Animal Health News & Notes for October 16, 2020
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
IN THE NEWS:
A&M Capital Partners
Better Choice Company
BrightPet Nutrition Group
ECO Animal Health
Elanco (tender offer)
TRC Capital Investment
Vetio Animal Health
COMPANY EARNINGS RELEASES
- Virbac SA reported results for the third quarter of 2020. Revenue reached EUR 235.6 million ($275 million), an increase of 1% compared to the same period in 2019 (7% at constant exchange rates, and 11% excluding the impact of the divestment of Sentinel). (Globenewswire)
AVMA Economic Summit
October 26-28, 2020
AVMA Economic Summit: Transformation through collaboration
Register today – and be a part of the only event focused solely on the economic impact of veterinary medicine. Gain insight from veterinary and economic leaders on current trends and innovations – including a presentation from John Volk, Brakke Consulting, on how COVID-19 has impacted pet care.
Special thanks to: Presenting Partner – Merck Animal Health; Premier Partner – CareCredit; Community Partners – Royal Canin, IDEXX. Click here and then scroll down for a sneak preview.
COMPANY NEWS RELEASES
- Elanco announced it has received a notification of an unsolicited “mini-tender” offer by TRC Capital Investment Corporation to purchase up to 4,000,000 shares of Elanco common stock, representing approximately 1.00% of the outstanding shares of Elanco common stock at $26.45 per share, which is lower than the trading price as of the date of the offer. Elanco does not endorse TRC Capital’s mini-tender offer and is not associated in any way with TRC Capital, its mini-tender offer or its mini-tender offer documents. (company press release)
- Elanco announced the termination of an exclusive license agreement between Aratana Therapeutics and Advaxis originally signed in 2014, before Elanco acquired Aratana in 2019. It granted Aratana access to Advaxis’ ADXS-cHER2 technology for the development and commercialization of treatments for osteosarcoma and other cancer indications in companion animals. (IHS Markit Connect)
- Petco announced it is rebranding itself as “Petco, The Health + Wellness Co” from the former “Petco Animal Supplies.” (GlobalPet)
- ECO Animal Health announced that it has entered two worldwide exclusive research partnerships to develop novel vaccines for use in pigs with The Pirbright Institute and The Vaccine Group (TVG). The first collaboration will utilize innovative technologies at Pirbright to develop killed PRRSV vaccine candidates; the second collaboration will test vaccine candidates at Pirbright created using TVG technology to insert non-infectious PRRSV genes supplied by Pirbright into a benign herpesvirus. (Directorstalkinterviews.com)
- Avivagen announced that, given the recent significant ramp up in placed orders for its OxC-beta Livestock and the upcoming launch of its human nutraceutical product, it has obtained additional debt financing of $500,000 through an unsecured Promissory Note from a Canadian Financial Institution. (company press release)
- Medgene Labs, a livestock vaccine manufacturer, announced it is developing a SARS-CoV-2 vaccine for pet cats and ferrets, and possibly for farmed mink. If all goes as hoped with testing and funding, the vaccine could be ready to protect pets nationwide in 2021. (AVMA SmartBrief – KTIV.com)
- The FDA is advising pet owners and veterinary professionals that several pet food products manufactured by Sunshine Mills may contain unsafe levels of aflatoxin, a toxin produced by the mold Aspergillus flavus, which can grow on corn and other grains. (FDA
- Better Choice Company announced the closing of an additional $1.1 million of Series F financing, bringing the total amount raised to $18.9 million. The company plans to allocate a portion of the proceeds to improve its online and physical sales presence in Asia. In June, one of Better Choice’s subsidiaries and largest brand, Halo, Purely for Pets, received Product Import Registrations for 15 Holistic Dog and Cat Food Diets from the Ministry of Agriculture and Rural Affairs of China. (Globe Newswire)
- CannPal Animal Therapeutics, a company focused on developing and commercializing prescription and non-prescription products from cannabis plants, announced it has signed a manufacturing agreement with Vetio Animal Health to commence manufacturing activities in the US. The agreement is to commence manufacturing activities for commercialization of DermaCann – an oral nutraceutical rich in Omega 3 and 6 fatty acids – in the US in early 2021. (TheMarketHerald.com.au)
- Alvarez & Marsal (A&M) Capital Partners announced the acquisition of a majority stake in BrightPet Nutrition Group, a manufacturer and co-manufacturer of several pet food and treat brands. Financial terms were not disclosed. (GlobalPets)
- JBS announced that its controlling shareholder, J&F Investimentos S.A. had reached an agreement with the U.S. Department of Justice regarding violations of the U.S. Foreign Corruption Practices Act (FCPA) in connection to a probe alleging that the company bribed Brazilian government officials as well as other companies to financially benefit J&F. J&F agreed to pay a fine of approximately $256.5 million, with a 50% credit for amounts paid to Brazilian authorities. Therefore, J&F will make a payment of approximately $128.3 million to the American authorities. JBS said it is not a party to the plea agreement and will not bear any liabilities arising from it. (Feedstuffs)
- Pilgrim’s Pride announced Oct. 14 that it has entered into a plea agreement with the U.S. Department of Justice Antitrust Division for its alleged role in a price-fixing investigation in the broiler industry. In the plea agreement, Pilgrim’s and DOJ agreed to a fine of approximately $110.5 million for restraint of competition that affected three contracts for the sale of chicken products to one U.S. customer. The company said the agreement does not recommend a monitor, any restitution or probationary period and states that DOJ will bring no further charges against Pilgrim’s in this matter, provided that the company complies with the terms and provisions of the agreement. (Feedstuffs)
- EU The European Medicines Agency’s (EMA) Committee for Medicinal Products for Veterinary Use has recommended Dechra‘s Rexxolide (generic tulathromycin) for marketing approval. Rexxolide is indicated for the treatment of cattle, swine and sheep. (IHS Markit Connect)
ANIMAL HEALTH STOCK PRICE TRACKER
ANIMAL HEALTH NEWS
- ASIA – ASF China and South Korea have reported new cases of African swine fever (ASF) in pigs, raising concerns over a resurgence of the disease in Asia. China’s Agriculture Ministry said ASF was detected in a batch of piglets seized in Youyang Country, Chongquig City. China lost tens of millions of pigs after ASF first reached the country in August 2018; the country has recently been making progress with efforts to control the disease, allowing a steady recovery of its pig herd. South Korea detected ASF in pigs at two separate farms over the past few days, the first time South Korea has found ASF in commercial pigs since October 2019. (IHS Markit Connect)
- DENMARK – COVID IN MINK The Danish government announced that after an increase in COVID-19 cases in mink in late September, the government has opted to cull mink farms infected with COVID-19, those suspected of being infected, as well as healthy herds within a radius of 8 kilometers of an infected herd. In total, roughly one million mink are expected to be culled over the coming months. Denmark is the world’s largest producer of mink skins. (GAIN reports)
- US – COVID IN MINK Dead mink on a Wisconsin farm have tested positive for the virus that causes COVID-19, the first documented infection within Wisconsin’s mink industry. Several hundred animals have been infected, and the farm has been placed under quarantine. Wisconsin is the second state with confirmed coronavirus infection at a mink farm. The USDA in August confirmed outbreaks at two Utah ranches. There have also been outbreaks at farms in the Netherlands, Denmark and Spain. (madison.com)
- US – BRUCELLOSIS RESEARCH The USDA’s Animal & Plant Health Inspection Service (APHIS) has issued a draft policy statement through the Federal Select Agent Program on research with Brucella species in outdoor settings. The policy statement will allow researchers to conduct brucellosis studies in large animals that cannot be easily housed or studied indoors. The ability to conduct outdoor host animal studies involving swine, elk, bison and cattle will help APHIS gain important tools and information to continue with brucellosis eradication. (Feedstuffs)
- US – ANTIMICROBIAL RESISTANCE The FDA announced a potential revised process and criteria for ranking antimicrobial drugs based on their importance in human medicine. To describe these potential revisions in detail, FDA has published a concept paper, and issued a Request for Comments in the Federal Register, to obtain early public feedback on the content of the paper. Click here for more information. (FDA)
- US – DAIRY OUTREACH In an effort to bring the sustainability story to a younger generation of consumers, Dairy Management Inc. (the dairy checkoff) is launching an initiative to meet them where they are by partnering with influential “gaming” personalities on the Minecraft game. After virtual visits at several dairy farms, the gaming influencers will take what they learned and build a dairy farm in Minecraft, where they will be watched by an estimated 40 million followers. DMI noted that nearly 90% of Gen Z classify themselves as gamers. (Feedstuffs)
- US – RURAL VETERINARY SUPPORT The National Institute of Food and Agriculture within the USDA announced that it had awarded nearly $3 million in grants to support rural veterinary services though the Veterinary Services Grant Program. Grants went to 10 rural practices in various regions. Grants also went to seven educational projects. (JAVMA news)
- US – VETERINARY EDUCATION The AVMA announced that veterinary colleges accredited by the AVMA Council on Education must now include dentistry in their curricula. Previously, many veterinary colleges offered the topic as an elective course. (AVMA.org)
BRAKKE CONSULTING VIEWPOINT
As I listened to the news over the past couple of weeks, one theme I continue to hear regarding the COVID-19 pandemic is the need for effective contact tracing. This theme gained strength because of the COVID-19 outbreak in the White House, which has more diligent health monitoring procedures in place than the rest of the country. It seems the Agriculture Industry probably has a leg up on the rest of the country as it relates to disease tracing.
Almost 8 years ago, the USDA published a final rule (9 CFR, part 86) titled “Traceability for Livestock Moving Interstate”. The rule establishes requirements for the official identification of livestock and documentation for certain interstate movements of livestock. Specifically, unless exempted, livestock belonging to species covered by the regulations that are moved interstate must be officially identified, and be accompanied by an Interstate Certificate of Veterinary Inspection (ICVI) or other movement document.
Also, top Animal Health and food producing companies have invested in DNA testing capabilities to track the source of disease in livestock herds. While we may question contact tracing procedures to track human infections, the USDA, in cooperation with the livestock supply chain has implemented procedures to quickly determine where diseased animals have been and identify other at-risk animals to contain disease before it impacts more animals, producers and the supply chain.
Last week, we asked ”Given the recent administration’s position on trade, how do you feel about the impact on the animal health business?” Over half of you (57%) thought that there was a moderate impact, but it was limited to certain segments of animal health. Another 24% thought there was some impact, but other factors have more effect. It sounds like most of you feel that the impact of trade positions have not significantly impacted the animal health business as a whole.
In an article shared with me from “meatingplace.com”, from Mar. 15 through Aug. 23, dollar sales at the grocery store meat department rose by almost 32% while volume sales increased 19 year-on-year. That amounts to an additional $8.6 billion in meat department sales, with an extra $4 billion for beef, $1.2 billion for chicken and $893 million for pork.” Keep in mind that there were of course offsetting sales in food service sales during this time.