The Experts in Animal Health

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Brakke Consulting’s
Animal Health News & Notes for August 7, 2009

Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM, MBA
earnings news
Boehringer Ingelheim Vetmedica
Central Garden & Pet
Digital Angel
Pilgrims Pride
Tyson Foods
other news
Nestle Purina PetCare
Teva Animal Health
Mergers, Acquisitions, Divestitures, Due Diligence
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> Boehringer Ingelheim Vetmedica announced results for the first six months of 2009. Interim sales totaled EUR 286 million ($264 million), an increase of 33% compared to the first half of 2008. The largest contributor to growth was the Ingelvac Circoflex pig vaccine. (company website) 
> King Pharmaceuticals, Inc. announced results for the second quarter ended June 30, 2009.  Revenues from the Alpharma Animal Health business were $83 million for the second quarter, a decline of 3% compared to the second quarter of 2008. (company website)  
> ImmuCell Corporation announced the results of its operations for the quarter ended June 30, 2009. Product sales increased by 21% to $1.001 million in comparison to the same period in 2008. The loss before income taxes was $(282,000) in comparison to a loss before income taxes of $(339,000) during the same period in 2008. (company press release)  
> Central Garden & Pet Company announced results for its fiscal third quarter ended June 27, 2009. Net sales for the Pet Products segment were $215 million, a decline of 10% compared to the comparable fiscal 2008 period. Operating income for the Pet Products segment was $29.8 million, compared to $32.7 million in the year ago period. (company website)
> Digital Angel reported results for the second quarter of 2009.  The Animal ID segment reported revenues of $7.4 million, a decline of 23% compared to the second quarter of 2008.  (company website) 
> Tyson Foods reported a profit of $134 million for its fiscal third quarter, compared with a profit of $9 million in the year-ago quarter. Sales fell 3% to $6.66 billion. (Meating Place) 
> Pilgrim’s Pride reported net income of $53.2 million on sales of $1.77 billion in its fiscal third quarter ended June 27. That compared to a loss of ($52.8 million) on sales of $2.03 billion in its year-ago third quarter. (Meating Place)  
> Merck & Co. announced that its shareholders voted overwhelmingly to approve the proposed merger with Schering-Plough.  The company expects the transaction to close in the fourth quarter of 2009, as originally planned. (company press release) 
> Merial announced that the USDA’s recently released standards for producers raising cattle for natural and Never Ever 3 programs permit the use of Corid (amprolium) for the prevention and treatment of coccidiosis when used according to the label.  (Feedstuffs)
> The FDA announced a consent decree of permanent injunction that prohibits Teva Animal Health Inc., its president, and two principals from its parent company, from manufacturing and distributing adulterated veterinary drugs. The injunction, once entered by the court, will prevent the defendants from manufacturing and distributing veterinary drugs until they achieve compliance with current Good Manufacturing Practice (cGMP) and obtain FDA approval. (FDA) 
> Purina announced the launch of Purina ONE Vibrant Maturity 7+ Senior dry dog food, a petfood intended to enhance the brain function in older dogs. The new diet contains a blend of botanical oils designed to improve brain function in older dogs and provide nutritional benefits. (Petfood Industry)
> Alltech announced the introduction of Lifeforce Formula, a once-a-day natural nutritional supplement for horses at every stage of life.  (Feedstuffs)
> Nutreco announced the acquisition of Cargill’s animal feed mills in Spain and Portugal. The deal includes 12 compound feed plants, with a production volume of around 700,000 metric tonnes and annual sales of approximately EUR 240 million ($345 million). (Animal Pharm)
> Kemin Industries announced that the FDA has approved KemTRACE Chromium Propionate, a safe, highly bioavailable and patented organic chromium source. KemTRACE is the only chromium feed additive currently approved by the FDA for use in cattle. (Animal Pharm) 
> Banfield, The Pet Hospital, announced that it will no longer offer tail docking, ear cropping or devocalization of dogs in its hospitals. The veterinary hospitals will continue to offer these surgeries on pets when it is medically necessary.  The decision was made by the company’s internal Medical Standards Board. The decision is in line with the American Veterinary Medical Association’s (AVMA) policy, which states that these procedures should only be done for therapeutic conditions. ( 
> COLOMBIA – FOOT AND MOUTH DISEASE   The World Organization for Animal Health (OIE) reported that cases of foot and mouth disease in pigs have been reported in Colombia. The infected pigs were found in a slaughterhouse located 5 km from the Ecuadorian border. The animals have been culled and a 5 km containment area established around the focus of the outbreak. No case of the disease has been reported in cattle. (Animal Pharm)
> US – H7N9 AVIAN INFLUENZA   Minnesota authorities reported turkeys have been found to be infected with the H7N9 virus after a routine examination.  The farm in which it was found has been quarantined, and the Minnesota Board of Animal Health established a surveillance zone around the operation. All flocks within 3 miles will be repeatedly tested for the virus for six weeks, along with any flocks linked to the farm. This infection is causing no illness in turkeys. (Animal Pharm)
> FRANCE – EQUINE HERPESVIRUS   Four horses have been euthanized and a fifth horse is recumbent following an outbreak of equine herpesvirus-1 (EHV-1) in a boarding stable in northern France. Quarantine has been established and will continue for at least three more weeks. Seven of the 63 horses at the stable have tested positive for the disease since July 14, and all but one had been vaccinated against EHV-1 within the past year (KSU Bites –
> US – FOOD SAFETY   The US House of Representatives passed food safety legislation that did not include the Preservation of Antibiotics for Medical Treatment Act of 2009, which would have banned certain antibiotics from use in livestock and poultry animal health. The final bill clarifies that livestock are exempt from the FDA’s regulation under the bill, including on-farm inspections and additional authorities that are currently under the jurisdiction of the USDA. The committees also made several other improvements, including clarifications to the bill’s traceability and record-keeping provisions (Pork Alert, Cattle Network)
> US – AGDUFA FEES  The FDA announced rates for fiscal year (FY) 2010 Animal Generic Drug User Fee Act of 2008 (AGDUFA) in a notice published in the August 3, 2009, Federal Register. For details, go to (FDA)
> HUMAN ANIMAL BOND   A survey of 12,000 women in 21 countries conducted by Boston Consulting Group found that pets were by far the most common answer to a question asking what makes them extremely happy; 42% of the women surveyed said that their pets make them “extremely happy.”  Other responses included sex (27%), food (19%), and shopping (5%). (Chicago Tribune) 
This week’s revenue and earnings reports reflect some excellent performance by one company, and not so positive results by the balance.  It’s interesting to note that companies with new products and technologies are holding up better than those that have an empty pipeline.  It’s a tough consumer and producer market out there for those with nothing new to sell.  If research and product development budgets continue to decline, there will be even more difficult days ahead.  It’s no wonder there’s a big scramble for the products being divested as part of the major transactions occurring.  It’s also important to note that the FDA is doing its part to insure that there will be fewer US manufacturers in business now and in the future!
Have a good weekend!!
Ron Brakke
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