The Experts in Animal Health

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Brakke Consulting’s
Animal Health News & Notes for August 9, 2013
Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon DVM MBA
Brakke Consulting news
earnings news
Central Garden & Pet
Henry Schein
Orion Pharma
Spectrum Brand Holdings
other news
Ceva (poultry)
Ceva (pet supplements)
Cyton Biosciences
Pet Food Experts
Shotwell & Carr
Tyson Foods
Zeus & Company
Zoetis Jilin Guoyuan Animal Health
2013 KC Animal Health Investment Forum
Tuesday, August 27, 2013
Kansas City Convention Center

The fifth annual KC Animal Health Investment Forum will feature more than a dozen presenting companies seeking business partnerships and opportunities. Hear about the latest up-and-coming pharmaceutical, biological and diagnostic innovations, with applications serving the companion animal, livestock, equine markets and more.

The event will be held Tuesday, August 27 from 7:30 a.m. to 5 p.m. at the Kansas City Convention Center Grand Ballroom.

Visit for full details and registration.
> Zoetis Inc. reported financial results for the second quarter of 2013. The company reported revenue of $1.11 billion for the second quarter, an increase of 2% from the second quarter of 2012. Revenue reflected an operational increase of 4%, with foreign currency having a negative impact of 2%. Net income for the second quarter of 2013 was $128 million, a decrease of 26% compared to the second quarter of 2012. Adjusted net income for the second quarter of 2013 was $178 million, an increase of 1% compared to the second quarter of 2012. Adjusted net income for the second quarter of 2013 excludes the net impact of $50 million for purchase accounting adjustments, acquisition-related costs and certain significant items. (company website)
> Nestlé S.A. reported financial results for the first half of 2013. Pet Care sales were CHF 5,540 million ($5,860 million), representing organic growth of 7% compared to the first half of the prior year. (company press release)
> Orion Pharma reported financial results for the second quarter of 2013. Animal health revenues increased 24% to EUR 19.8 million ($26.2 million). The quarter was boosted by a 65% increase in sales of animal sedatives to EUR 6.1 million ($8.1 million). (Animal Pharm)  
> Heska reported financial results for the second quarter of 2013. The company reported sales of $18.3 million in the three months ended June 30th 2013, unchanged compared to the same quarter in 2012. Net loss for the quarter was ($2.2 million), compared to net income of $0.2 million during the same period last year. (Animal Pharm)
> Henry Schein, Inc. reported financial results for the second quarter of 2013. Global Animal Health sales were $666 million, an increase of 14%. In local currencies, internally generated sales increased 4% and acquisition growth was 10%. North American Animal Health sales were $326 million, an increase of 10%. (company website) 
> Central Garden & Pet Company reported financial results for the third quarter ended June 29, 2013. Net sales for the Pet segment for the quarter were $238 million, a decline of 12% from the third quarter of 2012, which included the benefit of the initial sell-in of high-margin flea and tick products to a new channel. The Pet segment’s operating income was $33.1 million, down from $40.4 million in the prior year period. (company website)
> Spectrum Brands Holdings, Inc. reported results for the fiscal 2013 third quarter ended June 30, 2013. The Global Pet Supplies segment reported net sales of $156 million for the quarter, a decline of 1% compared to the comparable period last year. (Business Wire)
> Bayer Animal Health announced it has received approval from the FDA to market ProstaMate and OvaCyst, originally produced by Teva Animal Health. ProstaMate (dinoprost tromethamine) and OvaCyst (gonadorelin diacetate tetrahydrate) are for indications in support of reproduction management. ProstaMate is intended for use in cattle, swine and horses, while OvaCyst is for use in dairy cattle. (Animal Pharm) 
> Tyson Foods announced that beginning September 6 it will no longer buy cattle that have been fed the growth enhancer Zilmax due to concerns about cattle with mobility problems delivered to its plants.  According to Tyson’s website, the company has 26% of the US beef market. Merck has expressed confidence that, based on all of the available data on Zilmax, the experience reported by Tyson is not attributable to Zilmax. (Reuters, company press release)
> Ceva Santé Animale announced a strategic alliance with global hatchery equipment manufacturer Ecat. The new partnership will focus on providing poultry producers with critical support in the hatchery, from automated equipment through to vaccines and vaccination. (Animal Pharm)
> Bioniche Life Sciences Inc. announced that it has filed a preliminary short form prospectus in Canada for an equity offering of a minimum of $5 million and a maximum of $7.5 million. The net proceeds from the Offering will be used to support the development of the Company’s Phase III bladder cancer product, Urocidin, and for general corporate purposes. This additional funding will help to ensure that the Company is adequately capitalized as it completes the divestment of its Animal Health business unit. (Wall Street Journal)  
> Luitpold announced that it has revised its target date for Adequan availability. The company now anticipates release of Adequan products to the market beginning in late August, 2013. (company press release) 
> Norbrook Laboratories, Ltd. announced the availability of new Enroflox 100 (enrofloxacin) for the treatment and control of swine respiratory disease. (company press release)
> Jorgensen Laboratories announced it now offers an extensive line of veterinary ophthalmic implants. The implants are made from quality silicone and can be autoclaved. Sizes are available from a kitten up to a horse. (Vet Advantage) 
> Pet Food Experts announced it has acquired Zeus & Company. Financial terms were not disclosed. (
> Felix launched, a directory for connecting consumers with veterinary hospitals to schedule an appointment. The directory was formerly operated as (
> EU-based knoell, which includes veterinary pharmaceutical registration specialist Cyton Biosciences, announced it has acquired Shotwell & Carr, a US-based regulatory service provider. Shotwell & Carr specializes in approvals and registrations for human and veterinary pharmaceuticals and medical devices. Financial terms were not disclosed. (Animal Pharm) 
> CHINA  Joint venture Zoetis Jilin Guoyuan Animal Health announced it has received its first approval for a vaccine. China’s Ministry of Agriculture has approved Rui Lan An, a vaccine designed to control porcine reproductive and respiratory syndrome (PRRS). The vaccine will be launched later this month. (Animal Pharm) 
> UK  Ceva Animal Health announced the launch of a new range of veterinary strength pet supplements for the UK market under its Logic brand. The new Logic range promotes dental hygiene, aids digestive health and helps senior pets with joint and behavioral problems. (Pet Business World News) 
> LATIN AMERICA  Pharmgate LLC announced the acquisition of a number of chlortetracycline product registrations in Latin America. Pharmgate will continue to market the products through the existing distributor network utilizing both commercial and technical synergies. (company press release)
> TURKEY – EQUINE INFLUENZA  Turkey has reported an outbreak of equine influenza, the first case in 17 years. The current case has taken place at the Turkish Jockey Club with 10 horses affected. The source of the infection is not known. (Animal Pharm)
> INDIA – AVIAN INFLUENZA  India has reported two outbreaks of highly pathogenic H5N1 avian influenza (HPAI) to the World Organization for Animal Health (OIE). The outbreaks were reported on a poultry production unit of the College of Veterinary Science and Animal Husbandry and on a government-owned poultry farm. (
> US – HEARTWORM RESISTANCE  The Companion Animal Parasite Council (CAPC) has altered its heartworm prevention and treatment guidelines after evidence of preventive-resistant Dirofilaria immitis strains was presented at the American Association of Veterinary Parasitologists Conference. Researchers have now identified heartworm isolates from the Mississippi Delta region that develop in adult dogs receiving routine monthly heartworm preventives. According to parasitologist Dwight Bowman, Ph.D., “all currently approved products have failed to prevent heartworm development in dogs when tested in experimentally induced infection models with Mississippi River Valley isolates.” These products include ivermectin, selamectin, milbemycin oxime and moxidectin. (DVM360)
> US – BEEF HERD   The Livestock Marketing Information Center (LMIC) has indicated that the beef cow population is likely 2.1% smaller than it was a year ago, and a total beef herd down 1.8% year over year. Beef cow slaughter was down 3.1% year-over-year in the first half of 2013, and is likely to be down for most of the remainder of the year. LMIC projects significantly improved cow/calf sector returns in the latter half of 2013, and potentially record-setting returns in 2014. (Feedstuffs)
Recruiting Means More than Resumes

At Brakke Consulting we find the right person to fit your company’s needs. As part of our executive recruiting services, we manage the entire process of identifying and recruiting top candidates, including:

• Developing metrics to help rank candidates
• Scheduling interviews and arranging for travel
• Maintaining communications with candidates

Our involvement in every step of the process helps maintain communications with candidates, allowing them to ask questions and get another perspective on the company.

For more information about our recruiting services, visit our website or call one of our consultants:
• John Mannhaupt at 972.243.4033
• Ken Berkholtz at 772.223.3079
• Jay Lockhart at 314.821.3368

The reported results for the second quarter continue to exhibit some of the challenges of the marketplace, particularly in the flea and tick area. One of the stories that caught our eye this week was the announcement by Tyson that they will soon stop purchasing cattle that have been treated with Zilmax. This decision by Tyson could move to other packers over time. It also has a major impact on the cost of producing beef for the feedlot operators. When you combine this announcement with the current beef herd inventory reductions in the US, one has to wonder where the price of beef will be by mid-2014. Could beef prices reach the retail level where consumer consumption starts to decline? That would not be good for any of the industry participants!

The announcement from the Companion Animal Parasite Council that there is some evidence of resistance building in some heartworm strains in some parts of the country should be of concern to the companies involved in this important market segment. Is this just the start of a broader resistance issue that could spread to other parts of the US? If nothing else, this report should encourage those researchers and companies looking for new actives or formulations for heartworm control.

Have a great weekend and stay cool!

Ron Brakke
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