The Experts in Animal Health

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Brakke Consulting’s
Animal Health News & Notes for December 4, 2009

Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM, MBA
Brakke news 
2009 US Flea Control and Heartworm Markets report
2010 Industry Overview

earnings news
Dainippon Sumitomo Pharma
ECO Animal Health

other news
Diamond Pet Foods
Henry Schein
Modern Veterinary Therapeutics
Receptors LLC
Total Nutraceutical Solutions
Wedgewood Pharmacy

Brakke Consulting will soon be publishing our 2009 report on the US Flea Control and Heartworm Markets.  The report includes valuable information on the US market for small animal parasiticides including:
  – an overview of the veterinary and OTC flea control markets
  – Product descriptions, prices, and sales for the leading veterinary flea and heartworm products
  – Overview of advertising expenditures for veterinary flea and heartworm products
The report also includes a 2009 survey of over 200 veterinarians regarding topics such as product usage, brand switching, the effect of the economy on product sale; the impact of product sales outside the veterinary clinic channel; and developing resistance to new-generation products.
The report on the US Flea Control & Heartworm Markets is available for a purchase price of $5,500. 
Please contact Dr. Lynn Fondon at (972) 243-4033 or to order the report, or for more information visit our website at  

> Dainippon Sumitomo Pharma announced that net sales of the animal health division in fiscal 2008 ended March 31, 2009 were Yen 29,648 million ($296 million). The company also announced that its animal science division would be altered into a subsidiary company specialized in animal health business including animal drugs, feed & feed additives and veterinary medical devices, beginning July 1, 2010. (company news) 
> ECO Animal Health Group announced results for the six months ended September 30, 2009.  The company posted a first half profit of GBP 368,000 ($612,000) compared with a loss of (GBP 433,000) last time. Turnover on continuing operations rose 11% to GBP 8.9 million ($14.8 million). (IBTimes)

Brakke Consulting will be presenting its annual US Animal Health Industry Overview at the North American Veterinary Conference and the Western Veterinary Conference in 2010.
NAVC Overview
Monday, January 18th, 2010
2:00 – 4:00 pm
Gaylord Palms, Orlando  
WVC Overview
Date: Tuesday, February 16, 2010
Time: 2:00 – 4:00 pm
Place: The Four Seasons Hotel, Las Vegas
To register, go to and look for the Overview link in the “What’s New” box.  Payment by major credit card is required at time of registration.
> Henry Schein Inc. and Butler Animal Health Supply announced that they will combine their animal health businesses, with Henry Schein paying about $55 million in cash for a majority share of the new company.  The new firm, named Butler Schein Animal Health, will be 50.1% owned by Henry Schein and 49.9% owned by the owners of Butler Animal Health Supply, including Oak Hill Capital Partners and The Ashkin Family Group. As part of a recapitalization at closing, Butler Schein Animal Health will incur about $300 million in debt at closing, which will be reflected on Henry Schein’s balance sheet. The deal is expected to close by year-end. (Reuters, PR Newswire)
> Diamond Pet Foods announced it has recalled certain bags of Premium Edge Finicky Adult Cat and Premium Edge Hairball cat food because they do not contain enough thiamine, an essential nutrient for cats. The company has confirmed 21 reports of thiamine deficiency in New York and Pennsylvania and the pet food was distributed in 18 states altogether. (AVMA NewsBytes)
> Neogen Corporation announced that it has acquired the BioKits food safety business of Gen-Probe Incorporated. The acquisition includes more than 50 test kits for food allergens, meat and fish speciation, and plant genetics. Financial terms were not disclosed (company press release)
> Wedgewood Pharmacy announced that it is now compounding Tiny Tabs in megestrol acetate 5mg and famciclovir 31.25mg. (company press release)
> PositiveID Corporation and its development partner Receptors LLC announced their intention to expand their exclusive license agreement to include two patents to use in conjunction with PositiveID’s Patent for an Embedded Bio-Sensor System to develop an in vivo glucose-sensing radio frequency microchip for animals, primarily dogs and cats. (Business Wire)
> Total Nutraceutical Solutions, Inc. announced that it has formulated a breakthrough Vitamin D2-enriched mushroom dietary supplement for horses. EquiSANO-D alleviates inflammation and oxidative stress in animals. (
> CANADA  Modern Veterinary Therapeutics, LLC announced that the Veterinary Drugs Directorate (VDD) has approved Revertor in Canada. Revertor is indicated for the reversal of the clinical effects of the sedative and analgesic agent, medetomidine hydrochloride, in dogs. (company press release)
> US – H1N1 IN TURKEYS   USDA testing has confirmed the first case of H1N1 virus in a US turkey flock. The infected flock is in the state of Virginia. The virus samples were taken from a turkey breeder flock because hens were experiencing a drop in egg production. (Meating Place) 
>  DENMARK – BSE   A single case of BSE has been reported in Denmark, in a 14-year-old dairy cow. The disease was confirmed by a routine laboratory test after the animal was slaughtered. The animal was born before the tightening of the restrictions on animal feed ingredients in the country. (Animal Pharm)
> US – BRUCELLOSIS   The Idaho Department of Agriculture state veterinarian reported that a beef cow from a newly assembled 600-head herd tested positive for brucellosis. The herd has been quarantined and is being tested. The infected animal and other cattle in the herd had been vaccinated for brucellosis. (AP)
> US – H1N1 SWINE VACCINE   The first 2009 Novel H1N1 swine vaccine is in use in herds in the Midwest, although its distribution is limited and carefully monitored. The vaccine was developed by Hank Harris, a professor of animal science at Iowa State University, and is being manufactured through Iowa State University and Harris’ startup company. (Meating Place)
> US – PETFOOD RECALL DATABASE   The FDA launched a searchable database for pet food recalls dating back to January 1, 2006. The site also lists new recalls as they are announced.  The site can be found at  (Pet Age)
> US – POULTRY CONTAMINATION   An analysis published by Consumer Reports found that two in three fresh broilers sold in the US carry Salmonella, Campylobacter or both pathogens. The report examined 382 chickens purchased from more than 100 outlets across 22 states, discovering that 62% of the chickens contained Campylobacter, while Salmonella was in 14% and both bacteria were in 9% of the sample. (Animal Pharm)
> RINDERPEST ERADICATION   Some time in the next 18 months, the Food & Agriculture Organization (FAO), jointly with the World Organization for Animal Health (OIE) and other partners, will officially declare rinderpest as eradicated.  According to the FAO, it will be the first time in history that humankind has succeeded in killing off an animal disease.  The victory comes after an intense decades-long campaign to isolate rinderpest, also known as cattle plague, in its last few remaining pockets and then wipe it out, once and for all. (Feedstuffs)
> US – MANDATORY SPAY/NEUTER   The Las Vegas, NV, City Council approved an ordinance to mandate spay and neutering of all cats and dogs by the age of four months. Some questions arose over whether four months was too young an age to require sterilization and whether mandatory sterilization programs are really effective in reducing unwanted pet populations. The measure will take effect April 1. Exceptions are included in the ordinance that exempt animals medically unfit to undergo the operation or specially trained service animals; breeders who have specific permits also will be exempt from the law. (DVM360)
> US – PORK PREDICTIONS   US pork producers may have to prepare for losses to continue in 2010, according to a Purdue University Extension Economist. Hog prices are predicted to average about $46 to $47 per hundredweight next year. Given the assumption of $50 costs, this would still leave $10 of loss per head, the third year in a row of losses. However, the current financial realities could mean the herd will decline, demand will improve and hog prices will be higher than the current forecast. (Pork Alert)
The announcement this week regarding the combining of the animal health businesses of Henry Schein, Inc. and Butler Animal Health continues the industry consolidation process that has been occurring for the past 30 years (so what else is new).  The only difference is that the transactions are getting larger and the stakes and risks are increasing as consolidation continues.  The other difference in this case is that it involves two long-term players in the veterinary distribution business. 
As many of you already know, we still have at least one, if not two, additional large manufacturer consolidations that could occur in 2010 in the manufacturing sector. There could even be one or two additional transactions in the distribution area.  These all make for some interesting strategic decisions related to agency and distribution agreements in 2010 and beyond. 
Are any of these transactions occurring based on the needs of the customers?  Don’t think so!!
Have a good weekend!! 
Ron Brakke
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Brakke Consulting, Inc.
2735 Villa Creek, Suite 140
Dallas, TX  75234    USA

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