Animal Health News & Notes for November 9, 2018
Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon DVM MBA
IN THE NEWS:
Brakke Consulting news
US Flea Control & Heartworm Markets report – pre-order now
Companion Animal Health
Elanco – Experior
Elanco – Novozymes
Elanco – vaccine plant
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COMPANY EARNINGS RELEASES
• Elanco reported results for the third quarter of 2018. Revenue was $761 million, an increase of 9% compared to the third quarter of 2017. Revenue, excluding strategic exits, grew 13% to $733 million; removing the impact of foreign currency exchange rates, growth was 15%. Reported net income grew $80.9 million in the third quarter to $60.2 million. (company website)
• Phibro Animal Health Corporation announced its financial results for its first quarter ended September 30, 2018. Animal Health sales were $131 million, an increase of 2% compared to the comparable prior-year quarter. (company press release)
• Ouro Fino Saúde Animal reported results for the third-quarter of 2018. Revenues increased 23% to R$160.4 million ($42.6 million) during the quarter. Adjusted EBITDA for the third quarter was R$42.1 million ($11.2 million) compared to R$29.8 million reported this time last year. (Animal Pharm)
• Heska reported financial results for its third quarter 2018. Net revenue was $31.0 million, an increase of 2%. Net income was up 10% to $3.4 million. (company website)
• Parnell reported results for the first nine months of 2018. Revenues were approximately Aus$20 million (US$14.5 million), an increase of 39% over the prior year period. Parnell’s loss for the nine months was Aus$(4) million (US$2.9 million), compared to Aus($4.5) million in the corresponding period of 2017. (Animal Pharm)
• Kindred Biosciences, Inc. announced financial results for the third quarter of 2018. Net product revenues were $0.6 million; KindredBio’s first product, Mirataz, became available on July 9, 2018. The net loss was $(13.0) million compared to a net loss of $(7.9) million for the same period in 2017. (company website)
• Henry Schein, Inc. reported financial results for the third quarter of 2018. Animal Health sales of $899 million, an increase of 2%, consisting of 3.4% growth in local currencies and a 1.5% decline related to foreign currency exchange. North American Animal Health sales were $461 million, an increase of 3%. (company press release)
• Pilgrim’s Pride reported results for the third quarter of 2018. Net sales for the quarter were $2.70 billion, down 3.2% from the same quarter last year. Net income during the quarter was $29.3 million, compared to $232.6 million in the 2017 third quarter. (Feedstuffs)
COMPANY NEWS RELEASES
• The FDA announced the approval of Elanco’s Experior (lubabegron Type A medicated article), a beta-adrenergic agonist/antagonist drug that, when fed to beef cattle under specific conditions, results in less ammonia gas released as a byproduct of their waste. FDA noted that evidence gathered in the studies did not demonstrate any health benefit or performance advantage in beef cattle, such as weight gain or feed efficiency, as a result of receiving lubabegron, although multiple studies indicated that the product is safe to administer. (Feedstuffs)
• Elanco Animal Health announced a new global R&D collaboration with Novozymes A/S to develop nutritional health products for beef cattle and dairy cows globally. The partnership will identify and develop new products and tools to help manage the animal’s microbiome, control infections, and reduce gut inflammation while decreasing the need for medically important antibiotics. (company press release)
• Midmark Corp. announced the company has broken ground on a 107,000-square-foot expansion, including a technology center that will bring together Midmark engineers, designers and experts to develop new approaches, innovative technologies and proven solutions to enable a better care experience for caregivers and patients in the medical industry. (company press release)
• Trupanion announced it is shutting down a veterinarian rewards program amid an investigation into how the pet health insurer’s policies are sold, according to a Today’s Veterinary Business article. The Washington state Office of the Insurance Commissioner is looking into whether the company “is offering inducements to organizations in exchange for referrals to purchase Trupanion’s insurance products,” according to The Wall Street Journal. (Vet Advantage)
• Heska Corp. has agreed to pay $6.75 million to settle a class-action lawsuit alleging the company sent unsolicited faxes to an Illinois veterinarian and more than 40 other recipients in violation of the Junk Fax Prevention Act. The company denied the claims but confirmed the settlement in documents filed with the U.S. Securities and Exchange Commission. According to the Denver Business Journal, the lead plaintiff was also a plaintiff in a similar successful class-action lawsuit against the MetLife Inc. insurance company and is currently suing Virbac USA and Fetch Inc. (Todays Veterinary Business)
• ECO-Pharm Limited, a joint venture of Pharmgate and ECO Animal Health, announced plans for expansion of its of swine vaccines into Japan and Brazil. ECO-Pharm Limited was established in April and began steps for registration, marketing, sales and distribution of Pharmgate swine vaccine products in the United Kingdom, the European Union and the Commonwealth of Independent States. (company press release)
• LifeLearn announced its first entry into the pet services industry through a new partnership with Gingr, an online appointment and customer management solution for dog daycare, boarding, training and grooming businesses. LifeLearn will be integrating pet-owner health articles from LifeLearn’s ClientEd library into Gingr’s software system starting Jan. 1, 2019. LifeLearn will be launching its WebPS product, offering Pet Service companies four levels of custom websites to help promote their business to pet owners. (PRWeb)
• Vos Bio-Tech, a new company, has been formed with the intention of buying Elanco’s large animal vaccine facilities in northwest Iowa. Elanco planned to close the facility, which opened as Grand Labs in 1979; Novartis purchased it in 2003, and was acquired by Elanco in 2015. (kiwaradio.com)
• Baycom Diagnostics announced the launch of the A1Care (A1C) diabetes test for horses. (company announcement)
• Litecure’s veterinary division, Companion Animal Health, announced that its Companion Nano Therapy has advanced toward commercialization with a potential launch date in the US of the first half of 2019. Companion Animal Health has an exclusive license and commercialization partnership with Nanospectra Biosciences for the use of nanoshells as an ablative treatment of solid tumors and surface lesions in companion animals. (Animal Pharm)
• ProShare Advisors LLC announced the launch of an exchange-traded investment fund called Pet Care ETF. An exchange-traded investment fund is similar to a mutual fund but is traded on stock exchanges. Shares of IDEXX, Dechra, PetMed Express and about 20 other pet-related companies are among the initial holdings. ProShares calls Pet Care ETF the first of its kind in the pet care industry. (Todays Veterinary Business)
• BELGIUM Evonik Industries announced it has completed the acquisition of Porphyrio NV, the KU Leuven spin-off company. Porphyrio provides cloud-based specialty software to professional poultry producers worldwide for processing and analyzing livestock data. Financial terms were not disclosed. (Feedstuffs)
ANIMAL HEALTH NEWS
• US – BIOSECURITY GIUDELINES The American Animal Hospital Association (AAHA) announced the publication of the 2018 AAHA Infection Control, Prevention, and Biosecurity Guidelines, offering practical standard operating procedures (SOPs) to guide the veterinary team in creating a truly clean and safe environment. The Guidelines are supported by an educational grant from Virox Animal Health, and are available in the Journal of the American Animal Hospital Association (JAAHA) or online at www.aaha.org/biosecurity. (association press release)
• US – DAIRY CONSOLIDATION A new report from CoBank’s Knowledge Exchange Division found that dairy farms with more than 1,000 cows now comprise nearly 50% of the dairy industry, up from only 29% the decade prior, showing consolidation of dairy operations has increased significantly. (Vet Advantage)
• BRAZIL – CATTLE GENETICS Researchers at São Paulo State University (UNESP) in Brazil who are studying the genome of the Gir breed of Zebu cattle have identified 35 genes associated with reproduction, milk composition, growth, meat, carcass, health and body conformation traits. The research was published in the journal PLOS ONE. (Feedstuffs)
• FINLAND – HONEYBEE VACCINE The University of Helsinki in Finland announced that PrimeBEE has developed the first-ever vaccine for honeybees and other pollinators. The group discovered that feeding a pathogen to the queen could result in an immune response in the queen’s eggs. The first vaccine is an oral vaccine against American foulbrood. (Feedstuffs, company website)
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BRAKKE CONSULTING VIEWPOINT
The financial reports by public companies this week again demonstrate the growth occurring in the animal health market. Even some of the smaller companies that have been struggling are showing growth in both revenue and operating profits.
I’m reminded that there are only a few weeks left in 2018 for some companies to recover if their revenue performance is below expectations for the first three quarters. However, most all of the leading companies have strong performances YTD so we might even see some slowing of revenue growth during the last quarter. It is always nice to be ahead of expectations which allows for some flexibility as companies begin to focus on 2019. All indications are that, except for some food animal areas, 2019 will be another strong revenue growth year for the industry. We are observing some increasing investment in employees and facilities that should positively impact the future for a number of companies.
Have a great weekend!
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