Animal Health News & Notes for May 7, 2021

Brakke Consulting’s
Animal Health News & Notes for May 7, 2021
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
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IN THE NEWS:

Earnings News
Central Garden & Pet
Covetrus
Freshpet
Heska
Hill’s
IDEXX
MWI
PetIQ
PetMed Express
Phibro
Trupanion
Zenoaq
Zoetis

Other News
Accord Healthcare
Adam & Eve/DDB
Ascension Healthcare
Cronus Pharma
Elanco
Grand Meadows
GuardianVets
Himalayan Corporation
Iams
Kinderhook Industries
KKR
Mazen
Natural Pet Food Group
Petco
PetVivo
Prairie Dog Pet Products
Premier Vet Alliance
Rayne Clinical Nutrition
Regenosine
Small Door Veterinary
Stonehaven Incubate
TrupanionVetosine
Walmart

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COMPANY EARNINGS RELEASES

• Zoetis reported its financial results for the first quarter of 2021. The company reported revenue of $1.9 billion, an increase of 22% compared with the first quarter of 2020. Net income was $559 million, an increase of 32% on a reported basis. Revenue in the US segment was $933 million, an increase of 19%. Sales of companion animal products increased 32% driven by growth in its parasiticides portfolio including the recently launched Simparica Trio brand. (company press release)
• IDEXX Laboratories, Inc. announced first quarter 2021 results. Revenues were $778 million for the first quarter of 2021, an increase of 24% as reported and 21% organic. Net income was $204 million, an increase of 49% from the prior-year quarter. Companion Animal Group revenue was $693 million, an increase of 26%. (company press release)
• Nippon Zenyaku Kogyo (Zenoaq) reported results for its full fiscal year ended March 31, 2021. Revenues were JPY 40,694 million ($374 million), an increase of 4%. (IHS Markit Connect)
• Phibro Animal Health Corporation announced financial results for its third quarter ended March 31, 2021. Net sales for the Animal Health segment were $134 million, a decline of 3% from the prior-year quarter. (company press release)
• Covetrus, Inc. announced financial results for the first quarter of 2021. Net sales were $1,102 million, an increase of 3.5% compared to the prior-year quarter. Net loss attributable to Covetrus was $(16) million compared to a net loss of $(33) million in the prior-year quarter. North America segment net sales were $635 million, an increase of 15% compared to the same period of the prior year. (company press release)
• Colgate-Palmolive announced results for the first quarter of 2021. Sales for Hill’s Pet Nutrition were $786 million, an increase of 9% compared to the prior-year quarter. Operating profit for the segment was $215 million, an increase of 6%. (company press release)
• AmerisourceBergen reported results for the second quarter of its fiscal 2021. MWI Animal Health‘s revenues were $1.13 billion, an increase of 8% over the prior-year quarter. (IHS Markit Connect)
• Heska reported results for the first quarter of 2021. Consolidated revenue was $60.5 million, an increase of 97% year-over-year. North American revenue was $37.3 million, an increase of 35%. Net income was $2.1 million, an increase of 139%. (company website)
• PetIQ, Inc. reported financial results for the first quarter of 2021. Net sales were $254 million, an increase of 36% compared to the prior-year quarter. Product segment net sales were $230 million, an increase of 38%; Services Segment net revenues were $24 million, an increase of 19%. Net income was $2.4 million compared to a net loss of $(2.6) million in the year-ago period. (company press release)
• Freshpet, reported financial results for the first quarter of 2021. Net sales were $93 million, an increase of 33% compared to the first quarter of 2020. Net loss was $(10.9) million, compared with prior year net loss of $(3.6) million. Adjusted EBITDA was $7.8 million, compared to $5.7 million in the year-ago period. (Globenewswire)
• PetMed Express, Inc. announced its financial results for its fiscal year ended March 31, 2021. Net sales were $309 million, an increase of 9% compared to the prior year. Net income was $30.6 million, an increase of 18% from the prior year. (Globenewswire)
• Central Garden & Pet Company announced financial results for its fiscal second quarter ended March 27, 2021. Net sales for the Pet segment increased 21% to $492 million. Pet segment operating income increased 43% to $62 million. (company press release)
• Trupanion, Inc. announced financial results for the first quarter of 2021. Total revenue was $155 million, an increase of 39% compared to the first quarter of 2020. Total enrolled pets (including pets from our other business segment) was 943,854 at March 31, 2021, an increase of 37%. Net loss was $(12.4) million, which is inclusive of stock-based compensation expense of $8.4 million. (company press release)

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COMPANY NEWS RELEASES

• Elanco Animal Health announced the launch of Credelio Cat (lotilaner), the first oral flea and tick product for cats. The small, vanilla and yeast-flavored product maintains fast-acting, sustained flea efficacy throughout the month and also protects against black-legged ticks. (company press release)
• The FDA announced it has approved Cronus Pharma Specialities India Private Ltd’s generic Amoxicillin and Clavulanate Potassium Tablets for use in dogs and cats. (FDA)
• The FDA announced it has approved Accord Healthcare’s generic Enrofloxacin for use in dogs. (FDA)
• Iams and Adam & Eve/DDB announced the beta launch of NoseID, a new app uses nose-scanning smartphone technology to help identify lost dogs by their unique nose prints. Using the app, pet owners can make a profile for their dog, including nose scans and a physical description, that can then be used to identify the dog if it’s lost. (Vet Advantage)
• Trupanion announced it intends to enter the food and wearable technology markets and expand farther overseas as part of its strategic plan. The pet food brand, Landspath, were developed in partnership with therapeutic food manufacturer Rayne Clinical Nutrition and will be sold directly through the veterinary channel starting in 2021. (Todays Veterinary Business)
• Petco Love has launched a searchable database using facial recognition technology to help reunite lost pets with their families. According to the nonprofit, about 1,000 shelters and rescues across the country will adopt the database, called Petco Love Lost. (Vet Advantage)
• Walmart announced the launch of PRO+, a vet-formulated dog and cat food line as part of its private label Pure Balance brand. (Pet Product News)
• Prairie Dog Pet Products, a portfolio company of Kinderhook Industries, LLC, announced its acquisition of Himalayan Corporation, which produces premium, hard cheese dog chews. Financial terms were not disclosed. (Pet Age)
• PetVivo announced it has obtained a US patent related to its encapsulated or coated stent systems, which are coated with its biocompatible coacervate biomaterial. The patent covers the firm’s biocompatible stents for treatment in both companion animals and humans. (IHS Markit Connect)
• Premier Vet Alliance announced the launch of the Content Cloud, a content marketing design platform that will give clinics the opportunity to download pre-designed graphics and designs or create their own with an easy-to-use tool. The platform is launching with a variety of social media banners, email banners, including appointment reminders and posters that clinics can print themselves. (company press release)
• GuardianVets and American Animal Hospital Association announced the launch of an online telehealth course that offers guidance for veterinary professionals to help them implement strong telehealth programs. (Vet Advantage)
• Small Door Veterinary announced that it has raised $20 million in a Series A fundraising round. Small Door Veterinary is a 1-year-old concierge (members only) practice in Manhattan’s West Village that offers an around-the-clock telemedicine service and in-clinic services. The company plans to two more locations in the New York metro area by the end of 2021. (Todays Veterinary Business)
• Ascension Healthcare and Grand Meadows have signed an exclusive deal to launch Nanoflex, a topical, non-pharmaceutical lubricating joint support product for horses, dogs and cats. Nanoflex uses Ascension’s sequessome technology, which are ultra-deformable, hydrophilic spheres made from phospholipid and surfactant molecules arranged as a bilayer. (IHS Markit Connect)
• Stonehaven Incubate announced it has partnered with human health tissue regeneration specialist Regenosine to launch Vetosine, a new company focused on tackling osteoarthritis in animals. Vetosine will develop and commercialize an adenosine-based disease-modifying osteoarthritis technology for animals, with an initial focus on treating the disease in dogs. (IHS Markit Connect)
• Mazen Animal Health announced it has closed the second tranche of its series seed funding round in the amount of $2 million. Mazen is developing oral vaccines for animals using its antigen expression platform, which is based on maize grain. Mazen’s lead candidate is a vaccine against porcine epidemic diarrhea virus (PEDV). (IHS Markit Connect)
• NEW ZEALAND Investment firm KKR announced it has acquired Natural Pet Food Group. The investment will support Natural Pet Food’s international expansion. Financial terms were not disclosed. (Pet Business)

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ANIMAL HEALTH STOCK PRICE TRACKER 

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ANIMAL HEALTH NEWS

• POLAND – AVIAN INFLUENZA Poland is currently contending with 262 outbreaks of bird flu, the country’s highest recorded number of infections. Over six million birds have been culled to stem the spread of the disease. Animal health authorities believe that the outbreaks are due to the high concentration of poultry farms in certain locations. (Poultrysite.com)
• US – PET INSURANCE The North American Pet Health Insurance Association (NAPHIA) announced the release of their 2021 State of the Industry Report. Total premiums sold in 2020 were a record $2.174 billion, up over 26% from 2019; and over 3.45 million pets insured across North America, up 22.5% from 2019. (association press release)
• US – ASF RESEARCH Researchers at Plum Island Animal Disease Center have developed a recombinant vaccine against African swine fever (ASF) that could potentially help to curb transmission by wild boar. The vaccine candidate – created by deleting the I177L gene from the genome of the highly virulent Georgia strain of the ASF virus (ASFV-G) – has been shown that it can be administered oronasally, a critical attribute for potential vaccination of wild swine populations. (IHS Markit Connect)

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BRAKKE CONSULTING VIEWPOINT
Today’s newsletter has a flurry of earnings reports that range from good to spectacular.  Granted, the year-ago comps were impacted by the initial shutdown due to COVID-19.  Still, many companies printed excellent results in both the companion animal and food animal sectors.

More good news came in the form of the annual State-of-the-Industry report from the North American Pet Health Insurance Association (NAPHIA).  Number of pets insured and gross written premium were both up more than 20%.  Research studies conducted by both NAPHIA and the American Veterinary Medical Association show that pet owners spend more for veterinary care on insured pets .  So that’s bullish for all players.

With these reports, and the rapid recovery of the US economy, 2021 has the potential to be a banner year for the industry.

John Volk

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YOUR VIEW

Last week we asked, “What drivers in the external environment do you think are the most impactful on companies in the animal health and nutrition industry?”  50% of you answered:  “Alterations in consumer and client expectations.”  Second-most votes – about 21% – said “New developments in technology.”

This week

Now it’s time to dust off your crystal ball.  1Q21 was obviously a great start to the year for many companies.  What do you expect global growth in animal health to be in 2021?  (Hint: Growth typically runs about 4.5%-5.0%.)

I’m a big believer in the law of large numbers.  Let’s all participate in this week’s quiz.  Please share your view.