Animal Health News & Notes for March 8, 2002

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Brakke Consulting’s
Animal Health News & Notes for March 8, 2002
Copyright © Brakke Consulting, Inc.

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Company Earnings Releases
 
>  Alpharma announced that its Animal Health Division reported revenues for the year 2001 were $335 million, an increase of 11% over the year 2000.  Adjusted operating income was $33.4 million, a decrease of 32% over the previous year.  For the quarter ended December 31, 2001, revenues were $66 million, a decrease of 27% over the prior year comparable period.  The Division reported an adjusted operating loss in the fourth quarter of ($12.0) million, compared to a quarterly operating income of $13.9 million in 2000.  Adjustments for the company as a whole were made for non-operational items including the acquisition of FH Faulding’s generics business, costs related to deleveraging activities, and reorganization and refocusing activities.  Revenue and operating income in the fourth quarter declined primarily due to the Division’s decision to reduce special incentives beginning in that quarter; revenue in the Division for the full year was positively impacted by the inclusion of Roche’s medicinal feed additives business for the full year of 2001. (company press release)

>  Royal Canin reported sales of 488 million Euros ($420 million) for the year 2001, an increase of 14.8% on 2000. The company’s sales have increased by an average of almost 11% per annum since 1994.  “Nutritional products” sales rose by 27% last year to reach 305 million Euros ($270 million). The professional veterinary product lines reported a 77.3% increase in sales in 2001. This is reportedly due to the April launch of the V-Diet ranges for cats and dogs; sales of the veterinary ranges more than doubled over the last nine months of the year.  (Petfood Industry E-news)

>  Dutch based agribusiness Nutreco has achieved a net income for the last year of Euro 91.6 million ($81 million), a rise of just 0.8% on 2000. This was in line with the company’s profit forecast in November. The income from the Agriculture business sector rose by 129% to Euro 98.7 million ($87 million). Most of this growth was internal but acquisitions also played a part. The company said there was a rise in demand for poultry products although acquisitions in the pork, poultry and premix feed businesses also played a part. The group’s net sales rose from Euro 3.125 billion ($2.77 billion) in 2000 to Euro 3.835 billion ($3.40 billion) last year. (Wattnet Meatnews)

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Company News Releases

>  MetaMorphix, Inc and Celera Genomics announced the closing of the sale of Celera’s AgGen animal genomics and genotyping business to MetaMorphix.  In addition, MetaMorphix has received a subscription to the Celera Discovery System.  MetaMorphix intends to commercialize new products derived from Celera’s livestock genomic databases.  In consideration, Celera has acquired a minority interest in MetaMorphix and is entitled to share future revenue generated from products developed by MetaMorphix based on Celera’s livestock databases.  Other details of the agreements were not disclosed. (company press release)

>  Highland VetPharma announced the issuance of a patent for ConSeal, an oral drug delivery system.  ConSeal masks drug-related tastes and odors while suspending active ingredients in a soft, flavoured and highly palatable chewable.  The chewable is easily cut to allow for accurate dosing.  (company press release)

>  Vetstream, Inc., announced the U.S. release of Vetstream Canis, a comprehensive peer-reviewed canine clinical information source.  The service contains over 6,000 regularly updated components and includes diagnostic help, treatment selection, surgery techniques, aftercare information, drug dose rates, new product information and client information fact sheets.  The information is arranged similar to a textbook, but offers a much wider range of functions and tools, such as cross-linking related content and images, plus highlighting key points.  The Felis service, which covers feline clinical information, is expected to be released in the second quarter.  Vetstream introduced its Equis CD-ROM service in 2000.  (company press release)

>  Bion Environmental Technologies, Inc. announced that it has signed a Letter of Intent with Fair Oaks Dairy, located in Fair Oaks, Indiana.  The agreement calls for Bion to install, own and operate its newly developed, second generation Bion NMS (Nutrient Management System) for a term of twenty years. The system will be built and operated to provide waste treatment for a 3500-head dairy facility. Fair Oaks will pay Bion an annual, per dairy cow, fee that includes a technology license and O & M fee. The Fair Oaks installation will be the first Bion NMS to incorporate methane digestion to produce energy into Bion’s NMS Technology Platform. This energy is produced in the form of methane gas, which can either be combusted, to produce heat energy, or converted into electricity, or both. (Business Wire)

>  The Bureau of Land Management withdrew its approval for a clay mine proposed by Oil Dri, a manufacturer of cat litter, but said the company could submit a revised plan.  The mine, planned for federal land north of Reno, is no longer feasible after Washoe County rejected a permit this week for an accompanying processing plant on neighboring private land.  (AP)
>   Roche Holding AG intends to dispose of its vitamin business and produce only drugs and diagnostics in the future.  For reasons of competition legislation, only chemical groups that do not manufacture vitamins would be suitable as buyers, because Roche is number one in the world in this business. No deadline was given for the disposal. Roche makes 12% of group turnover from vitamins and fine chemicals, but the business has the poorest profitability in the group, because prices have come under strong pressure as a result of competition from Chinese suppliers. (Chemical Newsflash)

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BRAKKE CONSULTING, INC. announces
Due Diligence Seminar in Dallas
Tuesday & Wednesday April 23 & 24th

Registration, Agenda, Information online at
www.brakkeconsulting.com

Registration is $1,100 if registered on or before April 1, and $1,250 if registered after April 1. Registration is limited.

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Animal Health News

>  UK   Tests on suspected foot-and-mouth at a North Yorkshire, U.K. farm proved negative and a ban on livestock movements within a five mile radius will be lifted.  The scare was caused at a farm in Hawnby, North Yorkshire, when two sheep were found to have lacerations in their mouths. Initial tests had indicated that the cause was not the foot-and-mouth virus. (AnimalNet – PA News/Reuters)

>  HONG KONG   The latest outbreak of avian flu in Hong Kong has struck a second chicken farm outside the quarantine area, forcing officials to slaughter 7,000 birds and bringing the total killed to around 900,000.  Tests on the farm over the weekend confirmed new traces of the H5 virus, but there is still no sign of the virus strain that crossed over into humans and killed six people in 1997. Last May, a similar avian virus infected thousands of chickens, forcing the government to cull 1.37 million birds. (Meating Place)

>  US   U.S. Rep. Sherrod Brown, D-Ohio, has introduced a bill to phase out within two years eight classes of drugs now used to promote growth and prevent infection in food-producing animals.  Penicillin, tetracycline, macrolide and other similar drugs could continue to be used for treatment, provided that the FDA can prove that their use does not contribute to resistant strains of bacteria.  All fluoroquinolone use would be banned.  (Pork Alert)

>  RUSSIA   Russia stopped issuing import licenses for U.S. poultry and the Agriculture Ministry said it would introduce a temporary ban on poultry imports as of March 10.  The move appeared to be an attempt to increase pressure on American producers to divulge what antibiotics, preservatives and other substances are used in the industry. The announcement followed a full ban imposed on U.S. poultry imports by neighboring Ukraine, which said use of artificial ingredients in poultry production was illegal. U.S. producers send Russia about 900,000 to 1 million tons of poultry, mostly chicken and turkey, worth $600 million to $800 million a year, according to the USA Poultry and Egg Export Council. (AP)

>  CANADA   Livestock producers may soon be able to give their animals broad-spectrum protection against bacterial infections thanks to research at the Veterinary Infectious Disease Organization in Saskatoon (VIDO).  Using a mixture of synthetic bacterial DNA, scientists elicited a broad immune system response. The approach capitalizes on structural differences between mammalian and bacterial DNA to prime the body’s defenses.  In a few years, the broad-spectrum immunostimulant could offer a new way to manage disease. The researchers are working out optimum dosages for the immunostimulant, which will initially be delivered by injection. (AnimalNet –  AgBiotech Bulletin)

>  US   Animal lovers who want to tell the world how much they miss their loyal Labrador or precious Persian can now take out an ad memorializing their dearly departed pets. For $52.08, pet owners may say their final farewells – complete with a picture and a few lines of text – in the Philadelphia Daily News, starting Tuesday. The notices will appear once a month under the heading “A Fond Farewell to our Beloved Pet,’’ but will appear more frequently if demand calls for it.  (AP)

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Brakke Consulting Viewpoint

I’m currently reading Thomas L. Friedman’s book “The Lexus and the Olive Tree” on understanding globalization.  It was published in 1999 with a revised edition in 2000.  It is an excellent book that should be required reading for those who need to understand the impacts of globalizations on all of us.

I was most impressed with chapter 11, “Buy Taiwan, Hold Italy, and Sell France.”  In that chapter he provides his checklist for the Nine Habits of Highly Effective Countries or Companies. 

We would encourage each of you to read this book of you’ve not already done so.  Brakke Consulting will be measuring ourselves against this checklist and we recommend that you do the same for your company.  It never hurts to benchmark against some new concepts, as long as they are sensible.

Have a good weekend.

[Ron Brakke]

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