The Experts in Animal Health

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Brakke Consulting’s
Animal Health News & Notes for October 22, 2010

Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM MBA
Brakke news
earnings news
PetMed Express
VCA Antech
other news
Dechra Veterinary Products
Digital DVM
Phillips Feed and Pet Supply
Super-Dog Pet Food
> Eli Lilly reported results for the third quarter of 2010.  Worldwide sales of animal health division Elanco were $353 million, an increase of 12% compared with the third quarter of 2009. US sales grew 12%, due primarily to increased sales of Comfortis. (company press release)
> Virbac SA reported results for the third quarter of 2010.  Net sales for the quarter were EUR 154 million ($210 million).  The combination of a 13% internal growth with the addition of the product ranges acquired from Pfizer in Australia early this year and the weakening of the euro resulted in a 26% growth rate in the third quarter. (company website) 
> Vétoquinol SA reported results for the third quarter of 2010.  The company generated revenues of EUR 69 million ($94 million) in the third quarter of 2010, an increase of 11% compared with the same period in the preceding year, or 5% when exchange rates are held constant. Sales for companion animal and livestock products increased by 9% and 13% respectively. (company website)
> IDEXX Laboratories, Inc. reported that revenues for the third quarter of 2010 increased 4% to $270 million. Net income for the quarter increased 10% to $34.7 million. Companion Animal Group (“CAG”) revenues for the third quarter of 2010 increased 4% to $223 million. (company website)
> Nestle reported results for the nine months ended September 30, 2010. Pet Care revenues were CHF 9.66 billion ($10.0 billion), an increase of 4% compared to the nine-month period in the prior year. (company website)
> PetMed Express, Inc. announced its financial results for the quarter ended September 30, 2010. Net sales for the quarter were $61 million, compared to $62 million for the quarter ended September 30, 2009, a decrease of 2%. Net income was $5.0 million for the quarter, compared to net income of $6.3 million for the quarter ended September 30, 2009, a 21% decline. (company website)
> VCA Antech, Inc. reported that revenue increased 6% to a third quarter record of $359 million for the third quarter ended September 30, 2010. Animal Hospital revenue in the third quarter increased 8% to $277 million driven by acquisitions made in the past twelve months; Laboratory revenue in the third quarter decreased 1% to $77 million; Medical Technology revenue in the third quarter increased 31% to $17 million. Net income for the quarter was $28.6 million, a decline of 24%. (company press release)
> Teva Animal Health announced that it has upgraded its manufacturing facility in St. Joseph, resulting in a new state-of-the-art work center for the manufacture of Oral Liquid Drug products and shampoos, otics, flushes and sprays as well as improvements in the Aseptic Processing area. While the facility is not yet manufacturing product, the FDA has authorized Teva Animal Health to ship product that is manufactured and tested by a third party; the company shipped its first product on October 1. (company press release) 
> Dechra Veterinary Products announced the acquisition of DermaPet’s worldwide veterinary business for a maximum cash consideration of $64 million. $42 million was paid upon acquisition, with future payments contingent upon attaining certain revenue goals. DermaPet achieved revenues of $10.7 million in 2009.  (company press release)
> Hill’s Pet Nutrition announced the launch of the Hill’s Prescription Diet Therapeutic Weight Reduction Program. The program combines pre-measured clinically proven Hill’s Prescription Diet r/d Canine Weight Loss-Low Calorie Dry pet food, low-calorie biscuits and a Therapeutic Weight Reduction Guide. It also utilizes the body fat index (BFI) scoring system, the next evolution of the body condition score (BCS). (company press release)
> Digital DVM announced the launch of GroupDVM, an online veterinary buying group that maximizes the purchasing power of the independent veterinary professional by providing exclusive deals directly from animal healthcare manufacturers and authorized distributors. More than 3,000 veterinary clinics have joined GroupDVM to-date. (company press release)
> Phillips Feed and Pet Supply announced it has acquired distributor Super-Dog Pet Food Co.  The newly formed organization will offer a wide variety of pet foods and pet supplies along with specialty services to customers throughout the pet industry. Phillips Feed and Pet Supply currently operates three distribution facilities in Pennsylvania, South Carolina and Florida; Super-Dog Pet Food Company operates two facilities located Pennsylvania and Massachusetts. Financial terms were not disclosed. (Pet Business)
Since 1986 Brakke Consulting, Inc. has successfully assisted many clients in acquiring exceptional employees at all levels, in the many departments of animal health, pet, veterinary and specialty chemical companies.   We pre-qualify candidates, allowing clients to choose from a few of the best applicants for a position.  Our approach increases the efficiency and effectiveness of the Human Resources Departments of client companies.
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> EU – CLONING   The European Commission has reportedly given the green light for member states to sell the offspring of cloned animals and their products into the food chain. The Commission said a ban “would not be justified on grounds of protecting animal welfare, animal health or public health in so far as there are no welfare concerns for the offspring of clones.” (
Interestingly enough, many companies continue to report double-digit growth over prior year in 2010.  In some cases the revenue growth numbers include the consolidation of recent acquisitions or mergers.  We’ve also noted that most of the public and private animal health distributors are also reporting double digit growth. 
As I mentioned in a recent industry presentation, one of the measures we use for the industry growth is the recruiting activity.  Currently, a number of companies are adding headcount in sales, marketing, technical services and other areas.  We believe this demonstrates a confidence that management has in the state of the industry.   
We had some success last weekend in finding the ringneck pheasants located in central South Dakota. The heavy rains this summer and fall have created some new challenges that favor the birds versus the hunter.  A lot of cover and water creates an environment where hunters get all the exercise they need in 3 or 4 miles of walking the fields.  Current score: Hunters 61 Pheasants 100+.  We’ll try again this weekend.
Have a great weekend!!
Ron Brakke

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