The Experts in Animal Health

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

Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM, MBA
Brakke news
Pain Management Products report
Market Research Services
earnings news
KMG Chemicals
Smithfield Foods
other news
Nestle Purina
Royal Canin
Santa Elena
Virbac Animal Health
Virbac SA
Warm Whiskers

Pain management is one of the leading topics in veterinary medicine today.  The products represent a substantial market segment with potential still to be tapped. 
Brakke Consulting’s annual report on Pain Management Products for Dogs and Cats includes such valuable information as:
  – overview of acute and chronic pain in small animals
  – review of current products
  – estimates of US sales and prices of leading products
  – pain management products in development
  – review of nutritional supplements used for chronic pain
  – review of therapeutic diets for joint care
  – 2010 survey of an estimated 200 small animal veterinarians regarding use of pain management products
Pain Management Products for Dogs and Cats 2010 can be purchased for $4,995 if ordered by April 2, 2010.  The report will be completed in April.  Questions about the study can be answered by project manager Lynn Fondon, DVM, MBA at 972-243-4033, or email
> KMG Chemicals, Inc. announced financial results for the second quarter ended January 31, 2010. Animal Health generated net sales of $2.4 million, compared to net sales of $2.2 million in the comparable quarter in the prior year. (Business Wire)
> Smithfield Foods reported results for the third fiscal quarter ended Jan. 31. Smithfield’s net income was $37.4 million compared with a loss of ($107.5 million) in the same quarter last year. Sales fell 14% to $2.88 billion, with an extra week in the reporting period account for half the decline. (Meating Place)
> Sanofi-aventis and Merck & Co., Inc. announced that sanofi-aventis has exercised its option to combine Merial with Intervet/Schering-Plough. The new joint venture will be equally owned by Merck and sanofi-aventis.  The entreprise value of Merial has been fixed at $8 billion and the entreprise value of Intervet/Schering-Plough at $8.5 billion, leading to a true-up payment of $250 million to Merck to establish a 50/50 joint venture.  An additional amount of $750 million will be paid by sanofi-aventis, as per the terms of the agreement signed on July 29, 2009.  The formation of this new animal health joint venture is subject to execution of final agreements, antitrust review in the US, Europe and other countries and other customary closing conditions. The completion of the transaction is expected to occur in approximately the next 12 months. (company press release)
> Elanco announced that parent company Lilly has signed an agreement to acquire the European rights to a portfolio of certain Pfizer Animal Health products. The products, including vaccines, parasiticides and feed additives, are used in both the production animal and companion animal markets. The products have been marketed by Pfizer and Wyeth’s Fort Dodge operations. Elanco also will acquire a vaccine manufacturing facility in Sligo, Ireland.  The European Commission requested that Pfizer divest these products as a result of Pfizer’s acquisition last year of Wyeth, including Wyeth’s Fort Dodge Animal Health business. Financial terms were not disclosed. (company press release) 
> Virbac SA announced a strategic alliance in production animal vaccines by taking a 30% shareholding in the Uruguayan production animal vaccine company Santa Elena, with the option to ultimately acquire whole of the capital stock of Santa Elena. Santa Elena will use the solid commercial platform brought by Virbac and introduce its vaccines range in many markets abroad, while the alliance will mark Virbac’s entry into the production animal vaccine market segment. Financial terms were not disclosed. (company website) 
> Virbac Animal Health introduced Allerderm Spot-On, a topical therapy to help repair and restore the epidermal barrier in canine and feline patients suffering from skin disease. Allerderm contains Skin Lipid Complex, an exclusive blend of ceramides and fatty acids similar to those found in normal, healthy feline and canine skin. (dvm360)
> Nestle Purina announced the launch of Purina Veterinary Diets Canine and Feline GI HealthPacks to help achieve fast resolution to troublesome GI issues such as diarrhea, and aid in immune system development. The HealthPacks combine the benefits of highly digestible Purina Veterinary Diets EN Gastroenteric formulas and Purina Veterinary Diets FortiFlora Canine and Feline Nutritional Supplements to promote normal intestinal microflora balance. (dvm360) 
> Royal Canin announced the launch of six new wet canned cat foods based on Macro Nutrient Profile science, which determines a cat’s instinctive preferences. Royal Canin Feline Health Nutrition wet canned formulas can be found at pet specialty retailers throughout the US. (PRNewswire) 
> Warm Whiskers announced the launch of the new Pet Therapy Jacket. The jackets support warm moist heat and cold compress packs to apply directly to the animal’s spine, limbs, and cervical areas. (company press release)
> UK  CEVA Animal Health announced it has added to its joint care range with the UK launch of Meloxidyl (meloxicam) Injection to help control post-operative pain in cats and dogs and alleviate musculoskeletal pain in dogs. (
> CANADA – BSE   The Canadian Food Inspection Agency (CFIA) has officially confirmed a case of BSE in a 72-month old Alberta beef cow. The cow tested positive for BSE on February 25; no part of the animal’s carcass entered, the human food or animal feed systems. (TradingMarkets)
> US – REGENERATIVE MEDICINE   A new professional organization, the North American Veterinary Regenerative Medicine Association, has been launched as the result of a recent international conference, co-sponsored by UC Davis, which focused on the use of stem cell therapy and regenerative medicine to treat horses and other animals. The new North American Veterinary Regenerative Medicine Association will be dedicated to advancing the science and clinical application of non-embryo-derived stem cell therapies and regenerative medicine techniques that use stem cells derived from other sources. (UC Davis)
Market Research Services

Throughout the year, Brakke Consulting, Inc., performs market research surveys and studies for client companies.  If your firm needs help assessing the feasibility of a new product or technology, identifying the opinions and trends of product consumers, or determining the current market for products, Brakke Consulting, Inc. can build a market study to meet your needs.  We have a database in place of several thousand veterinarians and the ability to custom-tailor surveys of other animal health consumers.  We also produce syndicated studies in specific animal health market areas.  
Further information can be found at our website or by calling our Dallas office at 972.243.4033.
Well it’s finally official!!  The future Merial will have sales in the $5 billion range unless regulatory groups require significant segments of the combined businesses to be divested.  This will give Merial approximately 27% of the estimated $18.5 billion global animal health market.  The combination will provide Merial with significant market shares in all the major product categories in all species. When the merger is completed, the two leading companies including Pfizer Animal Health will hold approximately 45% of the market.
So, 2010 will be another year of waiting and speculation.  What will the combined companies need to spin-off?  Who will purchase those assets?  How will other companies respond to the new realities of the marketplace?  Will the consolidations cause significant changes in distribution policies?  Right now, there are more questions than answers, so it will be an exciting time.
Have a great weekend!!
Ron Brakke

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For more information about Brakke Consulting’s services and syndicated studies, visit our website at
Brakke Consulting, Inc.
2735 Villa Creek, Suite 140
Dallas, TX  75234    USA

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