The Experts in Animal Health

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Brakke Consulting’s
Animal Health News & Notes for February 5, 2010
Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM, MBA
Brakke news
2010 Industry Overview
earnings news
Animal Health Int’l
Central Garden & Pet
Pilgrim’s Pride
other news
ARKAT Nutrition
Casco Group
Dad’s Pet Care
ECO Animal Health
Lelystad Biologicals
North American Pet Products
ParaCo Technology
Social Media Ventures

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. This years Overview will contain attitudes of AH executives regarding the state and future of the industry from our fall survey, a special section on the companion animal category of supplements and BCI’s thoughts on 2010 and beyond for the industry.
WVC Overview
Date: Tuesday, February 16, 2010
Time: 2:00 – 4:00 pm
Place: The Four Seasons Hotel, Las Vegas
Online registration will close on Wednesday, February 10. After that date, please call 972.243.4033 or register onsite to attend. Payment by major credit card is required at time of registration.
To register online, go to and click on the link in the “What’s New” box.
> Pfizer Inc. reported financial results for the full year 2009. Animal Health revenues were $2,764 million, a decline of 2% compared to the prior year. Revenues included approximately 2 months of Fort Dodge legacy product revenues. (company website)
> MWI Veterinary Supply, Inc. announced financial results for its first fiscal quarter ended December 31, 2009. Total revenues were $236 million for the quarter, 2% higher than revenues for the same period in the prior fiscal year. Net income was $7.8 million, up 32% from net income of $5.9 million in the first fiscal quarter of 2008.  (CNNMoney)
> Animal Health International, Inc. reported its financial results for the company’s second fiscal quarter, which ended December 31, 2009. Net sales for the quarter were $171 million, compared to $185 million for the same period a year ago.  Net income was $1.2 million compared to $2.3 million in last year’s second quarter. (Globe Newswire)
> Central Garden & Pet Company announced results for its first quarter ended December 26, 2009. Net sales for the Pet Products segment were $182 million, a decrease of two percent compared to $186 million in the year ago period. (company website) 
> Pilgrim’s Pride Corp. reported results for its fiscal 2010 first quarter ended Dec. 27, 2009. The company reported sales that totaled $1.603 billion, down from $1.877 billion the year before. Pilgrim’s Pride reported net earnings of $33.6 million compared with a loss of ($229 million) in its fiscal 2009 first quarter. (Feedstuffs)
> The Nutro Company has introduced Greenies Pill Pockets Allergy Formula Treats, combining a novel protein of duck with peas, an easily digestible carbohydrate source. The new formula is designed to improve medicine compliance for the millions of dogs and cats in the US who suffer from food allergies. (company press release)
> AgraQuest announced the launch of Sympatic, a microbial growth promoting feed additive for poultry. The product is based on the company’s patented active ingredient Bacillus subtilis strain QST 713. The product’s formulation is heat and pressure tolerant, making it easily incorporated into feed, in the same was as other conventional treatments. (Animal Pharm) 
> Prionics announced it has acquired the tuberculin business of Lelystad Biologicals B.V., a company of Wageningen University and Research Centre, the Netherlands.  Financial terms were not disclosed. (PRNewswire)
> ParaCo Technology Ltd. announced that it has signed an international licensing agreement with deVGen NG to access a range of small molecules that could allow development of active ingredients for new animal health products.  ParaCo Technology aims to discover new molecules that have a good likelihood of combating parasites that are increasingly resistant to existing products. (Voxy)
> DAD’S Pet Care announced the acquisition of ARKAT Nutrition, a highly diversified animal feed manufacturer.  As a result of the purchase, ARKAT Nutrition will now become ARKAT Animal Nutrition LLC, a wholly owned subsidiary of DAD’S Pet Care. Terms of the transaction were not disclosed. (Feedstuffs) 
> North American Pet Products announced it has acquired the assets of Casco Group Inc. Casco Group, Inc. was established in the USA in 1983 and has grown to become one of the world’s largest manufacturers of retail acrylic aquariums and commercial pet systems. Financial terms were not disclosed. (PETS International)
> Social Media Ventures, Inc. (SMVI) announced that it has commenced distributing online its free drug discount card for pets. The card is exclusively for pet owners and can be used by members of the Company’s social networking site for pet owners, Any individual that purchases prescription drugs for their pet is eligible to use the card. The card was made possible through an agreement signed with management of SMVI and a drug discount card provider. (
> EU  Novartis Animal Health announced the European launch of a new, chewable formulation of Milbemax (milbemycin oxime, praziquantel). With the launch of Milbemax Chewable Tablets the company introduces the first EASYCHEW Technology in the European market. (company press release) 
> MEXICO   ECO Animal Health announced that it has been granted a marketing authorization in Mexico for Ecoheart Chewable Tablets for dogs. Ecoheart Chewable Tablets is the first companion animal product for which ECO has received a marketing authorization in Latin America; further marketing authorizations in the key markets of the region are expected. Financial terms were not disclosed. (RTTNews)
> KOREA – FMD  The Korean Ministry of Food, Agriculture and Forestry has reported an outbreak of foot and mouth disease in cattle. All 185 dairy cattle have been destroyed, and the farm has been quarantined. (Animal Pharm)
> ISRAEL – NEWCASTLE DISEASE   An outbreak of Newcastle disease in Israel has killed 1,000 broiler chickens and led to the culling of another 134,000. The disease was only detected in one of four poultry houses, but the birds in all four houses have been destroyed as a preventive measure. Health authorities have also established surveillance and quarantine areas within a 10-km radius from the source of the outbreak. (Animal Pharm)
> US – FDA BUDGET  The US FDA is requesting $4.03 billion to promote and protect public health as part of the President’s fiscal year 2011 budget, a 23% increase over the agency’s current budget. The budget request reflects the FDA’s resolve to transform food safety practices ($318 million), improve medical product safety, protect patients and modernize FDA regulatory science to advance public health. Funding in the FY 2011 request also supports new regulatory authority to regulate cigarettes and other tobacco products received in June 2009. (FDA news release)
>  US – AGRICULTURE FUNDING   USDA’s National Institute of Food and Agriculture (NIFA) announced $24 million in grants to study animal heath, reproduction, breeding, genetics and nutrition. NIFA awarded these grants through four program areas of the Agriculture and Food Research Initiative (AFRI): Animal Reproduction Program; Animal Genome, Genetics, and Breeding Program; Animal Growth and Nutrient Utilization Program; and Integrated Solutions for Animal Agriculture Program. (NIFA News Room)
> US – PET FOOD VARIATION   The Cummings School of Veterinary Medicine at Tufts University conducted a recent study on 100 commercially available weight management diets and found that information on the back of the petfood bags may not be reliable information.  A wide variation existed in recommended calorie intake, kilocalories, and cost for diets marketed for weight loss in pets, which could contribute to challenges of achieving successful weight loss in pets. The study was published in the Journal of the American Veterinary Medical Association. (Petfood Industry)

Brakke Consulting has published the 2009 Distributor Effectiveness Study.
The 100-page report is based on a November 2009 quantitative survey of over 900 companion animal veterinarians nationally. The report provides information about practice demographics and purchasing practices, regional and national distributor market shares, and performance ratings for 29 distributor attributes.
The 2009 Distributor Effectiveness Study is available from Brakke Consulting for $28,500.  For more information, contact Jay Lockhart, or visit  
Those reporting their year end financials this week continued to reflect the difficulty of the animal health marketplace in 2009.  Had there not been significant price increases in late 2008 and early 2009, the gross revenue numbers would have been even more negative.  It’s our reading that unit volume in almost all categories declined in 2009.  Will 2010 be any better? 
As we prepare for the WVC in Las Vegas, we are reminded that new product introductions at NAVC seemed to be at an all-time low.  It appears to us that there are two major drivers related to the small number of new products.  First, most companies have reduced their R&D budgets the past few years as evidenced in the recent Animal Health Institute report.  Second, the process of moving new and generic drugs through the regulatory agencies has almost come to a standstill.  As we’ve mentioned on several occasions, the regulatory process is negatively impacting innovation and investment in new technology for both large and small companies.  It’s difficult to grow or create a market if the portfolio of products is aging!!
Have a great weekend!!

Ron Brakke

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