Animal Health News & Notes for September 6, 2002

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Brakke Consulting’s
Animal Health News & Notes for September 6, 2002
Copyright © Brakke Consulting, Inc.
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COMPANY EARNINGS RELEASES

>  Evialis announced turnover of 383 million euros ($372 million) for the first half of 2002, an increase of 3.8% over the first half of 2001.  The company attributed its progress to the development of value-added activities and international business.  (Animal Pharm)

>  Royal Canin reported that sales for the first half of 2002 were 272 million euros ($267 million), an increase of 12.4% over the first half of 2001.  Nutritional product sales have increased by 17.6% to 176 million euros ($179 million).  Sales for nutritional products for cats grew 25.6% during the period.  (Animal Pharm)

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COMPANY NEWS RELEASES

>  Roche and the Dutch Life Science and Performance
Materials Company (DSM) announced that DSM intends to acquire Roche’s Vitamins and Fine Chemicals Division. The two companies have reached basic agreement on price and payment terms. The total consideration of the transaction is  2.25 billion euros ($2.23 billion). The present and future liabilities from the vitamin price fixing case will remain with Roche. (Feedinfo)

>  Virbac announced that it expects to enter the prescription allergic dermatitis market by year-end 2002 through an in-licensing agreement it recently signed with RMS Laboratories, Inc. to market GENESIS Topical Spray, an ultra-low concentration (0.015 % triamcinolone) topical steroid spray.   Under the terms of this agreement, Virbac has secured worldwide rights to GENESIS.  Virbac estimates that GENESIS will annually contribute approximately $6 million in once the product has been fully launched. (Business Wire)

>  LeForce Signature Beef signed a letter of intent to purchase and reopen bankrupt Future Beef’s packing plant in Arkansas City, Kan. The terms of the deal are still being worked out and must be approved by the U.S. Bankruptcy Court in Denver. Chief executives of LeForce did not disclose financial terms since a definitive agreement was still being negotiated. (Drovers Alert)

>  Heinz Pet Products announced that its new Snausages Scooby Snacks are experiencing record sales.  According to Nielsen data, Snausages Scooby Snacks have achieved a top ten status within the biscuit category just a few months after hitting the shelves. Nielsen data also indicates that Snausages Scooby Snacks already achieved a 7.3% share of the dog biscuit segment in the last week, even before attaining complete distribution. (Business Wire)

>  AVANT Immunotherapeutics, Inc. announced that it has appointed Lohmann Animal Health International (LAHI) as the exclusive distributor of its Megan Health poultry vaccines in North America. Financial terms of the distribution agreement with LAHI were not disclosed. (Business Wire)

>  Innovative Veterinary Diets (IVD) introduced Select Care Vegetarian Formula dog food, a totally meat-free vegetarian diet option for managing adverse reactions to food.  The new diet avoids the seven most common food allergens and provides an all-natural vegetarian solution and provides a comparable caloric density range as diets than contain meat. Formulated to meet the nutritional requirements established by the Association of American Feed Control Officials (AAFCO), Select Care Vegetarian Formula is well suited for long-term feeding of adult dogs. (company press release)

>  Farnam Horse Health products introduced Red Flex, a new supplement for horses that combines the power of iron-rich Red Cell with glucosamine HCl and chondroitin sulfate. It comes in half-gallon and gallon-sized bottles, and can be found at tack and feed stores. (company press release)

> JAPAN   Dainippon Pharmaceuticals announced that it will acquire Tanabe Seiyaku’s animal health business on November 1, 2002.  Tanabe’s animal health division recorded sales of ¥ 2.64 billion ($22 million) for the year ending March 31, 2002.  (Animal Pharm)

CORRECTION:  In last week’s list of mergers and acquisitions, it was reported that Del Monte had agreed to sell its pet food division to H.J. Heinz.  The comment should have read that Del Monte agreed to acquire the pet food division of H.J. Heinz.

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BRAKKE CONSULTING, INC.
Perception is Reality to Clients and Customers

Brakke Consulting has helped several companies evaluate and improve their marketing communications programs.  Senior Consultant John Volk has more than 25 years of experience in animal health advertising and public relations, and pioneered direct-to-consumer advertising for companion animal products.  If you are interested in improving the return on your A&P investment, contact John Volk in the Chicago office of Brakke Consulting, (773) 327-4941, email: jvolk@brakkeocnsulting.com. Learn more about how Brakke Consulting, Inc. assists client companies at www.brakkeconsulting.com.

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ANIMAL HEALTH NEWS

>  UK   Spinal cord has been found in frozen beef imported from France and Germany into the UK.. The spinal cord was discovered in three quarter-carcasses of frozen French beef and one quarter-carcass of frozen German beef.  This is the first French SRM breach. (Wattnet Meatnews)

>  US   Animal health officials confirmed Minnesota’s first case of chronic wasting disease, marking the spread of the incurable illness into a 10th state. The state Board of Animal Health said a farm-raised elk tested positive after dying mysteriously. The rest of the herd has been quarantined. (AnimalNet – AP)

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AGRIBUSINESS NEWS

>  According to the US Secretary of Agriculture, groups opposed to biotech foods in the United States are influencing starving countries in southern Africa, leading them to refuse American aid at the risk of letting millions of people die. Ann Veneman called the organizations irresponsible and accused them of creating a food scare in the midst of a hunger crisis. Nearly 13 million people are facing famine in Lesotho, Malawi, Mozambique, Swaziland, Zambia and Zimbabwe because of drought and government mismanagement, according to the United Nations. Zambia has rejected the US’s offer of food, although 2.5 million of its citizens may starve. (AP)

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BRAKKE CONSULTING VIEWPOINT

It seemed to be a light week for news. Obviously, with Labor Day on Monday in the US a number of managers decided to take off the balance of the week.  The pet food companies dominated the news. A number of these stories reflect growth rates that are most impressive.  We continue to encourage client companies to consider super premium pet nutrition as an important growth area in animal health.  Those companies already participating in this segment are very important to the industry.

We would hope our clients will be aggressive related to 2003 budgeting for sales and operating profits.  While there are some indications that 2003 maybe a soft year, we would hope that you’ll approve programs in 2003 that benefit the industry sales growth. Has your firm budgeted promotion dollars for 2003 to help expand the market for products at the consumer and producer level? Or is your budget defensive and protective of your operating income?

Finally, be sure to include in your 2003 budgets funds for consulting firms that specialize in the animal health, veterinary, pet, nutritional and specialty chemical markets.  We’ll be most appreciative.

Have a great weekend. Fall is just around the corner as is the end of the third quarter of the year.

[Ron Brakke]

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