Animal Health News & Notes for February 23, 2018

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Brakke Consulting’s
Animal Health News & Notes for February 23, 2018
Copyright © Brakke Consulting, Inc.

Editor: Lynn Fondon DVM MBA
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IN THE NEWS:

Brakke Consulting news
Industry Overview at WVC – last week to pre-register
Recruiting
Brakke and Stonehaven merger called off

earnings news
Greencross
Henry Schein
J. M. Smucker
Nestle
Panion Animal Health
Pilgrim’s Pride

other news
7Pets
ADM Animal Nutrition
Baycom Diagnostics
Bentley’s Pet Stuff
Blue Buffalo
Enterra
Epitopix
General Mills
Innovetive Petcare
J.M. Smucker Company
Muttz Pet Goods and Gifts
Orion Animal Health
Petfive Brands
Vaxxinova
Visionaire Marketing
Zoetis

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BRAKKE CONSULTING, INC.
INDUSTRY OVERVIEW AT WVC
TUESDAY, MARCH 6
FOUR SEASONS HOTEL
LAST WEEK TO PRE-REGISTER

Brakke Consulting is pleased to announce the 2018 Industry Overview. The 2018 US Animal Health Industry Overview will be presented at the Western Veterinary Conference in Las Vegas, Nevada. These date is:

Tuesday, March 6, 2018, 2:00 – 4:00 pm

The key topics covered in the 2018 overview include:
• 2017 market summary and performance of the leading companies
• Veterinary clinic metrics and clinic consolidation
• Diagnostic market trends and the future for diagnostics
• Food animal market trends
• Summary information on the recently released Merck Veterinary Wellness Study
• A summary of what the future looks like for 2018 and the next few years.

This presentation is 2 hours of power-packed information backed by data and analysis by the leading consultants in animal health.

To register, go to www.brakkeconsulting.com and scroll down to the “What’s New” box. The price is $400 per person for online registration; late and on-site registration is $450.

www.BrakkeConsulting.com

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COMPANY EARNINGS RELEASES

• Henry Schein, Inc. reported full year 2017 financial results. Animal Health sales for the year were $3,477 million, an increase of 7% over the prior year. North American Animal Health sales were $1,793 million, an increase of 7%. (company press release)

• Nestle SA reported results for the full year 2017. Petcare sales were CHF 12.5 billion ($12.8 billion), an increase of 3% compared to the prior year. (company website)

• J. M. Smucker Company announced results for the third quarter of its 2018 fiscal year ended January 31, 2018. Pet food sales were $562 million, an increase of 2% compared to the previous fiscal year’s third quarter. Pet food segment profits were $118 million, a decrease of 7% from the previous fiscal year’s third quarter. (PetFood Industry)

• Panion Animal Health AB reported results for the full year 2017. Net sales were SEK 0 ($0). Operating loss was SEK -4 million (-$511,000). Liquidity at the end of the period was SEK 2.1 million ($258,000). (company website)

• Australian pets and vets specialist Greencross announced results for the first half of fiscal 2018. Revenues were up 9% to A$433 million (US$338 million); first-half profit was up 9% to A$23.2 million (US$18.1 million). (Finance.nine.com.au)

• Pilgrim’s Pride Corp. reported results for its full 2017 fiscal year. Net sales were $10.77 billion, up from $9.88 billion in 2016. Net income for the year was $694.6 million, up from $440.5 million during fiscal 2016. (Feedstuffs)

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BRAKKE CONSULTING AND STONEHAVEN CONSULTING MERGER CALLED OFF

The reported planned merger of two of the leading consulting firms in animal health was called off on February 21st. During the due diligence process it was determined that capturing the operational and financial synergies in this trans-continental merger proved more challenging than first anticipated. Ron Brakke, President of Brakke Consulting, commented that “While we’re disappointed that Stonehaven decided not to follow through with the merger, we remain excited about our continued growth prospects at Brakke Consulting. We want to assure our clients and the industry that we will continue to be devoted to supplying quality consulting services in the future as we have for the past 32 years.”

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COMPANY NEWS RELEASES

• Zoetis announced it has developed the first complete Holstein de novo reference genome, giving geneticists the ability to map regions of the genome influencing a range of health and disease outcomes. Until now, the dairy industry looked to the first reference genome assembled for cattle in 2009, which was derived from a beef cow. (farmforum.net)

• General Mills Inc. that it will acquire Blue Buffalo for $40.00 per share in cash, representing an enterprise value of approximately $8.0 billion. Blue Buffalo had $1.275 billion in net sales and $319 million in adjusted earnings for fiscal year 2017. General Mills expects to finance the transaction with a combination of debt, cash on hand and approximately $1.0 billion in equity. (Feedstuffs)

• The FDA announced that low levels of the drug pentobarbital were detected in cans of Gravy Train dog food produced by the J.M. Smucker Company. The FDA said its preliminary evaluation of the testing results of Gravy Train samples indicated the low levels found were unlikely to pose a health risk to pets. The J.M. Smucker Company initiated a voluntary recall of specific shipments of Gravy Train, Kibbles ‘N Bits, Ol’ Roy and Skippy canned dog food after the pentobarbital was found. (AVMA SmartBrief – FDA)

• Baycom Diagnostics announced the availability of A1CARE (A1C) diabetes test for cats and dogs. A1C (glycohemoglobin) is the gold standard diabetes test used by medical doctors. (company press release)

• ADM Animal Nutrition announced the launch of Proplex T, a new quality protein source for aquaculture and swine diets composed of dried fermentation biomass. (Feedstuffs)

• Vaxxinova, an EW-group company, announced an agreement to acquire Epitopix, a part of the Wilmar Poultry group of companies. Financial terms were not disclosed. (company press release)

• Innovetive Petcare announced the acquisition of its thirteenth practice, Animal Hospital of Wilkes in North Carolina. Financial terms were not disclosed. (company press release)

• Bentley’s Pet Stuff announced it has acquired Muttz Pet Goods and Gifts. The acquisition of these additional four stores in the Denver area brings Bentley’s Pet Stuff to 18 Colorado locations. Financial terms were not disclosed. (Pet Business)

• 7Pets, the company behind Garfield Cat Litter, announced it is launching a complete rebranding campaign including a new name: Petfive Brands. Petfive will serve as an umbrella for the company’s existing brands, soon-to-be launched pet specialty exclusive line of alternative litters and eventual new product categories. (PetProductNews)

• Visionaire Marketing announces it has been issued a patent from the United States Patent and Trademark Office for its novel take-home medical record organizer. The kit provides an all-in-one way to organize and keep important patient medical information, such as vaccination and microchipping records, medication guidelines, educational information, and instructions regarding follow-up care. (company press release)

• The Association of American Feed Control Officials (AAFCO) has approved Enterra’s request to include black soldier fly larvae meal in feed for salmonids, which includes salmon, trout and arctic char, in their list of authorized feed ingredients. The supporting material and the change in the definition was reviewed and supported by the FDA. This marks the first time an insect meal product has been approved in North America. (WattAgNet)

• EU Orion Animal Health announced it has received a positive opinion ruling from the European Medicines Agency’s Committee for Medicinal Products for Veterinary Use (CVMP) for its Clevor (ropinirole) eye drops for the induction of vomiting in dogs. The product stands out against other currently marketed emetics, as it provides an ocular route of administration. (Animal Pharm)

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KC ANIMAL HEALTH CORRIDOR
ANIMAL HEALTH INVESTMENT FORUM
NOW ACCEPTING PRESENTER APPLICATIONS

The KC Animal Health Corridor is now accepting applications to present at the 2018 KC Animal Health Investment Forum on August 21 in Kansas City, Missouri.

Now in its 10th year, the Forum is one of the only opportunities in the world for early-stage companies in the animal health sector to present their vision, business plan and technology to potential investors.

The selection committee will consider companies that meet the following criteria:
– Seeking $500,000 – $20 million in funding
– Revenue projections of $20 million within 5-7 years

Applications are due on April 6. To apply, go to http://kcanimalhealth.thinkkc.com/account/login.

For more information, contact Kimberly Young at young@thinkkc.com.

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ANIMAL HEALTH NEWS

• NEW ZEALAND – CATTLE WASTE RESEARCH AgResearch has developed urine sensors that are attached to grazing dairy cows and take detailed measurements every time the cow urinates, including volume and frequency and the concentration of nitrogen in the urine. that can potentially leach into soil and waterways. The sensors weigh about 1.5 kg and attach to the cow by a harness connected to a lightweight cow cover. (Feedstuffs)

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BRAKKE CONSULTING, INC.
RECRUITING FOR ALL LEVELS OF YOUR FIRM

At Brakke Consulting we find the right person to fit your company’s needs. We have an unequaled network in animal health, and unique insights into what veterinarians value in an animal health professional, including the sales rep attributes that correlate to higher sales volume.

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 throughout the process

For more information about our recruiting services, visit our website or call John Mannhaupt at 972.243.4033.

www.BrakkeConsulting.com

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BRAKKE CONSULTING VIEWPOINT

Those companies reporting year-end 2017 show some mixed results. The one major distributor’s revenue just slightly exceeded the growth of the total market worldwide and in the US. The two large pet food companies reporting demonstrate the challenges in the competitive pet food industry with growth over prior year being modest. Historically, pet food sales sometimes are an early reading on the robustness of the marketplace, which later spills over into other companion animal product categories.

Based on the feedback from some of our clients it appears that 2018 is off to a reasonably sound start. However, some the larger product categories are experiencing increased competition that could reduce revenues over expectations that are in the 2018 forecasts.

We encourage you to read in detail the outline of the 2018 Industry Overview agenda that will be presented in Las Vegas in a couple of weeks that appears earlier in this newsletter. This year’s overview provides in-depth analysis of several areas where manufacturers and distributors need to be closely tuned to what is occurring in their customer base.

Have a good weekend!

Ron Brakke

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Any use of the contents herein should be approved by and appropriately attributed to Brakke Consulting, Inc.

For more information about Brakke Consulting’s services and syndicated studies, visit our website at www.brakkeconsulting.com.

Brakke Consulting, Inc.
12005 Ford Rd., Suite 530
Dallas, TX 75234 USA