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Brakke Consulting’s
Animal Health News & Notes for August 1, 2014

Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon DVM MBA
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Pet Pharmaceutical Market Shift Study
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Ceva (Salmune)
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Veterinarian Recommended Nutriceuticals
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> Merck announced financial results for the second quarter of 2014. Animal Health revenues were $872 million, a 2% increase compared to the second quarter of the prior year. Excluding the impact of the Zilmax sales suspension, Animal Health sales increased 9% in the second quarter. (company website) 
> Sanofi reported results for the second quarter of 2014. Revenues for animal health division Merial were EUR 537 million ($719 million), an increase of 2% compared to the second quarter of 2013. Merial’s operating income was EUR 136 million ($182 million), an 8% increase compared to the prior year comparable quarter. (company website)
> Bayer reported financial results for the second quarter of 2014. The company reported Animal Health sales of EUR 358 million ($480 million) for the quarter, a decrease of 1% compared to the second quarter of 2013. At constant currencies, revenues grew by 5%. (Animal Pharm) 
> Vetoquinol Group posted results for the first half of 2014. Sales were EUR 149 million ($203 million), up 3% compared to the first half of 2013. Sales growth was particularly strong in the second quarter at 9%. At constant exchange rates, first half sales increased 6%. Net income Group share increased by 4% to EUR 10.4 million ($14.2 million). (company website) 
> Heska reported results for the second quarter of 2014. Consolidated revenue was $23 million, an increase of 25% compared to the second quarter of 2013. Net income for the quarter was $778,000 compared to a net loss of ($2.5) million in the comparable quarter in the prior year. (company press release) 
> Colgate-Palmolive Company reported results for the second quarter of 2014. Hill’s Pet Nutrition net sales increased 2% during second quarter 2014 to $560 million. Unit volume decreased 1.5% with 4.0% higher pricing and 0.5% negative foreign exchange. (company website) 
> MWI Veterinary Supply announced financial results for its third quarter ended June 30, 2014. Total revenues were $778 million for the quarter, 28% higher than revenues for the same period in the prior fiscal year. These results include the impact of the acquisition of IVESCO Holdings, LLC on November 1, 2013. Net income was $19.4 million for the quarter, 15% higher than net income for the same period in the prior fiscal year.(
> Nutreco reported results for the first half of 2014. Sales increased 2.6% to EUR 2.46 billion ($3.33 billion) for the first half of 2014. Animal nutrition earnings increased by 5% to EUR 60 million ($81 million), while fish feed earnings before tax increased by 24% to EUR 44 million ($59 million). (Animal Pharm)  
> Spectrum Brands Holdings reported results for its fiscal 2014 third quarter ended June 29, 2014. The Global Pet Supplies segment reported net sales of $152 million, a decline of 3% from the comparable period in the prior year due primarily to lower aquatics sales in both North America and Europe. (Business Wire) 
> ECO Animal Health Group plc reported results for the full year ended March 31, 2014. Group sales rose by 10%to GBP 32 million ($53 million). Full-year pre-tax profit was GBP 3.68 million ($6.1 million) compared to GBP 3.31 million reported in 2013. (RTTNews) 
> Hester Biosciences reported results for the first quarter of 2014. Sales rose by more than 40% to INR233 million ($3.9 million) during the first quarter of the year. (Animal Pharm) 
2014 KC Animal Health Corridor Homecoming Dinner
Monday, August 25, 2014
Kansas City Convention Center

Connect with 800 animal health industry professionals and join the Corridor in honoring this year’s Iron Paw Award recipient, Ron Brakke. Hear from Bill Self, head coach of the University of Kansas men’s basketball team, as he unveils some of the secrets behind his winning record, teamwork and the principles of success. The event will be held on Monday, August 25 from 5 – 9 p.m. at the Kansas City Convention Center Grand Ballroom.

Visit  for full details and registration. 
> Merial announced the launch of Purevax Feline Rabies 3 YR, the first nonadjuvanted feline rabies vaccine with a three year duration of immunity (DOI). (Animal Pharm)
> Ceva Animal Health announced the launch of Salmune TEK, an inactivated polyvalent poultry vaccine that offers protection against three of the most common strains of Salmonella. Salmune TEK can be applied both subcutaneously and intramuscularly. (company press release) 
> Ceva Animal Health announced the launch of its equine division. The company’s equine product catalog includes Altresyn (altrenogest), an oral solution formulated to suppress estrus in mares; ConfidenceEQ, a nostril gel designed to reduce stress; and Tildren (tiludronate disodium), which is used in the treatment of bone- and cartilage-related lameness. (Vet Advantage)
> Abbott’s Animal Health division announced the FDA has approved Simbadol (buprenorphine injection), the first and only FDA-approved opioid analgesic for cats to provide 24-hour pain control in a single dose. (company press release) 
> Parnell Pharmaceuticals Holdings Ltd announced it has licensed two compounds from CIMTECH Pty Ltd. The compounds now known as PAR 121 and PAR 122 have shown promise in bone regeneration and dermal regeneration, respectively. Parnell has received a license to develop the compounds for the veterinary market with the potential to also seek human drug approvals. (PRNewswire) 
> Vetrin Medical, Inc. a new company entering the North American veterinary market, announced the official launch of Oralade, the first product specifically developed for “Day 1” use in critical care patients. Oralade contains essential amino acids, electrolytes and glucose (in purified water) with a natural chicken flavor. Vetrin Medical, Inc. has retained exclusive rights for Oralade in the US and Canadian markets from the European nutritional company JAM Animal Health. (Vet Advantage)
> Veterinarian Recommended Nutriceuticals (VRN) announced the launch of their first nutriceutical, Canine mega Benefits. (PRNewswire)  
> Valneva SE announced the signing of a research collaboration and license agreement with a leading global animal health care company to discover antibodies from animal B-lymphocytes using Valneva’s proprietary VIVA|Screen technology. (company press release) 
> CHINA  Zoetis Inc. announced the introduction of on-farm cattle health screening tests for sub-clinical mastitis and ketosis for the dairy industry in China. The test kits, which have been used in the US and Europe for several years, are manufactured by and imported from PortaCheck, Inc. (Feedstuffs)
> MEXICO/BRAZIL  Tyson Foods Inc. announced that it has reached a definitive agreement with JBS SA to sell its poultry businesses in Mexico and Brazil. The transaction is valued at $575 million and will be paid for in cash. (Feedstuffs) 
JULY 25-29, 2014

The AVMA Convention was held this week in Denver, Colorado and boasted more than 8,300 attendees, including nearly 4,000 veterinarians and 1,300 exhibitors. The conference offered over 1,000 Continuing Education  sessions and showcased the AVMA’s Animal Connections traveling exhibit.
> POLAND – AFRICAN SWINE FEVER After a series of cases affecting wild boar, Poland has confirmed its first outbreak of African Swine Fever (ASF) in pigs on a small farm close to the country’s border with Belarus. The Polish agriculture ministry said tests revealed the presence of the disease in a holding of five pigs. This is the first time ASF has been detected on a Polish pig holding. (Animal Pharm)
> UK – DISEASE DATABASE The world’s largest database of animal and human diseases, which could potentially be used to prevent and tackle outbreaks, is being constructed by researchers at the University of Liverpool. The Enhanced Infectious Diseases (EID2) database has been developed by Liverpool University’s climate and infectious diseases of animals team. It is funded by a UK Biotechnology and Biological Sciences Research Council grant. The database is open-access, allowing registered researchers to use it. (Animal Pharm)


Where pet owners go to purchase veterinarian-prescribed medicines is beginning to change as new distribution models and proposed legislative measures are evolving to give consumers more choice. A new report by Brakke Consulting, Inc. and Trone Brand Energy will define how this change of the pet pharmaceutical industry will affect manufacturers, distributors, retailers and veterinarians once a critical mass of consumers begin to adopt new models.

The study will be completed before the end of 2014. For more information, or to purchase the study at a discounted rate, contact David Goodnight at 830-285-1259 or by August 8, 2014.
Most of the companies reporting this week continue to demonstrate a softness in the business in the first half of 2014. The revenue and profit reports continue to support our views that the market is experiencing a reset, which will continue the balance of the year. Those companies with new products and/or acquisitions appear to be outperforming others.
We believe that there is some continued softness in the companion animal sector with increasing revenue in the food animal sector; this trend is likely to continue for the balance of 2014. Companies involved in the 2015 planning process should closely watch the trends impacting the marketplace both positively and negatively.

It was great seeing many of you at the AVMA meeting in Denver this past week. The meeting was well attended and floor traffic seemed reasonable.

Have a great weekend!

Ron Brakke
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