Animal Health News & Notes for November 6, 2020

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Brakke Consulting’s
Animal Health News & Notes for November 6, 2020
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
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IN THE NEWS:

Brakke News
2020 Flea, Tick and Heartworm Products report – pre-order now

Earnings News
Freshpet
Heska
Hill’s
PetIQ
Phibro
Pilgrim’s Pride
Trupanion
Zoetis

Other News
Aflac
Agile Sciences
AlcheraBio
Anifera
Argenta
Armitage Pet Care
Blücare Lab
Chewy
One Health Company
PetSmart
Pet Valu
Royal Canin
Sanderson Farms
Spectrum Brands Holdings
Stonehaven Incubate
Trupanion
Vet2Pet
Veterinary Growth Partners
Virbac

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2020 US FLEA CONTROL AND HEARTWORM MARKETS REPORT
EARLY-BIRD DISCOUNT ENDS NOV. 13

Are you on top of the trends in the largest market segment in companion animal health?  Brakke Consulting will soon be publishing our 2020 report on the US Flea Control and Heartworm Markets.

The report includes valuable information on the US market for small animal parasiticides including:
– Product descriptions, prices (veterinarian cost and online pricing), and sales for the leading veterinary flea, tick and heartworm products
– an overview of the veterinary and OTC flea control markets
– discussion of new product launches, including SIMPARICA TRIO, BRAVECTO PLUS, BRAVECTO 1-MONTH, and GENERIC SELAMECTIN PRODUCTS
– 2020 survey of 300+ veterinarians
– 2020 survey of 500 pet owners

The report on the US Flea Control & Heartworm Markets will be available for a purchase price of $7,495 if ordered by FRIDAY, NOVEMBER 13, and $7,995 after that date.

Please contact Dr. Lynn Fondon at 336-396-3916 or lfondon@brakkeconsulting.com to pre-order the report, or for more information visit our website.

www.BrakkeConsulting.com

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COMPANY EARNINGS RELEASES

• Zoetis reported financial results for the third quarter of 2020. Revenue was $1.8 billion, an increase of 13% compared with the third quarter of 2019. Net income was $479 million, an increase of 11% on a reported basis. Revenue in the US segment was $996 million, an increase of 18%. Sales of companion animal products increased 21% driven primarily by growth in Simparica Trio as well as the Cytopoint and Apoquel brands. (company press release)
• Phibro Animal Health Corporation announced financial results for its first quarter ended September 30, 2020. Animal Health net sales were $128 million, an increase of 5% compared to the prior-year quarter. (company press release)
• Colgate-Palmolive Company announced results for the third quarter of 2020. Sales for Hill’s Pet Nutrition were $704 million, an increase of 11% compared to the prior-year quarter. Operating profit for the unit was $196 million, an increase of 16%. (company press release)
• PetIQ, Inc. reported financial results for its fiscal third quarter ended September 30, 2020. Net sales were $162 million, an increase of 11% compared to the same period last year. Product segment net sales were $150 million, an increase of 20.4%; Services Segment net revenues were $12.0 million compared to $24.5 million for the same period last year. Third quarter net loss was $(64.5) million compared to net loss of $(8.8) million for the prior year period, primarily due a $53.2 million tax expense and $4.7 million in additional interest, depreciation, and amortization expense related to the Capstar acquisition. (company press release)
• Heska Corporation reported financial results for its third quarter ended September 30, 2020. Consolidated revenue was $56.6 million including contribution from scil animal care. North America revenue was $34.4 million, an increase of 16% year-over-year.  International revenue was $22.2 million. Net loss attributable to Heska was $(5.2) million compared to a loss of $(310,000) in the prior-year quarter. (company press release)
• Trupanion, Inc. announced financial results for the third quarter of 2020. Total revenue was $130 million, an increase of 31% compared to the third quarter of 2019. Total enrolled pets (including pets from other business segment) was 804,251 at September 30, 2020, an increase of 31% over the third quarter of 2019. Net loss was $(2.6) million compared to net income of $0.8 million in the third quarter of 2019. (company press release)
• Freshpet, Inc. reported financial results for its third quarter ended September 30, 2020. Net sales were $84.2 million, an increase of 29% compared to the prior-year quarter. Net income was $3.5 million, compared with prior year net income of $3.1 million. (Globe Newswire)
• Pilgrim’s Pride reported its third-quarter 2020 financial results. Net sales were $3.08 billion, up from $2.78 billion in the third quarter of 2019. Net income was $33.9 million, down sharply from $110.1 million during the same quarter in 2019. (Feedstuffs)

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COMPANY NEWS RELEASES

• The FDA announced the approval of Virbac‘s Cyclavance (cyclosporine oral solution), the first generic cyclosporine for the control of atopic dermatitis in dogs. (FDA)
• Royal Canin USA announced the launch of Hematuria Detection, a litterbox product designed to identify early signs of urinary disease in cats. The product, launched in partnership with Canada-based Blücare Lab, consists of white granules sprinkled over clean cat litter. The granules turn blue if blood is detected in the cat’s urine. (Vet Advantage)
• PetSmart announced it is shelving a $4.65 billion debt sale that would have helped finance its split from its online counterpart Chewy Inc. after struggling to get buyers on board. The company withdrew its joint junk bond and leveraged loan offering, citing market conditions. (Bloomberg.com)
• Pet Valu US, a specialty retailer of pet food and supplies, announced it will close all of its 358 stores and warehouses following a wind-down of its operations “due to severe impact from COVID-19.” (Pet Product News)
• Trupanion, Inc. and Aflac Incorporated announced they have entered into an exclusive alliance agreement to sell pet insurance in worksites across the US. The companies also agreed to explore potential opportunities in Japan’s growing pet insurance market. In connection with the alliance agreement, Aflac will purchase an approximate 9% stake in Trupanion to further drive alignment. (company press release)
• The One Health Company announced it has secured $10 million to accelerate the expansion of Fidocure, its lead canine cancer DNA sequencing platform. The financing has been supplied by Polaris Partners and Borealis Ventures, with participation from One Health Company’s existing investors. (IHS Markit Connect)
• Vet2Pet announced it has been chosen by Veterinary Growth Partners (VGP) as its preferred client engagement platform and practice app. VGP has more than 5,500 member hospitals. (Vet Advantage)
• Argenta announced it unifying its global branding by bringing its US contract research business AlcheraBio under the same name. AlcheraBio has been part of its current parent firm since 2008. (IHS Markit Connect)
• Stonehaven Incubate and Agile Sciences announced the launch of Anifera to develop the latter’s Agilyte family of molecules. Anifera will have exclusive rights to manufacture, develop and commercialize the Agilyte family of molecules in all animal health applications. The Agilyte compounds have been modified from a naturally occurring molecule that has anti-biofilm properties which may increase the susceptibility of highly resistant strains of bacteria to antibiotics. (IHS Markit Connect)
• Sanderson Farms announced that it has rejected an unsolicited buyout offer from Duration Capital Management to acquire the company for $142 per share, a price that the company says substantially undervalues Sanderson Farms and its future prospects and is significantly below the 52-week high share price of $179.45. (Feedstuffs)
• UK Spectrum Brands Holdings announced the acquisition of Armitage Pet Care, marketing premium pet treats and toys throughout the UK and continental Europe. Armitage generated over $80 million in net sales over the past twelve months, and is being acquired at a purchase price of approximately $180 million, subject to certain adjustments. (Global Pets)

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ANIMAL HEALTH STOCK PRICE TRACKER

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ANIMAL HEALTH NEWS

• DENMARK – COVID-19 The Danish government has initiated a cull of its mink population on farms in the country after detecting a mutated COVID-19 virus strain. The mutated strain has been transmitted to 12 people in Northern Jutland, where a large majority of Denmark’s farms are located. Up to 17 million animals will be culled, in a move to ensure development of a vaccine against COVID-19 and efforts to control the disease will not be in vain. The first mink farms found to be infected with the COVID-19 virus were identified in mid-June; the virus has since spread to 207 farms as of November 4. (IHS Markit Connect)
• UK – AVIAN INFLUENZA Defra authorities have reported two outbreaks of avian influenza in the UK just days after raising the alert level following an incident in the Netherlands. A low pathogenic H5N2 strain had been found at a small commercial farm in Kent; and an H5N8 variant of the disease was found on a broiler breeder farm over 241 miles away in Cheshire. All 13,000 birds at the latter property will be culled; further testing is underway to determine if the H5N8 variant is a highly pathogenic strain and whether it is related to the virus currently circulating in Europe. The UK has remained free of highly pathogenic avian influenza since 2017. (IHS Markit Connect)

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BRAKKE CONSULTING VIEWPOINT
I don’t know if Trupanion insured pet ducks in the past, but it might now that Aflac has taken a 9% stake in the company and will start selling Trupanion pet health insurance at work sites.  Aflac is the largest supplier of supplemental insurance.  It also has a large presence in Japan.  And of course, Aflac television commercials have featured the iconic and comedic duck for the last 20 years.

We probably get more inquiries about pet insurance than just about any other topic.  Though still relatively small, it’s one of the fastest growing pet products in the US.  That growth no doubt will be further accelerated by the involvement of well-known companies like Aflac – and of course Nationwide, which is the largest pet health insurer in the US.

John Volk
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YOUR VIEW
Last week we asked “How do you think your company will look back on 2020?”  32% said it has been a difficult year.  But twice as many – 64% – said it has been a year of opportunity.  That appears to be confirmed by the rosy earning reports we see in this week’s newsletter.

This week
Let’s probe the topic of company performance a little further.  This week our question is:  How will your company do against plan in 2020?