The Experts in Animal Health

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Brakke Consulting’s
Animal Health News & Notes for November 4, 2011
Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM MBA
Brakke news
Flea & Heartworm Markets report
earnings news
Butler Schein
VCA Antech
other news
Industrias Bachoco
Kinetic Technologies
OK Industries
Brakke Consulting will soon be publishing our 2011 report on the US Flea Control and Heartworm Markets.  The report includes valuable information on the US market for small animal parasiticides including:
  – discussion of the impact of generic fipronil products
  – an overview of the veterinary and OTC flea control markets
  – Product descriptions, prices, and sales for the leading veterinary flea and heartworm products
  – 2011 survey of over 200 veterinarians
  – ALL NEW: For the first time, the report will include a survey of 500 pet owners regarding their usage of flea control products
The report on the US Flea Control & Heartworm Markets will be available for a purchase price of $6,995 if ordered by WEDNESDAY, NOVEMBER 23, and $7,500 after that date. 
Please contact Dr. Lynn Fondon at (972) 243-4033 or to pre-order the report, or for more information visit our website at
> Pfizer Inc. reported financial results for third-quarter 2011. Animal Health unit revenues increased by 21% to $1,041 million in comparison with the same quarter last year, reflecting the positive operational impact of 10% due to the addition of legacy King products, as well as the favorable conditions in global livestock markets and foreign exchange. (company press release)
> Merck reported results for the third quarter of 2011.  Animal health revenues were $826 million, a 20% increase compared to the third quarter of 2010. (company website)
> Sanofi reported results for the third quarter of 2011.  Merial sales were EUR 470 million ($645 million), a decrease of 5% reflecting the generic competition for Frontline Plus in the US. (company website)
> Henry Schein, Inc. reported record financial results for the quarter ended September 24, 2011. Butler Schein Animal Health sales increased 9% to $247 million. (company press release)
> MWI Veterinary Supply, Inc. announced financial results today for its fourth quarter ended September 30, 2011. Total revenues were $421 million, an increase of 17% over the fourth quarter of 2010. Net income was $10.0 million, 14% higher than net income for the same period in the prior fiscal year. (company website)
> VCA Antech, Inc.  reported financial results for the third quarter as follows: revenue increased 7% to a third quarter record of $385 million; net income was $30.2 million. Animal Hospital revenue in the third quarter of 2011 increased 10% to $303 million, driven by acquisitions made in the past twelve months and adjusted same-store revenue growth of 1%. Laboratory revenue in the third quarter increased 2% to $79 million. (company press release)
> Balchem Corporation reported results for the third quarter of 2011. Sales of the Animal Nutrition & Health segment, including specialties, choline and industrial derivative product sales, totaled $51.2 million, an increase of 21% from the prior year comparable quarter. (MarketWatch)
> Bayer Animal Health GmbH and AgraQuest, Inc. announced that they have agreed to expand their collaboration and will allow Bayer to become the exclusive distributor of AgraQuest’s Bacillus subtilis QST 713 in selected countries for poultry applications. The product that will be distributed under the agreement will be Baymix Grobig BS. (MarketWire)
> Kinetic Technologies announced the launch of Kinetic Vet EquiShield CK Shampoo, an antiseptic solution for topical management of skin conditions in horses. Kinetic Vet products are available exclusively from veterinarians. (company press release) 
> Mexico’s leading producer and processor of poultry products, Industrias Bachoco has reached an agreement to acquire OK Industries, a privately-owned US poultry company. OK Industries’ total annual sales are approximately $600 million. This marks Bachoco’s first international acquisition and the company’s entry into the US market. Financial terms were not disclosed. (Veterinary Advantage – World Poultry) 
> AUSTRALIA – NEMATODE RESEARCH  An international team of scientists led by researchers from The University of Melbourne have sequenced the genome of the common swine roundworm (Ascaris suum). The results appear in the current issue of Nature. (AVMA SmartBrief –
> US – SALMONELLA TESTING   The FDA recently launched a national initiative to collect and analyze samples of pet foods, pet treats and other pet supplements for Salmonella contamination.  The objective of the new surveillance program is to determine the prevalence of Salmonella in selected pet products and to remove any affected products from the market. FDA’s Center for Veterinary Medicine says it is concerned about animal feeds serving as “vehicles for transmitting pathogenic and antibiotic-resistant bacteria to humans and other animals. Samples will be collected between October 2011 and September 2012.  (DVM360)
Reporting companies this week continued to send a mixed message.  The revenue volumes are impressive by the distribution companies; however, manufacturer’s revenues appear to be less positive when the numbers are adjusted for acquisitions and currency changes. 
We believe the mixed results reflect some of the changes occurring in the marketplace in both the companion and food animal segments.  The introduction of generics in both food and companion animal is having an impact on manufacturer revenues.
Unfortunately, we’re not hearing a lot of positive impact from the introduction of new products or services.  Is this because there are too few new products to significantly impact the revenue numbers positively?  Hopefully, companies won’t reduce their budgets in the research and development areas in 2012.  Innovation and new products are needed for growth in the marketplace.
The pheasant hunting report for last weekend was positive.  While the group did not limit out each day, we were above the average number of birds when compared to other hunters in the area.  Like the animal health market, pheasant hunting in 2011 has been interesting and challenging!!  We’ll take one more run at it this weekend and then return to Dallas.
Have a good weekend!!
Ron Brakke

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