facto moratorium on the approval of genetically modified crops in place at least for a further six months. An EU committee had been due to decide on March 9 whether to approve marketing and sale of three new genetically modified crops in the 15-nation bloc but instead postponed a decision until the summer. EU environment ministers agreed on a de facto moratorium on new GM product approvals last June pending a new EU directive which will tighten up approval criteria. (Reuters)
 A unit of life sciences group Aventis has filed suit against Monsanto, alleging that Monsanto has used its patents covering genetically modified cotton to stymie competition, the plaintiff said on Monday. The suit alleges that Monsanto has exploited its patents to exclude competition in genetically modified, or transgenic, cotton. About 65 percent of the cotton seed sold in the United States is genetically modified. Monsanto said the company will vigorously defend the suit, which it said was without merit since the patent was properly awarded. (Reuters)

Brakke Consulting Viewpoint

Some interesting new  technology reported this week.  These are not the type of research projects most animal health companies feel comfortable with in their portfolios. However, one or more of these new approaches may well be successful commercially and have a positive impact on the industry.  We think it is great to have creative thinking in both academia and industry circles.  The ones reported this week address food safety, environmental, and increased productivity issues.   These are all “hot areas” for animal protein production.

Have a good St. Patrick’s Day.
 [Ron Brakke]
Brakke Consulting’s Executive Search Positions

We are seeking experienced, qualified, senior animal health executives.  Brakke
Consulting, Inc. currently has 12 executive searches for positions with various
client companies.  Four of these positions are new this week.  Go to the BCI
web site for further information:


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