Animal Health News & Notes for July 3, 2002

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Brakke Consulting’s
Animal Health News & Notes for July 3, 2002
Copyright © Brakke Consulting, Inc.
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Company Earnings Releases

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Company News Releases

>  Schering-Plough has temporarily suspended production of Banamine, Nuflor and Optimmune at its manufacturing plant in Puerto Rico in order to implement GMP programs dictated by a settlement of Schering’s dispute with the FDA over manufacturing standards and quality control measures.  Schering is pursuing alternate sources of Nuflor, and perhaps the other product, to satisfy the US demand for the product.  Aggregate sales of the products manufactured in Puerto Rico were around $50 million. (Animal Pharm)

> Novartis has launched Atopica, a new canine atopic dermatitis product, in Australia and New Zealand.  Atopica contains the active ingredient cyclosporine A and is available in a gel capsule formulation.  The product has also been approved by the Swiss regulatory authority and Atopica should be available in Switzerland in the near future. (Animal Pharm)

>   A federal judge in Tampa, Fla., has dismissed an environmental class-action lawsuit against Smithfield Foods Inc. filed by a coalition of plaintiffs’ lawyers led by Robert F. Kennedy, Jr.  Last year in a series of news conferences, Kennedy trumpeted his intention to use this and other lawsuits as a means of “shutting down Smithfield’s farm operations.”  In dismissing the lawsuit, which sought damages in the hundreds of millions of dollars, the U.S. District Court Judge took the unusual step of ordering that the plaintiffs’ attorneys pay attorneys fees and costs. The judge ordered the parties to come up with an appropriate sanction. Smithfield Foods and its attorneys are considering what sanctions to request. (Meating Place)

>   The European Commission fined Degussa AG and Nippon Soda Company Ltd respectively € 118 million and € 9 million for participating in a price-fixing cartel in methionine together with Aventis SA. Aventis was granted full immunity from fines because it revealed the cartel’s existence to the Commission and provided decisive evidence on its operation. Methionine is one of the world’s most important amino acids used mainly in animal feed for poultry and pigs. The cartel operated for nearly thirteen years until 1999. (FeedInfo)

>  George A Jeffreys has been acquired by Novozymes.  Jeffreys is active in the research, sale and production of naturally occurring microorganisms and enzymes for animal feed.  Jeffreys will be absorbed into Novozymes’ biologicals division. Financial terms were not disclosed. (Animal Pharm)

>  Big River Zinc Co., a wholly owned subsidiary of Korea Zinc, announced that Prince Agri Products will be their exclusive distributor for zinc sulfate products used in animal feed.  Korea Zinc is the world’s largest producer of zinc products. (Watt Feed Enews)

>  AUSTRALIA   Peptide Technology Ltd. has developed a contraceptive implant for male dogs that also calms them down. The company has applied to Australia’s National Registration Authority this week to register its canine contraceptive, which operates through a single hormone implant under the skin between a dog’s shoulder blades.  Trials are underway to develop a similar product for cats and female dogs. (AnimalNet – Reuters)

>  CANADA   Sentex Systems Ltd. announced the completion of the acquisition of Natunola Health Inc. pursuant to the Letter of Intent announced on April 5th 2002. The transaction has now received formal approval from the shareholders of both companies as well as the TSX Venture Exchange. Natunola Health will continue its operations under the direction of its founder, President and CEO, Dr. Nam Fong Han, as a distinct operating division of NutriBios Corp., a wholly owned subsidiary of Sentex. Natunola Health has developed processes for high-margin, high volume applications in the functional food, nutraceutical and value-added feed industries. (company press release)

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BRAKKE CONSULTING, INC.
EXECUTIVE SEARCH AND RECRUITING SERVICES

We continue to expand our executive search business within the animal health, veterinary, pet and specialty chemical markets.  In the past few years, we have filled over 100 positions from division CEO’s to product managers for the leading companies in our industry.  We believe that our services in executive search are of the highest quality.

In 2001, we added field sales recruiting to our search and recruiting services.  We now have two consultants working full time in this area of our business. 

If our your firm has never used Brakke Consulting’s executive search services, we encourage you to either visit out website at www.BrakkeConsulting.com or call any of our offices to learn more about how we are uniquely qualified to help you find the best possible candidate for your position.

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Animal Health News

> UK   British veterinary authorities reported that they fear they have spotted the first signs Aujeszky’s disease, or pseudorabies, at a slaughterhouse in Essex, the abattoir where the first cases of foot-and-mouth disease were discovered last year. Aujeszky’s disease mostly strikes
pigs with respiratory and reproductive problems, and can also infect cattle, sheep, cats, dogs and rats.  The six possible cases in pigs were discovered during a routine check, but the ministries said they would conduct more tests to exclude the possibility of test error. The disease was first discovered in Britain in 1979 and the most recent case was recorded 10 years later. The country was declared officially clear of the disease in 1991. (AnimalNet – Agence France Presse/AP)

>  UK   The UK’s Environment Minister stated that vaccination would be used to help control a future outbreak of foot-and-mouth.  Farmers led opposition to the use of vaccinations in last year’s devastating outbreak, which was finally halted by the Government’s slaughter policy.  But changes on world trade rules, which had prevented the export of meat and livestock for a year after a vaccine is used, meant vaccination is now becoming a viable option.  (AnimalNet – PA News)

>  RUSSIA   Russia, a major U.S. poultry buyer, is imposing a protective duty on chicken imports amid an investigation into losses suffered by Russian poultry producers because of foreign competition, according to the economics and trade minister.  The size of the tariff will be determined at a meeting of the Russian government commission on protective trade measures in four weeks. Before the ban, Russia relied heavily on U.S. chicken imports. Poultry is the biggest U.S. export to Russia, bringing $600 million to $700 million a year to producers in 38 U.S. states. (AP)
 
>  GERMANY   German lawmakers in the Bundestag, the country’s lower legislative body, voted to add the phrase “and animals” to a clause in its constitution that obligates the state to respect and protect the dignity of humans, according to news reports.  The main impact of the measure, which still requires approval this summer in the Bundesrat, the upper house of parliament, would mainly restrict the use of animals in medical and scientific experiments.  Germany is the first European nation to guarantee animal rights. With the new measure, the federal constitutional court would have to weigh animals’ rights against other rights, such as the right to conduct research or practice religion. (Meating Place)

>  US   Cattle ranchers from three states have sued the nation’s four largest meatpackers accusing them of insider trading.  The suit alleges the packers didn’t correct a Department of Agriculture mistake on the reported price of boxed beef during the spring of 2001.  The mistake allowed the meatpackers – Excel Corp., ConAgra Beef Co., Farmland National Beef Packing Co. and IBP – to reduce the prices they paid ranchers for cattle over a 29-day period, according to the lawsuit. A lawyer for the plaintiffs estimates meatpackers made an extra $40 million because of the incorrect numbers. (AP)

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Brakke Consulting Viewpoint

I’m reminded on the eve of our country’s celebration of our founding in 1776, that business leaders have an important role to play in the stability and economic future of our country.  The news about Enron, WorldCom, Xerox and others the past few weeks has had a great deal to do with the current stock market woes.  While it is easy for the rest of us to say, “Just a few bad apples have caused this problem,” we believe that before all the dust settles,  even more companies will be restating earnings.  What appears to be cute or clever accounting or business practices will be the undoing of many executives and their companies.

Will the practice of loading customers with excess inventory to inflate sales numbers for the quarter continue to be viewed by auditors as an acceptable business practice?  Give it some thought over the holiday weekend.  It may be time for an in-depth study of industry product usage compared to the inventory level in the marketplace.  Our consultants would be pleased to discuss our opinion with you.

Have a safe and enjoyable Fourth of July.

[Ron Brakke]

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