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Brakke Consulting’s
Animal Health News & Notes for September 1, 2023
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
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IN THE NEWS:
Brakke Consulting News
Brakke Search
Earnings News
Apiam Animal Health
Chewy
J.M. Smucker
Kane Biotech
Patterson
Phibro
Other News
Alphia
AmerisourceBergen
AniCell Biotech
BetterVet
Boehringer Ingelheim
Cencora
ElleVet Sciences
Feeders Pet Supply
Hill’s
Inspire Veterinary Partners
J.H. Whitney Capital Partners
Mercury Fund
MySimplePetLab
MWI Animal Health
Otto
PAI Partners
PetMedix
Purina
ScribeAmerica
TeleVet
Vetsource
Zigzag
Zoetis
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BRAKKE CONSULTING
Too many inappropriate candidate resumes clogging up your email? Spending your precious time sorting through an endless array of candidates? Let Brakke Search do the legwork for you! We use our broad network and decades of experience to present you a highly qualified short list of the industry’s top talent. We’ve been serving the animal health and nutrition industry exclusively since 1986. We even conduct a free qualitative candidate fit assessment to help guide you in final interviews! Find out more at our website or by contacting Jeff Santosuosso at jeff@brakkeconsulting.com
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EARNINGS NEWS RELEASES
- Patterson Companies, Inc. reported results for its fiscal 2024 first quarter ended July 29, 2023. Reported net sales in the Animal Health segment were $1.01 billion, a year-over-year increase of 5%. Segment operating income was $29.7 million, an increase of 36%. (company press release)
- Phibro Animal Health Corporation announced financial results for its fiscal year ended June 30, 2023. Net Animal Health sales were $660 million, a year-over-year increase of 9%. Net sales of MFAs and other increased 7%; net sales of nutritional specialty products grew 10%; and net sales of vaccines increased 13%. Adjusted EBITDA for the Animal Health segment was $37.9 million, a 13% increase. (company press release)
- The M. Smucker Co. announced results for the first quarter ended July 31, 2023, of its 2024 fiscal year. U.S. Retail Pet Foods net sales were $441 million, a decrease of 40%. Excluding $368 million of non-comparable net sales in the prior year related to the divested pet food brands, net sales increased 22%. Segment profit was $81.3 million, a decline of $39.0 million. (Seekingalpha)
- Chewy, Inc. released its financial results for the second quarter of fiscal year 2023 ended July 30. Net sales were $2.78 billion, an increase of 14% year over year. Net income was $18.9 million, a decline of 15%. (company press release)
- Apiam Animal Health Limited released its full year financial results for the year ended June 30, 2023. Revenues were A$192.8 million (US$125 million), a year-over-year increase of 23%. Net profit after tax was A$2.3 million compared to A$4.6 million in the prior year. (net)
- Kane Biotech announced its second quarter 2023 financial results. Total revenue was C$657,310 (US$486,000), a decrease of 22%. Total revenue in the comparative quarter includes license revenue related to the VOHC certification that STEM received in April, 2022; excluding this revenue recognition, total revenue increased by 61%. Loss for the second quarter of 2023 was (C$967,905) compared to a loss of (C$794,595) for the quarter ended June 30, 2022. (company press release)
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COMPANY NEWS RELEASES
- Private equity firm PAI Partners announced it has agreed to buy pet food manufacturer Alphia Inc from its owner H. Whitney Capital Partners, in a deal valued at about $1 billion, including debt. (reuters)
- AmerisourceBergen Corporation, parent of MWI Animal Health, announced the completion of its name and stock ticker change to Cencora (NYSE: COR). (company press release)
- Feeders Pet Supply announced a partnership with Vetsource designed to provide pharmacy, technology and business services to those who care for pets. The partnership will allow Feeders Pet Supply to offer an expanded range of pet health and wellness products to pet owners, including prescription medications, supplements, preventative medications, and veterinary diets, through its website. (Pet Product News)
- ElleVet Sciences announced the issuance of US Patent No. 11,712,45 which will cover the use of hemp extracts when it comes to treating pain and other conditions in animals. (DVM360)
- MySimplePetLab announced its First Aid Care Dog Kit with Free Virtual Vet Advice is now available in Target stores nationwide. (PRNewswire)
- The United States has filed a civil complaint to enjoin AniCell Biotech LLC from manufacturing and distributing products the government alleges to be adulterated and unapproved new animal drugs. AniCell Biotech manufactures products under the brand names EquusCell and CanisCell consisting of injectable and intravenous liquids, eye drops and grafts derived from the amniotic tissue of horses; their website promotional pamphlets claim that the products are intended for use in horses, dogs and cats to treat various diseases, such as osteoarthritis and renal failure, and to promote tissue regeneration and healing. (FDA)
- Purina announced a partnership with Zigzag, an app in the UK dedicated to puppy training and development, to bring tailored puppy training lessons to busy dog owners across the US. Zigzag puppy training programs are customized for each owner based on each dog’s age, breed and environment. (Pet Business)
- Inspire Veterinary Partners, Inc. announced the pricing of its initial public offering of 1,600,000 shares of common stock at a public offering price of $4.00 per share for aggregate gross proceeds of approximately $6.4 million, prior to deducting underwriting discounts, commissions, and other offering expenses. (Accesswire)
- Veterinary software company TeleVet announced it has re-branded as Otto. It also announced $43 million in new Series B capital led by Mercury Fund and joined by existing investor Boehringer Ingelheim and new investor Hill’s Pet Nutrition. (Techcrunch)
- BetterVet has formally launched its corporate program, BetterVet for Business. The program empowers companies to offer their employees comprehensive pet wellness benefits. (com)
- ScribeAmerica announced its expansion into the veterinary medicine space with dedicated veterinary scribes. ScribeAmerica provides a full portfolio of solutions, including in-person scribes, virtual TeleScribes, and a proprietary Ambient AI service, Speke. (company press release)
- UK Zoetis has acquired 100% of the issued share capital of UK biotech startup PetMedix Ltd, which develops antibody-based therapeutics for companion animals. The purchase price includes upfront cash consideration of approximately $111 million, with contingent consideration up to $100 million based on the achievement of certain milestones. (company financial report)
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ANIMAL HEALTH STOCK PRICE TRACKER
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ANIMAL HEALTH NEWS
- US – COVID A new study finds that COVID-19 is mutating rapidly in white-tailed deer in Ohio and suggests that human-to-deer transmission has taken place. In more than 1,500 deer blood samples collected from free-ranging deer in 2021/22, the researchers found 80 whole-genome sequences in the study representing groups of new viral variants, suggesting that COVID-19 variants are evolving three times faster in white-tailed deer than in humans. The virus also appears to be passing between humans and deer, where genomic analysis showed at least 30 infections in deer were introduced by humans. The study was published in Nature Communications. (AVMA SmartBrief – healthday.com)
- US – MID LEVEL PRACTITIONERS The Coalition for the Veterinary Professional Associate (CVPA) – a nonprofit association with over 32 expert veterinary professionals representing a wide variety of stakeholders in their respective fields nationwide – announced the advancement of the Veterinary Professional Associate (VPA) position. This will be an accredited and licensed new role that will directly address the call related to the existing national veterinary provider shortage in support of rural and companion animal needs with access to care. (EINnews)
- US – VETERINARY SCHOOLS Murray State University’s Board of Regents recently voted in support of a resolution to develop a task force to examine Kentucky’s veterinarian shortage and “work toward the development” of a school of veterinary medicine. (com)
- EUROPE – ASV RESEARCH Scientists at the Friedrich-Loeffler Institute and the Roslin Institute have illuminated a critical gene within pigs that plays a pivotal role in the infection process of the African Swine Fever (ASF) virus, opening up avenues for developing ASF-resistant pigs. The identified gene acts as a key accomplice for the ASF virus to establish infection. The research was published in Scientific Reports. (AVMA SmartBrief – Agweb)
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BRAKKE CONSULTING VIEWPOINT
After attending the successful KCAHC 2023 Animal Health Summit in Kansas City this week, it is clear that innovation in the animal health space is very healthy. What was even more encouraging, was the breadth of the innovation from these start-up companies, spanning pet therapeutics and livestock vaccine technologies, to implantable electronic devices and several technologies monitoring animals for early identification of discomfort or disease.
To me, start-ups are definitely improving their communication. Clearly defining the problem they are solving, clearly explaining how it is achieved and then clearly illustrating the benefits to the pet and the pet parent or the guardian of food producing animals was the norm.
It is also very clear that a great supporting base exists today in the USA, from consultants able to assist with go to market strategies to engineering firms with great experience to solve design issues and manufacture items locally.
Finding funding and the right talent were almost universal for these start-ups. It was encouraging to see a substantial number of private equity and venture capital firms looking for investment opportunities. Moreover, several of the big animal health companies are actively considering early-stage investment in these companies in order to drive innovation.
I look forward to seeing these companies succeed and commercialize their concepts, some which are very close to launch. And thanks to Kimberly Young and Emily McVey for another fantastic Animal Health Summit.
Lourens Havenga
Your View
Last week, we reflected on the intersection of animal health and retail and the financial performance of Petco. We asked you how many new veterinary customers Petco had last quarter and only 10% guessed correctly: 15%. Almost a quarter of the respondents each thought 5% or over 20%, while a third thought it was 10%. Wonder where these new Petco veterinary customers used to buy their vet products.
This week, let’s stay near this intersection. Chewy announced 2Q earnings on Wednesday (see above) and their stock got clobbered Thursday (-12%). The company noted that it is “sensing a shift in consumer mindset towards being more discernible” amid persistent inflation. That’s also made it a challenging period to forecast consumer behavior. Analysts became nervous.
Stock price changes aside, there was an interesting number in their 2Q results…let see how you do this week:
What percentage of Chewy’s 2Q total net sales were from autoship orders?