Animal Health News & Notes for December 3, 2021

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Brakke Consulting’s
Animal Health News & Notes for December 3, 2021
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
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IN THE NEWS:

Earnings News
Benchmark Holdings
DS Pharma Animal Health
ECO Animal Health
MWI
Patterson
Vimian Group
Zenoaq

Other News
Angany
Arenus Animal Health
Aurora Pharmaceutical
Basepaws
Bimeda
Covenant Animal Health Partners
Delf
EarthWise Pet
Elanco
FirstVet
Hallmarq
Hygain
Med-Pharmex
Nextmune
Neogen
NovaQuest Capital Management
Pathway Vet Alliance
PetDesk
Pet Pros
Royal DSM
TechAccel
Thrive Pet Healthcare
Vestkorn Milling
Vetoquinol
Vimian Group
Virbac

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COMPANY EARNINGS RELEASES

• AmerisourceBergen reported results for fiscal 2021 ended September 30. MWI Animal Health‘s sales were $4.68 billion, an increase of 11% year-over-year. (IHS Markit Connect)
• Patterson Companies, Inc. reported results for its fiscal second quarter ended October 30, 2021. Reported net sales in the Animal Health segment were $1.03 billion, an increase of 12% over the prior-year quarter (internal sales growth of 16%). (company press release)
• Nippon Zenyaku Kogyo (Zenoaq) reported results for the first half of its fiscal 2021 ended September 30. Sales were JPY 17,650 million ($155.6 million), an increase of 4% over the prior-year period. Zenoaq’s companion animal product sales climbed by 4.2% to JPY 8,463 million ($74.6 million). (IHS Markit Connect)
• ECO Animal Health reported results for the first half of fiscal 2022 ended September 30. Revenues were GBP 38.5 million ($43.2 million), a decline of 9% year-over-year. Profit for the period was GBP 125,000 compared to GBP 4.2 million reported this time last year. (IHS Markit Connect)
• DS Pharma Animal Health reported results for the first half of fiscal 2021 ended September 30. Revenues were JPY 2,810 million ($24.8 million), a decline of 63% year-on-year. The sharp fall in turnover was impacted by the cessation of DS Pharma’s pet food business and the discontinuation of a distribution pact for Hill’s Pet Nutrition companion animal diets in December 2020. Discounting pet food, DS Pharma’s companion animal product sales increased by 30% to JPY 2,190 million ($19.3 million). (IHS Markit Connect)
• Benchmark Holdings reported results for the 2020/21 financial year ended September 30. Revenue was GBP 125 million ($167 million), an increase of 18% compared to the prior fiscal year. Loss for the year was GBP(11.6) million ($15.5 million) compared to a loss of GBP 31.9 million in fiscal 2020. (IHS Markit Connect)
• Vimian Group reported results for the third quarter of 2021. Revenues were EUR 41.5 million ($46.9 million), an increase of 99% compared to the prior-year quarter. Acquisitions accounted for most of the surge; on an organic basis revenues increased 5.5% year-on-year. Vimian’s net loss widened to EUR (270,000) for the quarter, from EUR (139,000) a year ago. (IHS Markit Connect)

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COMPANY NEWS RELEASES

• Elanco Animal Health announced it will cut about 380 jobs globally as part of a restructuring aimed at simplifying the animal health company’s organizational structure and to focus investments in priority areas. The job cuts will include reducing senior management by about 20%. (company press release)
• The FDA announced it has approved Virbac‘s TIA 12.5% (generic tiamulin hydrogen fumarate) oral liquid concentrate for use in swine for treatment of swine dysyentery and swine pneumonia. It has also approved Virbac’s Tussilin 100 (generic tulathromycin injection) for use in cattle and swine; and Tussilin 25 in calves and swine. (FDA)
• The FDA announced it has approved Vetoquinol‘s Tulaven 100 (generic tulathromycin injection) for use in cattle and swine; and Tulaven 25 in calves and swine. (FDA)
• The FDA announced it has approved Bimeda‘s ProstaMate (generic dinoprost tromethamine injection) for use in beef and dairy cattle to synchronize estrous cycles. (FDA)
• The FDA announced it has approved Aurora Pharmaceutical‘s Barrier for Cats (generic imidacloprid and moxidectin) topical solution for heartworm prevention and treatment of fleas in cats and ferrets, and treatment of ear mites, roundworms and hookworms in cats. (FDA)
• Med-Pharmex, Inc. announced that a consent decree has been signed with the FDA to settle and resolve the complaint for permanent injection filed October 2020 by the US Department of Justice. The consent decree primarily relates to Med-Pharmex’s manufacturing of sterile animal drug products, which the company has voluntarily discontinued; Med-Pharmex will continue to manufacture and supply non-sterile animal drug products without interruption. (company press release)
• NovaQuest Capital Management, LLC announced that it has acquired TechAccel’s ownership stake in Covenant Animal Health Partners, a novel product development partnership originally formed by TechAccel and Reliance Animal Health Partners in 2018. Covenant’s partners will also serve on a newly established Strategic Advisory Committee to support NovaQuest’s evaluation of animal health investment opportunities moving forward. Financial terms were not disclosed. (company press release)
• Hallmarq Advanced Veterinary Imaging announced the launch of its latest product, Standing Equine Leg CT (sICT), in the US veterinary market. Hallmarq’s sICT – which offers safe, convenient, and affordable advanced imaging for the standing, sedated horse – has been through development, and in clinical use in the UK, since early 2021. (company press release)
• Nextmune, the operating company within Vimian Group’s Specialty Pharma segment, announced it has signed an agreement to develop new vaccines for allergy and atopic dermatitis together with Canadian biotechnology company Angany. The total payments from Vimian Group to Angany during the development period are estimated to be $20 million for the products in scope and are conditional upon the successful completion of successive development and market launch milestones from 2022. (Biopharmadive.com)
• Hygain, an equine nutrition specialist, announced an agreement to acquire 100% of Arenus Animal Health, an animal supplement and nutraceuticals brand. Financial terms were not disclosed. (company press release)
• Pathway Vet Alliance announced that it is now Thrive Pet Healthcare. (Bakersfield.com)
• PetDesk announced its newest partnership with IVPA, a non-profit association dedicated to uniting independent veterinary practitioners. This alliance will provide the IVPA community with generous PetDesk benefits, which will aid them in streamlining communication and patient check-in processes with their clients. (company press release)
• Basepaws — the creator of the at-home cat DNA test — announced it has joined forces with FirstVet to offer teleconsultation services. Through its partnership with FirstVet, Basepaws will offer 6 months of free 24/7 teleconsultation to first-time customers worldwide who purchase their signature product—Breed + Health Test. (DVDM360.com)
• EarthWise Pet announced it has added all 18 Pet Pros locations to its family. the Pet Pros will be operated as a franchisee of EarthWise, and will be converted to EarthWise Pet locations. (Pet Business)
• UK Neogen announced it has acquired Delf – a UK-based manufacturer and supplier of animal hygiene products with a particular expertise in serving the dairy industry. Financial terms were not disclosed. (IHS Markit Connect)
• NORWAY Royal DSM announced it has agreed to acquire Norwegian plant-based protein company Vestkorn Milling for an enterprise value of EUR 65 million ($73.6 million).  Vestkorn Milling is one of the Europe’s leading producers of pea- and bean-derived ingredients and supplies proteins, starches and dietary fibers for plant-based foods, pet food and animal feed. (IHS Markit Connect)

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ANIMAL HEALTH STOCK PRICE TRACKER

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ANIMAL HEALTH NEWS

• FRANCE – AVIAN INFLUENZA France has detected a highly pathogenic strain of avian influenza at a poultry farm close to the Belgian border. It’s the first time since an serious outbreak last winter that the avian flu has been found in a French farm, although four cases have been found among wildlife and three in backyard poultry. All birds at the affected farm in the northwestern town of Warhem will be killed and a 10-kilometer surveillance perimeter has been set up. (Politico.eu)
• US – RABIES CONTROL The CDC relaxed rules banning the importation or re-entry of dogs from 113 countries with high risk of rabies transmission and will now allow travelers to bring in healthy, microchipped dogs that have an up-to-date rabies vaccine from a US-licensed veterinarian. Travelers returning to the US with a dog that has been in a high-risk country may re-enter the US through one of 18 approved ports. (AVMA SmartBrief – NYT)
• US – SUSTAINABILITY The Institute for Feed Education and Research (IFEEDER) announced it has partnered with The Context Network to develop a sustainability roadmap to support members of the animal food industry. The project will include an industry and stakeholder assessment, through which IFEEDER will help companies identify and evaluate risks and opportunities within each segment to advance corporate sustainability programs and environmental initiatives. (Petfoodprocessing.net)
• US – SWINE SURVEILLANCE The USDA’s Animal and Plant Health Inspection Service (APHIS) has begun a new collaborative effort to study antimicrobial use and resistance on commercial swine farms in the Midwest. The work will focus on use and resistance related to animal health and production-related indicators. APHIS is partnering with several animal health and industry organizations on this study. (agency press release)
• US – VETERINARY EDUCATION Members of a West Virginia Senate select committee are exploring the possibility of funding a veterinary school in the state, which spends about $1 million annually to subsidize out-of-state veterinary school tuition for 52 state residents. Many of those students don’t return to the state, and a report prepared for the committee found eight counties have no registered veterinarian and the number of veterinarians per household in the state is among the lowest in the US. (AVMA SmartBrief – WSAZ-TV)

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BRAKKE CONSULTING VIEWPOINT

The hot acquisition market in animal health seems to be continuing apace.  There have been over 130 acquisitions noted in our newsletter through November of this year – with another 5 in this newsletter alone – and there are no doubt some we have missed.

Growth through acquisition seems to be a primary focus for many animal health companies large and small.  In addition, private equity and other outside investors are paying impressive multiples to get into the animal health game.  Most of these recently have been smaller, more strategic purchases. But now that the dust has settled from the Elanco/Bayer merger, is it possible there is another mega-merger in the offing?  Only time will tell.

Lynn Fondon

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YOUR VIEW

Two weeks ago we asked how valuable would a veterinary industry supplier conference be, one that would bring together service organizations such as ad agencies, consultants, contract manufacturers, etc. with appropriate buyers from manufacturers and product/service marketers?  Your responses were spread across the board:  19% said very valuable, 26% said moderately valuable, 22% said somewhat valuable, and 33% said not very valuable.

This week

Do you think there will be a mega-merger in animal health in 2022?