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Brakke Consulting’s
Animal Health News & Notes for January 3, 2020
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
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IN THE NEWS:
Brakke Consulting news
2020 Industry Overview at VMX & WVC register now
Earnings News
Benchmark Holdings
ECO Animal Health
General Mills (Blue Buffalo)
Neogen
Norbrook
Sanderson Farms
Other News
Avivagen
Bimeda
The Center for Aquaculture Technologies Canada
COFCO Biotechnology
Dendris
Elanco (Credelio Cat)
Elanco (aquaculture)
Farmers Union Industries
Green Plains
Grupo Unipharm
Hills
Kindred Biosciences
Kyoritsu Seiyaku
Lallemand Animal Nutrition
Mars Petcare
Merck
National Veterinary Care
NAVC
Novozymes
Perfect Day
Prompt Equipments
Royal Canin
sWheat Scoop
Targeted PetCare
Vaki
Vetoquinol
VetPartners
Wind Point Partners
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BRAKKE CONSULTING, INC.
Announcing the 2020 Brakke Industry Overview
Presented at VMX: Tuesday January 21, 2020, 2-4 pm, Hyatt Regency Plaza Int’l I
Presented at WVC: February 18, 2020, 2-4 pm, Four Seasons Hotel, Acacia Ballroom
What do industry consolidation, CBD and African Swine Fever have in common? They are all important topics covered in Brakke Consulting’s annual Industry Overview presented at VMX and WVC in early 2020.
2019 was an especially newsy year, and many events have long-range implications for the animal health industry. Key topics and presenters include:
- Industry performance and a special analysis of the public companies in animal health (Dr. Bob Jones and Randy Freides)
- Vet practice consolidation, CBD, monoclonal antibodies and other new companion animal technologies (John Volk)
- Disruptive technologies and the changing landscape of the diagnostics industry (Dr. Mike McGinley)
- African Swine fever, plant-based meat and milk products and their impact on protein and animal health product demand (Dr. Cary Christensen)
This information-packed 2-hour session will be especially valuable for executive leadership, sales and marketing, strategy and finance managers.
Sign up today on our website at https://brakkeconsulting.com/our-services/information/industry-overview/. Or email Amanda McDavid amcdavid@brakkeconsulting.com or call her at 336-396-3916. Pre-registration cost is $400; there are discounts for multiple attendees from the same company. We look forward to seeing you there!
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COMPANY EARNINGS RELEASES
- Norbrook Holdings reported results for the fiscal year ended August 31, 2019. Revenues were GBP 237 million ($290 million), a decline of 14% year-over-year following a product recall in May. Operating profit was GBP 11 million ($13.4 million) compared to GBP 45.1 million in fiscal 2018. (Irishnews.com)
- Neogen reported results for the second quarter of its fiscal 2020 ended Nov. 30. Revenues were $108 million, up 1% compared to the previous year’s second quarter revenues. Second quarter net income was $16.3 million, compared to the prior year’s $16.1 million. Neogen’s Animal Safety segment reported revenues of $50.9 million, a decrease of 4% compared to $53.3 million in the prior year second quarter. (company website)
- General Mills reported results for the second quarter of its fiscal 2020 year. Pet segment (Blue Buffalo) sales increased 16% to $389 million. Operating profit for the company’s pet division was $81 million, up 14%. (GlobalPets)
- ECO Animal Health reported results for the six months ended September 30, 2019. Sales were GBP 28.7 million ($38 million), a decline of 4% compared to the prior-year period (restated). EBITD was GBP 2.7 million ($3.6 million) compared to the prior-year period’s GBP 6.4 million (restated). (press release)
- Benchmark Holdings plc reported results for its fiscal 2019 full year ended September 30. Revenues for the entirety of 2019 were GBP 148.7 million ($194 million), a decline of 2% from the prior year. Net loss for the period totaled GBP(73.3) million ($(96 million), compared with a GBP 0.5 million profit in the previous year. (Animal Pharm)
- Sanderson Farms reported results for the fiscal year ended October 31, 2019. Net sales for fiscal 2019 were $3.44 billion compared with $3.24 billion for fiscal 2018. Net income for the fiscal year totaled $53.3 million compared with net income of $61.4 million for last fiscal year. (Watt Poultry Update)
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COMPANY NEWS RELEASES
- Merck announced it has acquired Pentair-owned Vaki, a leader in fish farming and wild fish monitoring equipment. Vaki will be a leading brand under the Biomark business within Merck. Financial terms were not disclosed. (Intrafish)
- The FDA announced it has approved Elanco’s Credelio Cat (lotilaner) chewable tablets for killing adult fleas and the treatment and prevention of flea infestations in cats. (FDA)
- The FDA announced it has approved an Abbreviated New Animal Drug Application for Vetoquinol’s Imoxi Topical Solution for Dogs (imidacloprid + moxidectin) for the treatment of heartworms, fleas, hookworms, roundworms and whipworms. Imoxi is a generic equivalent of Bayer’s Advantage Multi. (FDA)
- The FDA sent a warning letter to Hill’s Pet Nutrition in November, related to the company’s recall of wet dog food for dangerously excessive vitamin D content. The letter stated that, while Hill’s has implemented procedures to address the potential for another vitamin D problem, Hill’s response did not address the root cause of the incident, which was accepting an ingredient without confirming that it contained vitamin levels that were within specification as required by Hill’s procedures. (Petfood Industry)
- Royal Canin announced the launch of Urinary SO Aging 7+, a diet tailored to target specific urinary issues in aging pets and to manage Lower Urinary Tract Disease and signs of aging in cats and dogs. (company announcement)
- Novozymes announced it has entered into an exclusive partnership with Green Plains to produce high protein ingredients for animal feed. The two companies will begin their partnership, which also features a commercialization agreement, in the first quarter of 2020. (Animal Pharm)
- Wind Point Partners announced that its portfolio company Targeted PetCare has acquired sWheat Scoop from Farmers Union Industries. sWheat Scoop manufacturers branded, 100% wheat-based, biodegradable cat litter products. Financial terms were not disclosed. (Pet Business)
- The North American Veterinary Community (NAVC) announced VMX Virtual, a 3D, immersive and interactive platform that connects conference exhibitors and attendees 24/7, 365 days a year. VMX Virtual introduces advanced gamification and simulation technology and applies it for the first time to the virtual trade show industry, allowing participants to feel “virtually there” in the Exhibit Hall. (company press release)
- Lallemand Animal Nutrition announced a research and development partnership with Dendris to focus on developing a monitoring tool to characterize microbial fibrolytic activity in the ruminant digestive tract. (Feedstuffs)
- Perfect Day, which is developing flora-based (animal-free) dairy, announced it has raised $140 million in a Series C funding round, led by Temasek and with substantial involvement from past investors. The company plans to announce its first commercial partnerships early in 2020. (Feedstuffs)
- CANADA Elanco announced it has signed an agreement to sell its Victoria, Prince Edward Island (PEI) aqua research and development facility to The Center for Aquaculture Technologies Canada, a leading aquaculture R&D and contract research services company with an established presence in PEI. Elanco will shift this capability into its other existing R&D facilities. Financial terms were not disclosed. (company press release)
- JAPAN Kyoritsu Seiyaku announced the launch of VRAINERS, a platform that provides electronic medical records for companion animals at veterinary hospitals, and helps veterinary hospitals manage and analyze the data accumulated in electronic medical records in an integrated way. (Animal Pharm)
- GUATEMALA Bimeda announced it has acquired the veterinary medicines business of Grupo Unipharm. The acquisition includes 25 licensed veterinary products and 150 licenses for products that are not currently marketed. Financial terms were not disclosed. (Animal Pharm)
- EU Kindred Biosciences, Inc. announced that the European Commission has granted marketing authorization of Mirataz for bodyweight gain in cats experiencing poor appetite and weight loss resulting from chronic medical conditions. (PRNewswire)
- INDIA Mars Petcare announced it has launched its premium pet nutrition brand, IAMS, for dogs, in India. The products are available at pet specialty channels in major cities and e-commerce websites across India. (Pet Products SmartBrief – TheHindu.com)
- CHINA Avivagen announced an agreement with the research subsidiary of COFCO Biotechnology Ltd. COFCO will work with Avivagen in China, supporting efforts to obtain approval for the sale of OxC-beta Livestock for use with broilers in the country. (company press release)
- AUSTRALIA VetPartners, owned by private company Australian Veterinary Owner’s League Pty Ltd., announced an agreement to acquire National Veterinary Care in a deal valued at A$248 million (US$170 million). Under the deal, VetPartners has offered to pay A$3.70 for each share of National Veterinary Care, which represents a premium of about 56.8 per cent to the stock’s last closing price. (Reuters)
- INDIA Prompt Equipments announced a collaboration with Indian Institute of Technology, Mumbai (IIT-Mumbai), to launch a wearable belt named “BovSmart” using Internet of Things (IoT) and Artificial Intelligence (AI) technologies for timely detection of the onset of the cow’s heat cycle. (TheHinduBusinessLine.com)
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ANIMAL HEALTH STOCK PRICE TRACKER
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ANIMAL HEALTH NEWS
- US – BOVINE KOBUVIRUS Researchers at the University of Illinois have reported that bovine kobuvirus, a virus that was originally discovered in Japan in 2003, has made its way to the US. The virus – part of the Picornaviridae family – has been found in fecal samples of cattle with diarrhea, but its effects are not fully understood. The research was published in the journal Emerging Infectious Diseases. (Feedstuffs)
- US – NEWCASTLE DISEASE After reports of new cases of virulent Newcastle disease (vND) in California had appeared to be slowing down, six new cases of the disease were reported during the week beginning December 13 and ending December 19. (WattAgNet)
- AUSTRALIA – RABIES RESEARCH Scientists at Monash University and the University of Melbourne have reportedly found a way to prevent the rabies virus from shutting down vital defense responses in the immune system. Using a wild strain of rabies virus, collaborators at the Pasteur Institute in France showed that by disabling this binding, they could weaken even a highly pathogenic virus. The discovery, published in the journal Cell Reports, could lead to the development of new rabies vaccines, including oral vaccines for dogs. (JAVMA)
- UK – AVIAN VACCINE RESEARCH The Pirbright Institute has used gene editing to develop a modified poultry vaccine for avian influenza and Marek’s disease. Pirbright scientists utilized CRISPR/Cas9 to insert an avian flu gene into the turkey herpesvirus (HVT) used in Marek’s disease vaccines. Pirbright will now study the effectiveness of the vaccine in field trials. The institute’s findings were published in (Animal Pharm)
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BRAKKE CONSULTING VIEWPOINT
To start our fist News & Notes in 2020, from all of us at Brakke Consulting to all of you, Happy New Year! I hope you had some time to reflect and recharge this past week or two. I know some of you were paying attention to numbers as the year drew to a close, so perhaps there wasn’t much time for reflection and recharging.
One of the features that we added this year to the News & Notes newsletter was the stock table and I have heard from many of you that you like this addition. How did the companies in the table end the year? Well, the table in this issue has stock price data on the last trading day of 2019 and not yesterday’s close. In our industry this past year, we saw some large variation in animal health company stock price performance, from -65% to +84%. The simple average growth of the companies in this table was 11.4%.
As a comparison, the Dow Jones Industrial Average produced a 22.3% return in 2019, the best return since 2017. The S&P was up 28.9% for 2019, its biggest gain since 2013. And the NASDAQ was up 35.2% in 2019. These are impressive performances. Another way to look at performance in 2019 is to look at GDP growth rates (%) for the US, which were 2.7, 2.3 and 2.1 for Q1, Q2 and Q3, respectively. We’ll have to wait for the Q4 results to be published, but GDP growth seems to be slowing.
What can we expect in 2020? Will new product launches drive new growth in the companion animal sector? Will the pet health product channel changes impact growth rates? Will African Swine Fever outside the US drive increase in animal protein production in the US? Will the global trade and tariff battles end? About this time next year, we can reflect back on performance in 2020. What we all do will take energy, action and good decision making. Hope we’re recharged for one more year!
Bob Jones
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