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Brakke Consulting’s
Animal Health News & Notes for December 6, 2019
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
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IN THE NEWS:
Brakke Consulting News
Product development and regulatory assistance
Earnings News
Central Garden and Pet
DS Pharma Animal Health
MWI Animal Health
Patterson
Zenoaq
Other News
Agrivida
Aker BioMarine
Algenex
Allflex
Alltech
Archer Daniels Midland
Bayer
Evialis
Evonik
Fatro
FitBark
GNUbiotics Sciences
JustFoodForDogs
Kane Biotech
Loongtech
MetLife
Norbrook Labs
PetFirst Healthcare
Pharmaron
Royal De Heus
Verovaccines
Zomedica
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BRAKKE CONSULTING, INC.
Product Development and Regulatory Affairs Assistance
Did you know that Brakke Consulting can provide your company with product development and regulatory affairs assistance in the animal health vaccine, diagnostics, and drug segments for both food and companion animals?
Brakke Consulting has the experience, insight, ability and contacts to provide clients with high quality, product-specific consulting services in the areas of technology assessment, product development, manufacturing, and regulatory affairs. Let Brakke Consulting assist you in moving your project from proof-of-concept right on through to commercialization.
To learn more about how we can help, please contact info@brakkeconsulting.com or Mike McGinley directly at mjmcginley813@gmail.com for a confidential consultation.
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COMPANY EARNINGS RELEASES
- AmerisourceBergen reported results for its fiscal year ended September 30, 2019. MWI Animal Health reported yearly revenues of $3.975 billion, a year-on-year improvement of around 5%. (company website)
- Patterson Companies, Inc. reported results for its fiscal second quarter ended October 26, 2019. Reported net sales in the Animal Health segment were $848 million, a decline of 1% compared to the second quarter of last year. (company press release)
- Nippon Zenyaku Kogyou (Zenoaq) announced results for the first half of the firm’s fiscal 2019 ended September 30, 2019. Sales were JPY 17.23 billion ($157 million), an increase of 10% year-over-year. (Animal Pharm)
- DS Pharma Animal Health reported results for the first half of fiscal 2019 ended September 30, 2019. Sales were JPY 7,250 million ($66 million), an 8.5% increase year-over-year. (Animal Pharm)
- Central Garden & Pet Company announced financial results for its fiscal year ended September 28, 2019. Pet Segment net sales were $1.385 billion, an increase of 3% compared to the prior year. (company website)
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COMPANY NEWS RELEASES
- Bayer and India-based Pharmaron announced they have entered into a collaboration agreement to develop new molecular entities for veterinary medicine. (Business.medicaldialogues.in)
- The FDA announced that Norbrook Labs has received approval for Selarid (generic selamectin) for the treatment of fleas, ticks, and ear mites, and the prevention of heartworms, in dogs and cats. Selarid is also approved for the treatment of roundworms and intestinal hookworms in cats. (FDA)
- Kane Biotech announced that it has been selected to receive a potential award of up to approximately $3.4 million from an unnamed government agency related to the continuing clinical development of the Company’s DispersinB to treat biofilm mediated antimicrobial resistance in non-healing chronic wounds. Separately, Kane Biotech Inc. announced its intention to undertake a non-brokered private placement offering of up to 25,000,000 units for gross proceeds of up to $3,500,000. (company press release)
- Zomedica Pharmaceuticals Corp. announced that its CEO, chairman and director, Gerald Solensky Jr., has resigned, effective immediately. Chief Financial Officer Shameze Rampertab, who has been with the company since 2016, will take on interim CEO duties while the company board searches to find a replacement. (Crainsdetroit.com)
- The FDA has issued Aker BioMarine a Generally Recognized as Safe (GRAS) Notice known as a “no objection letter” for QRILL Pet – a krill product – for use as a source of protein and lipid in dry adult dog food. (GlobalPets)
- Spanish start-up Algenex announced a commercial license agreement with Italy’s Fatro for development of a swine vaccine. Fatro will use Algenex’s CrisBio baculovirus vector-mediated expression platform for an undisclosed swine disease. (Animal Pharm)
- Evonik Nutrition & Care and GNUbiotics Sciences SA announced that they have entered into an agreement under which Evonik will manufacture AMObiome, a nutritional component that restores natural symbiosis in pets and livestock animals with microbiota imbalance. (Petfood Industry News)
- Agrivida announced the availability of its innovative Grainzyme Phytase enzyme feed additive for use in swine operations. (PRnewswire)
- MetLife, a financial service company, announced it has acquired PetFirst Healthcare. MetLife says it will leverage its position as a market leader in US employer group benefits by enabling the company to offer pet insurance to its policyholders. Financial terms were not disclosed. (Veterinary Practice News)
- FitBark announced the launch of the FitBark GPS, an “all-in-one” wearable dog health and location tracker. The GPS tracker creates multiple safe zones around “familiar” WiFi networks – such as at home – and alerts the pet owner when the dog leaves or enters one of these safe areas. (Animal Pharm)
- JustFoodForDogs (JFFD) announced it has received $68 million in new funding to help the company expand. JFFD has been growing by using several strategies, including launching open-format kitchens in Petco stores across the US. JFFD’s goal is to prepare pet food by human standards, using USDA-approved ingredients in regulated kitchens with vet-approved and tested recipes. (Vet Advantage – Pet Product News)
- CHINA Allflex Livestock Intelligence announced a collaboration with Chinese animal monitoring firm Loongtech, combining Alltech’s visual and electronic identification technology with Loongtech’s vision technology to provide solutions for farmers in China’s swine industry. (Animal Pharm)
- NORWAY Alltech announced it has joined a research partnership with Norwegian research institute Nofima aimed at developing sustainable nutritional products for salmon. The project will conduct six large-scale studies focused on industrial production of nutritional products, organic minerals and heterotrophic microalgae. (Animal Pharm)
- SPAIN Royal De Heus announced an agreement for the acquisition of the Evialis Galicia compound feed plant in Spain from Archer Daniels Midland Financial terms were not disclosed. (Feedstuffs)
- GERMANY Verovaccines announced an agreement with an unnamed Japanese company for the joint development of an animal vaccine. Verovaccines develops vaccines for animal health through a yeast-based technology platform formed on Kluyveromyces lactis milk yeast. (Animal Pharm)
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ANIMAL HEALTH STOCK PRICE TRACKER
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ANIMAL HEALTH NEWS
- JAPAN – CSF The Japanese Ministry of Agriculture, Forestry and Fisheries (JMAFF) has started to vaccinate wild boar against classical swine fever (CSF). The first vaccination program began in October, in limited areas within the six prefectures currently suffering outbreaks of CSF on commercial farms. The second vaccination program is now being conducted in the other five prefectures where CSF was found in wild boar during November. (Animal Pharm)
- US – PET SPENDING According to US Bureau of Labor Statistics Survey of Consumer Finances data analyzed by MagnifyMoney, growth in Americans’ pet spending increased 50% from 2013 to 2018. During that same time, American’s annual income increased by 23%. (Petfood Industry)
- US – CBD REGULATION The FDA issued warning letters to 15 companies for illegally selling products containing cannabidiol (CBD) in ways that violate the Federal Food, Drug & Cosmetic Act (FD&C Act). FDA also published a revised Consumer Update (go to https://www.fda.gov/consumers/consumer-updates/what-you-need-know-and-what-were-working-find-out-about-products-containing-cannabis-or-cannabis for details) detailing safety concerns about CBD products more broadly. Based on the lack of scientific information supporting the safety of CBD in food, FDA also indicated that it cannot conclude that CBD is generally recognized as safe (GRAS) among qualified experts for its use in human or animal food. (Feedstuffs)
- US – INDUSTRY EDUCATION Kansas State University announced it has introduced the first graduate certificate in the US focused on regulatory affairs in the animal health industry. The Animal Health Regulatory Affairs Graduate Certificate is being offered by K-State’s Olathe campus. (Animal Pharm)
- WORLD – ONE HEALTH The One Health Committee of the World Small Animal Veterinary Association (WSAVA) has launched the first Certificate Program to focus specifically on the role of companion animals in One Health. It will ultimately comprise 20 modules, expected to be fully available early in 2020. The modules are offered through Colorado State University’s College of Veterinary Medicine. (association press release)
- US – CBD RESEARCH Researchers from several universities and ElleVet Sciences studied how CBD-rich hemp nutraceuticals affect dogs and cats. The research found that after receiving CBD orally twice daily for 12 weeks, the dogs showed no clinically significant changes; the cats did show some behavioral changes, including excessive head shaking and licking. The research was published in the journal Animals. (Petfood Industry)
- UK – BOVINE TB RESEARCH Scientists at the University of Surrey have developed a novel vaccine and complementary skin test to protect cattle against bovine tuberculosis (TB). The researchers identified genes that contain encoded immunogenic proteins that could be removed from BCG without affecting its ability to work as a live vaccine, which were then deleted from the BCG chromosome to make a BCG-minus strain. The deleted immunogenic proteins were used to develop a new synthetic skin test that will be positive for animals that have been exposed to TB but, unlike the current test, will be negative for animals that have been vaccinated with the BCG-minus strain. The research was published in the journal Scientific Reports. (Feedstuffs)
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BRAKKE CONSULTING VIEWPOINT
As we approach the end of 2019, I have spent a lot of time thinking, reading and talking with others about the fast-changing veterinary diagnostics space. For quite a few years now we have become accustomed to the diagnostics space growing at rate higher than the animal health industry as a whole (CAGR of 8-10% for diagnostics versus 4-5% for animal health). The natural question is: Can this diagnostic growth rate continue? Well, not surprisingly, there is no shortage of “crystal ball” speculation out there on the subject. Fortunately, the general consensus is that the answer is YES, with a high probability of growth rates in excess of what we’ve come to expect.
There are a few commonly cited factors and drivers that support this belief and three of these seem to dominate the landscape. The first of these is that the use of preventative diagnostics in the veterinary practice continues to rise, with higher than average corporate hospital use rates leading the way. With vet clinic consolidation expected to continue at a pace similar to what has been seen in the recent past, this higher use rate trend should continue and likely expand. Secondly, the major players in this space are increasingly focused on international markets that haven’t yet widely adopted preventative diagnostics. These markets represent a very large portion of the global addressable veterinary diagnostics market estimated to be $33B (recent IDEXX estimate), of which only about 11% is currently being served. Lastly, innovation in the areas of fecal/urine testing, early cancer detection, and genetic testing are predicted to both expand the available menu of preventative diagnostics, as well as replace some labor intensive and inaccurate existing methods.
One potential area of growth where opinions vary widely, is growth from synergies between products (vaccines, drugs, etc.) and diagnostics. Developing a clear strategy that creates revenue synergies across these categories would seem to be both a growth driver and a game changer in veterinary diagnostics and animal health in general. There are certainly challenges to be overcome, but there is one obvious industry leader in Zoetis that continues to strategically build and acquire the assets necessary to move in that direction. Will they develop such a strategy, and will others try to follow?
All in all, the veterinary diagnostics space looks to be well positioned for growth rates that exceed the overall animal health industry growth well into the future. If this trend does hold true all stakeholders; veterinarians and the patients they care for, investors, manufacturers, innovators, and underserved markets across the globe, will benefit from a more reliable, accessible, and profitable practice of preventive veterinary medicine.
In closing, I want to wish you all the best for a successful close to 2019, as well as Happy Holidays and a Happy New Year. I hope to see many of you at VMX and WVC in early 2020. Until then, take care and be well.
Mike McGinley
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