Animal Health News & Notes for August 2, 2019
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
IN THE NEWS:
Brakke Consulting news
Alivira Animal Health
Central Garden & Pet
Thermo Fisher Scientific
The Webinar Vet
Correction: last week’s newsletter included an erroneous email address for new Brakke Consultant Randy Freides. The correct address is email@example.com.
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COMPANY EARNINGS RELEASES
• Boehringer Ingelheim reported results for the first half of 2019. Animal Health sales were EUR 2.1 billion ($2.3 billion) for the period, unchanged from the same point last year (down 1.7% currency adjusted). Sales of the firm’s livestock vaccines were hurt by the ASF outbreak in China and other Asian countries, with sales of Ingelvac Circoflex down by 23% on a currency-adjusted basis. (Animal Pharm)
• Merck announced financial results for the second quarter of 2019. Animal Health sales totaled $1.124 billion for the second quarter of 2019, an increase of 3% compared with the second quarter of 2018. Excluding the unfavorable effect from foreign exchange, Animal Health sales grew 9%. (company press release)
• IDEXX Laboratories, Inc. reported results for the second quarter of 2019. Revenues were $620 million, an increase of 7% compared to the prior year period. Net income was $125.7 million, an increase of 16% compared to the prior year period. Companion Animal Group (CAG) revenues for the quarter were $547 million, an increase of 8%. (company press release)
• Bayer reported results for the second quarter of 2019. Animal Health sales were EUR 454 million ($516 million), flat compared to the comparable prior-year quarter (down 2.7% currency & portfolio adj.). (company website)
• Nestle reported results for the first half of 2019. Petcare sales were CHF 6.55 billion ($6.7 billion), an increase of 6% compared to the first half of 2018. (company website)
• Sequent Scientific (Alivira Animal Health) reported results for the first quarter of its 2020 fiscal year ended June 30, 2019. Revenues were $40 million, an increase of 18% over the prior-year quarter. Operating profit was $5.5 million compared to operating profit of $3.6 million in the prior-year quarter. (company press release)
• Krka reported results for the first half of 2019. Revenues were EUR 35.8 million ($39.5 million), an increase of 2% year-over-year. (Animal Pharm)
• Hester Biosciences reported results for its fiscal first quarter of 2020. Turnover reached INR 424.3 million ($6.2 million), an increase of 11% year-over-year. Net profit was approximately INR 98 million ($1.4 million), an improvement of about 1% compared with the same period last year. (Animal Pharm)
• Kindred Biosciences, Inc. announced financial results for the second quarter ended June 30, 2019. Net product revenues for the quarter were $1.2 million; there were no net product revenues for the same period in 2018 as Mirataz became commercially available in July 2018. KindredBio reported a net loss of $(14.3) million, as compared to a net loss of $(11.2) million for the same period in 2018. As of June 30, 2019, KindredBio had $79.6 million in cash, cash equivalents and investments. (company press release)
• Chewy, Inc. announced financial results for the first quarter of fiscal year 2019 ended May 5, 2019. Net sales grew 45% year-over-year to $1.1 billion. The net loss for the quarter was $(29.6) million, an improvement of 51% year-over-year. (company website)
• Central Garden & Pet Company announced financial results for its fiscal 2019 third quarter ended June 29, 2019. Net sales for the Pet segment decreased 1.3% to $350 million compared to the same period a year ago. (company press release)
• PetMed Express, Inc. announced its financial results for the first fiscal quarter ended June 30, 2019. Net sales were $80 million, a decrease of 8.5% compared to the first fiscal quarter of 2018. Net income was $5.3 million, compared to net income of $12.6 million for the quarter ended June 30, 2018, a 57% decrease. (company website)
• Trupanion, Inc. announced financial results for the second quarter ended June 30, 2019. Total revenue was $92 million, an increase of 26% compared to the second quarter of 2018. Net loss was $(1.9) million, compared to a net loss of $(0.4) million in the second quarter of 2018. (company press release)
COMPANY NEWS RELEASES
• Zoetis announced it has signed an agreement with Colorado State University (CSU) to establish the Zoetis Incubator Research Lab at CSU. The lab will explore the livestock immune system and target new immunotherapies, paving the way for new alternatives to antibiotics in food-producing animals. As part of the new lab, Zoetis expects to hire up to 20 livestock research scientists, immunologists and cell biologists. (company press release)
• Phibro Animal Health Corporation announced it has acquired the business and assets of Osprey Biotechnics, Inc., a privately held developer and marketer of innovative microbial products for a variety of applications and industries. Osprey also produces the key components for Phibro’s recently launched Provia Prime direct fed microbial product for poultry. Financial terms were not disclosed. (company press release)
• MBF Therapeutics (MBFT) announced that it has signed an exclusive option agreement with the University of North Carolina to evaluate UNC’s checkpoint inhibitor traps and calcium phosphate nanoparticle delivery system to evaluate in combination with MBFT’s proprietary immunomodulating technologies to create advanced immunotherapeutic treatments for cancer and infectious diseases in animal health. (company press release)
• Nationwide announced it has made a strategic investment with VitusVet, a provider of mobile solutions to both pet owners and veterinary practices. As part of the investment of an undisclosed sum, Nationwide will serve on the VitusVet board of directors. The two companies originally partnered in 2016 to provide Nationwide’s pet insurance customers with exclusive access to VitusVet’s app claims submission function. (InsuranceBusinessMag.com)
• The FDA announced it has issued a Warning Letter to Curaleaf, Inc, a marketer of CBD products for people and pets regarding health claim statements made on its website and on social media posts relating to its CBD products. According to the FDA, the firm’s “Bido CBD for Pets” are unapproved new animal drugs and marketing them violates the FD&C Act. (APPA e-update)
• BIXBI announced the launch of a line of Broad Spectrum Hemp Oil designed specifically for dogs. (Pet Product News)
• Cargill announced the launch of the BeefUp Sustainability project, a new initiative that aims to cut greenhouse gas (GHG) emissions across its North American beef supply chain by 30% by 2030 – equivalent to removing two million cars from US highways for a year. The opt-in initiative will focus on four key areas – grazing management, feed production, innovation and food waste reduction. (Animal Pharm)
• MightyVet announced it has earned 501(c)(3) nonprofit status from the IRS, making donations fully tax-deductible. Started in March 2018, MightyVet offers on-demand non-clinical courses on topics such as business, careers and personal well-being. (Todays Veterinary Business)
• CANADA Elanco Animal Health Inc. announced the acquisition of Prevtec Microbia Inc., a biotechnology startup specializing in the development of vaccines that help prevent bacterial diseases in food animals, including the Coliprotec line of swine vaccine products. Elanco acquired the company, including inventory and pipeline assets in an all-cash deal for CAD $78.5 million (US $59.9 million); the agreement also includes a contingent payment of up to CAD $21.5 million (US$ 16.4 million) to the former Prevtec shareholders in Q1 2022, if certain sales milestones are achieved in 2021. (company press release)
• EU Royal DSM announced it is seeking EU authorization for a new feed additive for dairy cows that it claims will reduce methane emissions by around 30% by suppressing the enzyme that triggers methane production in a cow’s stomach. Upon feeding, the additive takes effect immediately and is subsequently broken down into compounds already naturally present in the cow’s stomach. The feed additive is a result of DSM’s Project Clean Cow. (Animal Pharm)
• CANADA Vetio announced the completion of its Montreal plant expansion to accommodate commercial scale manufacturing of veterinary drug products for the North American, European and other global markets. The facility produces liquids, semi-solids, tablets, intermediates and blends, such as its proprietary Flavorpal palatant system. Production capacity was also installed for pharmaceutical soft chews based on Vetio’s intellectual property. (company press release)
• CHINA Thermo Fisher Scientific announced the China Animal Disease Prevention and Control Center (Agricultural and Rural Department Slaughter Technology Center) has approved its real-time PCR-based workflow to detect and monitor the spread of African Swine Fever (ASF). The PCR method is the preferred detection technology now in use for the ASF outbreak currently affecting China. (company press release)
• UK The Webinar Vet, which specializes in online education for veterinary professionals, announced it has acquired Simply Locums, a Liverpool-headquartered locum service for vets and veterinary nurses that serves to connect veterinary professionals and practices directly, without the need to engage recruitment consultants via a website and mobile app. Financial terms were not disclosed. (insidermedia.com)
ANIMAL HEALTH NEWS
• CHINA – ASF Rabobank has estimated that China has lost about 40% of its pig herd to African Swine Fever (ASF) since July 2018, with losses expected to reach 50% by the end of 2019. Although some Chinese farms have already attempted to restock, these efforts have not been successful. The report anticipates that it will take at least five years for Chinese pork production to recover from the outbreak. (Feed Strategy enews)
• US – PIG EAR TREATS The FDA and Centers for Disease Control (CDC) have recommended that people neither buy nor use all pig ear pet treats in the United States following numerous cases of Salmonella infection in people in 33 states after exposure to recalled pig ear dog chews imported from Brazil and Argentina. Multiple products have tested positive for numerous types of Salmonella, resulting in two company recalls to date (Lennox Intl Inc. and Pet Supplies Plus). (Petfood Industry)
• US – ADUFA/AGDUFA FEES The FDA announced the fiscal year (FY) 2020 fee rates and payment procedures for animal drugs subject to user fees under the Animal Drug User Fee Amendments of 2018 (ADUFA IV) and Animal Generic Drug User Fee Amendments of 2018 (AGDUFA III). The Animal Drug Application Fee for FY2020 is $440,446; the fee for an Abbreviated Application for a Generic New Animal Drug is $493,897. For more information, go to https://www.fda.gov/animal-veterinary/cvm-updates/fda-announces-fy-2020-animal-drug-user-fee-rates-adufa-and-agdufa?utm_campaign=8-1-2019-ADUFA&utm_medium=email&utm_source=Eloqua . (FDA)
• JAPAN – VIRUS DETECTION Researchers at the University of Tokyo have created a virus scanner that makes use of low-cost components and a smartphone. The system detected about 60% of the number of influenza viruses in a sample as a fluorescence microscope, but was much faster; the test was also about 100 times more sensitive than a commercial rapid influenza test kit. The device is about the size of a brick and has a slot on top in which a smartphone can be placed such that its camera looks through a small lens to the inside of the device. The device was described in the journal Lab on a Chip. (Feedstuffs)
BRAKKE CONSULTING VIEWPOINT
Boy, this is what is known as being thrown into the fire. I am a 4-day veteran of the Brakke organization and was asked to take a shot at writing this week’s viewpoint. A bit intimidating I must say. I am thrilled about joining the Brakke team. This will be a very different role than I am accustomed to coming from Merck and Merck Animal Health after a 29-year career in the Finance organization.
I spent 22 years supporting Merck’s Human Health commercial operations in countries/regions including Japan, Asia/Pacific, Latin America and Canada, as well as leading Merck’s global Corporate Audit Function. The last 7 years of my career I supported Merck Animal Health’s North America commercial operations. While I enjoyed supporting Human Health, I LOVED learning about and supporting Animal Health. While I could get my head around the companion animal segment given the parallels to the human side of the business, I had no appreciation for the livestock business. We, in the urban/suburban areas of the Northeast, go to the supermarket to purchase our beef, chicken, pork and fish. Many, if not most northeasterners (including me up until 7 years ago), do not understand what it takes to get our food to the supermarket shelves.
What struck me about the animal health industry were two key points. First, the speed of change within the industry. As I look back at the manufacturer and distributor landscape in 2011 when I entered my animal health role vs. the picture today, it is amazing how much consolidation has occurred and continues to occur. In addition, the speed with which the top companies are developing, acquiring and introducing new technologies and service offerings continues to amaze me.
The second aspect of animal health that fascinates me is the degree to which relationships drive success. This is very different than the human side where a successful sales call might be a 5 minute discussion with a physician. On the animal health side, sales reps can spend several hours with a customer to not only educate them on new and existing products, but to also help solve problems within their customers’ practices or operations. There is so much more collaboration between manufacturers and their customers. This brings me back to a point Bob Jones made in his remarks last week. People drive success. I could not agree more!!!
I am looking forward to bringing a new set of skills to the Brakke team and the client base. Most importantly, I am excited to help Brakke’s clients solve business issues while continuing to learn and deepen my knowledge of the animal health industry..
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