The Experts in Animal Health

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Brakke Consulting’s
Animal Health News & Notes for February 12, 2010

Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM, MBA
Brakke news
2010 Industry Overview
earnings news
Spectrum Brands
other news
Centaur Services

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 is closed. To register, please call 972.243.4033 or register onsite to attend. Payment by major credit card is required at time of registration.
> Sanofi-aventis reported results for full-year 2009. Net sales for animal health division Merial were $2,554 million, down 3% from the prior year. Sanofi said it was “highly probable” it would exercise its option to expand its Merial business to a joint venture with Merck’s Intervet/Schering Plough and a decision would be made in the coming weeks. (Reuters, company website)
> Phibro Animal Health Corporation reported results for its first six months of fiscal 2010. Animal Health and Nutrition sales for the half-year grew 14% to $248 million. (RTTNews) 
> Bioniche Life Sciences Inc. announced financial results for its fiscal 2010 second quarter, ended December 31, 2009. Consolidated revenues for the quarter totalled $13.8 million, an increase of 62% over the same period in fiscal 2009.  This positive result is attributed to the receipt of the first milestone payment of $6.4 million to the Company from Endo related to an achievement under a licensing agreement. (company website)
> Ridley Inc. reported its financial results for the second quarter of fiscal 2010 ended December 31, 2009.  Revenue of $150 million in the second quarter of fiscal 2010 was lower by 8% from the same period last year.  The company earned $5.0 million after income taxes compared to $0.7 million last year. (company website)
> Spectrum Brands announced financial results for its first quarter of fiscal 2010 ended January 3. Net sales for the Global Pet Supplies segment were $137 million, compared to $132 million for the first quarter of fiscal 2009. Strong sales of Dingo, Nature’s Miracle and consumable aquatics products were the major drivers of growth. (Business Wire)
> Bayer Animal Health announced that in March 2010 it will expand its sales channel and begin selling Advantage Topical Solution for dogs and cats and K9 Advantix directly to pet specialty retailers and pet specialty Internet sites to remain competitive in a rapidly changing business environment. Bayer also announced it will launch a multi-million dollar national, consumer print advertising campaign promoting the importance of veterinary visits as well as a “March Back In” $20 pet owner rebate program designed to drive return visits to veterinary clinics. (company press release)
> Tyson Pet Products, a division of Tyson Foods, announced it has launched 100% natural “True Chews” dog treats, including ham bone, chicken fillet, pork ear and beef bully steak. This marks the company’s first foray into making finished, retail-ready pet treats. (Meating Place)
> Sergeant’s Pet Care Products, Inc. announced the launch of Petrodex Ultra Advanced Veterinary Cleaning Paste and Petrodex Tooth-Hugger Toothbrush. The Petrodex Tooth-Hugger Toothbrush is currently available in pet specialty stores, and the Petrodex Ultra Advanced Veterinary Cleaning Paste will be available in pet specialty stores in April 2010. (PRNewswire) 
> UK   MWI Veterinary Supply Inc. announced that it has acquired Centaur Services Limited, a supplier of animal health products and services to veterinarians in the United Kingdom. The transaction is valued at approximately $47 million. Centaur has a distribution center located in Somerset, England and had total revenues of approximately GBP 140 million ($220 million) in 2009. (CNN Money)
> HUNGARY   Ceva announced the opening of a new vaccine plant in Hungary. The new facility will produce innovative aerobic and anaerobic new bacterial vaccines for Ceva’s growing global demand. The EUR 8.5 million plant takes combined investment in the Budapest campus to over EUR 28 million since the program began in 2002. (company press release)
> EU   Kemin Industries announced that the European Commission has approved the use of Clostat by poultry producers.  Clostat contains a novel PB6 strain of Bacillus subtilis and is indicated against Clostridium perfringens infection. It helps to maintain a balanced microflora in the gastrointestinal tract, reducing mortality and lesions due to necrotic enteritis. (Animal Pharm)
> ASIA – AVIAN INFLUENZA   Myamnar, Nepal and Cambodia have all reported outbreaks of highly pathogenic avian influenza in the first few days of February, according to the World Organization for Animal Health (OIE). Little information about the outbreaks is available. In Myamnar, the deaths of 100 birds on a farm led authorities to examine the animals, confirming the presence of the H5N1 virus. The remaining 2,355 birds have been culled to prevent the spread of the virus. In Cambodia, 31,000 animals were reported to be infected, of which more than half (16,442) having died. In Nepal, backyard ducks and chickens and a few birds on commercial farms, totalling 153 animals, died after contracting H5N1. (Animal Pharm)
> US – ANIMAL IDENTIFICATION   The USDA has killed its beleaguered National Animal Identification System (NAIS) in favor of developing “a new, flexible framework for animal disease traceability in the US.”  The framework will apply only to animals moved in interstate commerce; be administered by the states and tribal nations to provide more flexibility; encourage the use of lower-cost technology; and be implemented transparently through federal regulations and the full rulemaking process. (Beef Magazine)
> US – DEER CONTRACEPTIVE   The US EPA approved the use of GonaCon, a contraceptive vaccine, in female white-tailed deer. GonaCon is a single-shot, multiyear vaccine developed by the USDA Wildlife Services’ (WS) National Wildlife Research Center (NWRC) which stimulates the production of antibodies that bind to the gonadotropin-releasing hormone (GnRH) in the animal’s body, decreasing sexual activity. It is registered as a restricted-use pesticide, being only available to USDA-WS staff or state wildlife management agency personnel. (Animal Pharm)
There were some interesting announcements this week for our readers to mull over while you’re waiting for it to stop snowing or raining. 
Another major US veterinary distributor announced that they are expanding into the international market. It now appears that sometime in the future we’ll have a several global distributors serving the major international animal health markets. 
It was also suggested by sanofi-aventis that there is a “high probability” that it will exercise its option to expand the Merial business by forming a joint venture with Merck’s Intervet/Schering-Plough.  Should that occur and there are no required spin-offs we’d have our first $5 billion company in animal health.  Yes, there will be some spin offs required so they might not reach $5 billion in 2010.  What could this mean for the industry?  Let’s wait until it happens but the one word that comes to mind is more “change”.  Many of you have heard us say in various venues that the recent and pending industry mergers are “game changers”. 
An example of how the market is changing was the announcement by Bayer Animal Health US that in March 2010 it will expand its sales channel and begin selling Advantage Topical Solution for dogs and cats and K9 Advantix directly to pet specialty retailers and pet specialty Internet companies.  Finally, one of the most often-asked questions that have been floating around in the industry has been answered!!  Now we no longer need to speculate!!  
We’ll see many of you in Las Vegas at the Western Veterinary Conference.  Have a good weekend, travel safe and stay warm!!

Ron Brakke

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