The Experts in Animal Health

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Brakke Consulting’s
Animal Health News & Notes for September 14, 2012
Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon DVM MBA
Brakke news
transaction assistance
earnings news
Del Monte
other news
Kinetic Technologies

Let Brakke Consulting provide assistance for all your animal health transactions.

In the past few years, Brakke Consulting has been the finder of record, agent of record or consultant for a number of successfully completed projects. We assist with valuations and provide due diligence on confidential transactions as well as offering executive counsel on a number of potential transactions.

Brakke Consulting has the experience, insight, ability and contacts to provide clients with the highest quality services in the animal health, pet, veterinary and specialty chemicals markets. Please contact any of our offices for a confidential consultation. 
> Bioniche reported results for the full fiscal year 2012. Animal health revenue for the year was C$29.8 million (US$30.6 million), an increase of 9% compared to the prior year. (Australian Life Scientist)
> Ridley Inc. reported its financial results for the year ended June 30, 2012. Revenue for the year was $650 million, an increase of 10% compared to the prior year. EBITDA for the twelve months of fiscal 2012 was $27.1 million compared to $25.8 million for the same period last year. (company website)
> Del Monte Foods reported net sales for the first quarter fiscal 2013 ended July 29. Pet Products net sales were $458 million, an increase of 9% from the prior year period. (company website)
> Genus reported financial results for the full year ended June 30, 2012. The company reported a pre-tax profit of GBP 46.5 million ($74 million) on sales of GBP 342 million ($544 million) compared to an adjusted GBP 39 million and GBP 320 million in the previous twelve months, respective increases of 22% and 12%. (Animal Pharm)
> Bayer HealthCare LLC and Teva Pharmaceutical Industries Ltd. announced that they have signed an agreement in which Bayer will acquire the US based animal health business of Teva for up to $145 million. The purchase price includes an upfront payment of $60 million  plus a total of $85 million in milestone payments, which are linked to the successful and timely achievement of manufacturing and sales targets. (PR Newswire)
> Perrigo Co. announced it has agreed to acquire assets of Sergeant’s Pet Care Products Inc., for about $285 million in cash. Perrigo expects Sergeant’s to generate sales of over $140 million for the year ending September 30. The deal is valued at $235 million net of certain tax benefits. The company expects to receive a significant tax benefit from the transaction. The company estimates net present value of this tax benefit to be roughly $50 million. (istockanalyst)  top
> Kinetic Technologies announced the launch of Vetasan Shampoo and Vetasan HC Shampoo. Vetasan Shampoo features 4% chlorhexidine gluconate and is a full strength antiseptic shampoo; Vetasan HC Shampoo contains 1% hydrocortisone in addition to 4% chlorhexidine gluconateto create a full strength anti-inflammatory, antiseptic and deep cleansing shampoo. (company press release) 
> ImproMed announced the addition of the ImproMed All-In-One PC to its hardware lineup.  The All-In-One PC features a 23” touchscreen, an Intel processor, and Bluetooth capability. (company press release)
> UK  Animalcare Group announced the UK and Irish launch of Vitofyllin (propentofylline), a central nervous system stimulant for older dogs suffering from dullness, poor demeanor and an unwillingness to exercise. (Animal Pharm)
> US – ANIMAL WELFARE   The US District Court for the Central District of California has upheld the constitutionality of Proposition 2, the California ballot measure enacted in 2008 regulating the housing of egg-laying hens, breeding pigs and veal calves. The court rejected a challenge to the ballot measure filed by a California egg producer earlier this year. In upholding the measure, the court concluded that “Proposition 2 establishes a clear test that any law enforcement officer can apply, and that test does not require the investigative acumen of Columbo to determine if an egg farmer is in violation of the statute.” The court further stated that, “the mere fact that plaintiff dislikes or disagrees with the policy or language of Proposition 2 is not sufficient to sustain a Constitutional challenge.”  (Feedstuffs)
> AUSTRALIA – BSE   A simple blood test for Creutzfeldt-Jakob Disease and bovine spongiform encephalopathy (BSE) is a step closer, following a breakthrough by medical researchers at the University of Melbourne in Australia. Researchers discovered that cells infected with prions release particles which travel in the blood stream and contain easily recognized “signature genes,” making a diagnostic blood test a possibility. The research is published in this week’s Oxford University Press Nucleic Acids Research journal. (Feedstuffs)
The week’s news brings a couple of things to mind. First, the companion animal portion of the business continues to attract investor and investment attention. The sale of Sergeant’s Pet Products to a company not involved in the animal health or pet industry to this point demonstrates again that attractiveness of this market. While there has been a slowing revenue growth the past few years in companion animal, it is still growing faster than many other industries. We see no reason for this to change in the near future.
Another item was the continued growth of the pet products business of Del Monte Foods this past quarter. The two companies mentioned above focus most of their marketing attention to the OTC portion of the pet business. As noted in a number of studies and articles the past couple of years, pet owners’ purchasing behavior and buying habits are changing. Those companies with products participating only in the veterinary portion of the pet business need to continue to evaluate their strategy in the face of these changes.

Have a great weekend!!
Ron Brakke
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