Animal Health News & Notes for March 2, 2018

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Brakke Consulting’s
Animal Health News & Notes for March 2, 2018
Copyright © Brakke Consulting, Inc.

Editor: Lynn Fondon DVM MBA
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IN THE NEWS:

Brakke Consulting news
Transaction assistance
Industry Overview at WVC – online registration ends today!

earnings news
Apiam Animal Health
Avivagen
Bayer
Blue Buffalo
Dechra Pharmaceuticals
Heska
Kindred Biosciences
Patterson
Zomedica Pharmaceuticals

other news
Adam’s Specialty Products
Aratana Therapeutics
AskAt
Avivagen
Improve International
Kane Biotech
Merck
Nestle Purina
NovaVive
PACC Pets
Perstorp
Tyson Poultry
Vida Nova Solutions
Vision Products Plus

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BRAKKE CONSULTING, INC.
INDUSTRY OVERVIEW AT WVC
TUESDAY, MARCH 6, 2:00 – 4:00 PM
FOUR SEASONS HOTEL
ONLINE REGISTRATION ENDS TODAY!

Brakke Consulting is pleased to announce the 2018 Industry Overview. The 2018 US Animal Health Industry Overview will be presented at the Western Veterinary Conference in Las Vegas, Nevada.

The key topics covered in the 2018 overview include:
• 2017 market summary and performance of the leading companies
• Veterinary clinic metrics and clinic consolidation
• Diagnostic market trends and the future for diagnostics
• Food animal market trends
• Summary information on the recently released Merck Veterinary Wellness Study
• A summary of what the future looks like for 2018 and the next few years.

This presentation is 2 hours of power-packed information backed by data and analysis by the leading consultants in animal health.

To register, go to www.brakkeconsulting.com and scroll down to the “What’s New” box. Online registration closes today at 2:00 pm CST. The price is $400 per person for online registration; late and on-site registration is $450.

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COMPANY EARNINGS RELEASES

• Bayer reported results for the full year 2017. Sales of Animal Health were EUR 1.571 billion ($1,882 million), an increase of 3% (+2% Fx and portfolio adj.). (company website)

• Dechra Pharmaceuticals reported financial results for the half-year ended December 31, 2017. Revenues were GBP 194 million ($262 million), an increase of 12% from the comparable prior-year period. Profit for the period was GBP 26.9 million ($36.3 million) compared to profit of GBP 10.0 million in the comparable prior-year period. Revenues for the North American Pharmaceuticals segment were GBP 73 million ($98 million), an increase of 18%. (company website)

• Heska Corporation reported financial results for its year ended December 31, 2017. Net revenue for the year was $129 million, a decline of 0.6% compared to the prior year. Including a $5.9 million non-cash charge for US Tax Reform, net income attributable to Heska was $10.0 million, a decline of 5%. Core companion animal health net revenue was $105 million, down 2%. (company website)

• Patterson Companies reported results for the third quarter of fiscal 2018. Net sales in the Animal Health segment were $795 million, up 4% from last year’s third quarter. (company website)

• Blue Buffalo Pet Products, Inc. announced its full year 2017 results. Net sales were $1,275 million, up 11%. Net income was $194 million, up 49%. (company website)

• Apiam Animal Health reported results for the first six months of fiscal 2018 ended December 31, 2017. Revenue rose 10% to A$51 million (US$40 million). Net profit after tax was A$1.8 million (US$1.4 million), a slight fall from the $1.9 million recorded for the previous corresponding period. (weeklytimesnow.com.au)

• Avivagen Inc. announced its financial results for the first quarter ending January 31, 2018. The Company reported revenues of C$143,201 (US$114,000) and a comprehensive loss from continuing operations of C$(1,241,588) (US$989,000). (company press release)

• Kindred Biosciences reported results for the full year 2017. Net loss was $(30.9) million, versus a net loss of $(22.5) million for the same period in 2016. As of December 31, 2017, KindredBio had $82.5 million in cash, cash equivalents and investments. KindredBio, which is in the development stage, recorded no revenues in 2017. (company press release)

• Zomedica Pharmaceuticals Corp. reported consolidated financial results for the year ended December 31, 2017. Zomedica recorded net loss and comprehensive loss of $(8.1 million) compared to a loss of $(5.7 million) for the year ended December 31, 2016. Zomedica, which is in the development stage, recorded no revenues in 2017. (GlobeNewsWire)

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COMPANY NEWS RELEASES

• Merck announced the launch of a new website – http://www.vetwellbeing.com – with results of a new mental health and wellbeing study. The Merck Animal Health Veterinary Wellbeing Study was conducted by Brakke Consulting and sponsored by Merck Animal Health. (company press release)

• Aratana Therapeutics, Inc. announced an animal health research and development collaboration with AskAt Inc., including an option agreement for multiple therapeutic candidates with potential in pain, allergy and cancer. AskAt is a life-sciences company based in Nagoya, Japan, discovering and developing novel compounds in human health. (company press release)

• Kane Biotech Inc. announced that it has filed a lawsuit against Nestec, Ltd. and Nestlé Purina Petcare Global Resources, Inc. for breach of agreements between the parties, and misappropriation of Kane Biotech’s trade secrets and intellectual property. Kane Biotech alleges, amongst other improper activities, that a Nestlé patent application makes improper use of Kane Biotech’s patent rights for oral care, personal care and wound care antimicrobial and anti-biofilm technologies that the Kane Biotech developed. (company press release)

• NovaVive Inc. announced that its USDA-approved immunotherapy for calf scours, Amplimune, has received an Organic Materials Review Institute (OMRI) Listing in the US. This means that OMRI is allowing Amplimune to be used in compliance with the USDA National Organic Program. (company press release)

• Avivagen announced a two-year US distribution agreement with PACC Pets to distribute its companion animal products. The non-exclusive deal is the company’s first for its Vivamune Health Chews, which feature Avivagen’s OxC-beta compound. (Animal Pharm)

• Vida Nova Solutions, a premier animal nutrition company offering a broad selection of antibiotic alternative products and customized formulations, was launched this week. Vida Nova’s products are based on propriety enzyme blends, Mannan Oligosaccharides (MOS), beta glucans, and pro and prebiotics. In addition to standalone products, Vida Nova specializes in manufacturing customized formulations. (PRweb)

• Adam’s Specialty Products, LLC announced it has purchased the company assets of Vision Products Plus, Inc. The Vision brands are being added to the CustomCages.com lineup of animal enclosure products. Financial terms were not disclosed. (Pet Age)

• Improve International announced its launch in the US, offering a range of short courses for veterinary professionals seeking to update their knowledge and develop new skills. Improve International was founded in 2008 in the UK by a team of veterinarians and provides veterinary education in 20 countries. (company press release)

• Tyson Poultry Inc. was sentenced in federal court to pay a $2 million criminal fine, serve two years of probation and pay $500,000 to directly remedy harm caused when it violated the Clean Water Act. The charges stemmed from discharges at Tyson’s slaughter and processing facility in Monett, Mo., that led to a major fish kill event. (Feedstuffs)

• SWEDEN Perstorp announced the creation of a specific animal feed additive division to meet the rising demand for alternatives to antibiotics. Last year, Perstorp highlighted a new organic acid to promote broiler performance and reduce the negative impact of gut bacteria Clostridium perfringens in poultry. (Animal Pharm)

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ANIMAL HEALTH NEWS

• NETHERLANDS – AVIAN INFLUENZA The Netherlands confirmed an outbreak of highly pathogenic H5N6 bird flu at a farm in the northern part of the country. The virus was found at a farm of 37,866 birds, killing 230 of them. The remaining birds were all slaughtered. (Reuters)

• US – CANNABIS REGULATION California’s state legislature is considering a proposed bill which would protect state-licensed veterinarians from disciplinary action for discussing the use of cannabis on animal patient clients. It is illegal for veterinarians to prescribe cannabis solutions for pets under current state law. The proposed legislation is sponsored by the California Veterinary Medical Association, but the California Veterinary Medical Board failed to support the bill. (hightimes.com)

• US – LIVER VACCINE PATENT Researchers at Kansas State University’s College of Veterinary Medicine have been issued a new patent that could help cattle producers by providing a non-antibiotic treatment option for beef cattle liver infections uses vaccine-based technology that circumvents antibiotic use when treating cattle and sheep for liver abscesses caused by Fusobacterium. (Feedstuffs)

• CANADA – VETERINARY EDUCATION The Saskatchewan Veterinary Medical Association and the Western College of Veterinary Medicine at the University of Saskatchewan are launching a pilot program to attract and retain veterinarians in rural areas of the province. Five third-year veterinary medicine students will be paid $10,000 over 14 weeks to work in mixed- and large-animal practices in outlying parts of the province. (AVMA SmartBrief – Western Producer Online)

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BRAKKE CONSULTING, INC.
TRANSACTION ASSISTANCE

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Brakke Consulting has been the finder of record, agent of record or consultant for a number of successfully completed projects. We assist with valuations and provide due diligence on confidential transactions as well as offering executive counsel on a number of potential transactions.

Brakke Consulting has the experience, insight, ability and contacts to provide clients with the highest quality services in the animal health, pet, veterinary and specialty chemicals markets. Please contact any of our offices for a confidential consultation.

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BRAKKE CONSULTING VIEWPOINT

The results reported this week continue to fit a fairly consistent pattern. The early-stage startup companies are struggling to move products through the regulatory process, which results in significant costs and losses. The medium-sized companies that have been aggressive in the acquisition area show double-digit growth from integration, but must continue to find additional targets to maintain these growth numbers. Once the critical mass or geographical expansion is assembled it becomes more challenging to maintain revenue growth. The larger companies with limited new product additions have difficulty keeping up with their peers who have posted high single and double digit growth.

Animal health revenue growth has always needed new technologies and innovation in order to maintain growth of 4 to 5% over time. We discuss in detail our perspectives on these and other industry observations at our Industry Overview in Las Vegas during WVC next Tuesday. See our website for more details and registration for the Animal Health Industry Overview.

See you in Las Vegas next week!

Ron Brakke

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