Animal Health News & Notes for May 4, 2018

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Brakke Consulting’s
Animal Health News & Notes for May 4, 2018
Copyright © Brakke Consulting, Inc.

Editor: Lynn Fondon DVM MBA
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IN THE NEWS:

Brakke Consulting news
Animal Health Industry Overview webinar
OTC Channel

earnings news
Aratana Therapeutics
Bayer
IDEXX
Merck
Parnell
Spectrum Brands Holdings
Trupanion
Zoetis

other news
Boss Pet Products
DermaZoo
Eruvaka
Future Meat Technologies
La Coop fédérée
MottoGyutto Small Amount & Short Term Insurance
Naturawls Pet Products
Nestlé (Chile pet food factory)
Nestlé (Wamiz)
Nutreco
Pathway Vet Alliance
PetEdge
Rakuten
Scout Bio
Standard Nutrition Canada
Tractor Supply Company
Tyson Ventures
Wamiz

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ANIMAL HEALTH INDUSTRY: REVOLUTION OR EVOLUTION?
BRAKKE CONSULTING SPECIAL 2-HOUR WEBINAR
MAY 22, 2018
10:00 am – 12:00 pm CDT
REGISTER NOW

The largest distributor just sold off its animal health business. One of the largest pharmaceutical companies suffered a 24% drop in its US food animal business in 2017. Corporate consolidators now own nearly half of all specialty-referral veterinary practices. Are these trends . . . or radical changes in direction for the industry? How do they impact your company? Your job?

Learn about all the factors affecting the global animal health and nutrition industry in a special two-hour webinar on May 22. Brakke experts Dr. Bob Jones and John Volk will present an up-to-the-minute edition of Brakke’s Annual Industry Overview. In addition to the presentation, you’ll have an opportunity to interact with seminar participants and ask questions. Plus you’ll receive a copy of the complete presentation.

The Overview provides the most current perspective available on the industry in the US and around the world. Register today: go to www.brakkeconsulting.com and scroll to the “What’s New Box. Registration is $395.

www.BrakkeConsulting.com

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COMPANY EARNINGS RELEASES

• Zoetis Inc. reported its financial results for the first quarter of 2018. The company reported revenue of $1.37 billion, an increase of 11% compared with the first quarter of 2017. Net income was $352 million, an increase of 48% on a reported basis. Revenue in the US segment was $634 million, an increase of 5%. (company press release)

• Merck announced results for the first quarter of 2018. Animal Health sales were $1.07 billion, an increase of 13% compared to the comparable prior-year quarter. International sales were $758 million (+16%), while US sales were $307 million (+9%). (company press release)

• Bayer reported results for the first quarter of 2018. Animal Health sales were EUR 414 million ($510 million), a decline of 6% (+3% currency and portfolio adjusted). (company website)

• IDEXX Laboratories, Inc. reported results for the first quarter of 2018. Revenues were $538 million, an increase of 16% compared to the prior year. Companion Animal Group revenue was $471 million, an increase of 17%. Net income was $89 million, an increase of 30% compared to the prior year. (company press release)

• Spectrum Brands Holdings, Inc. reported results for the second quarter of fiscal 2018 ended April 1, 2018. Pet business sales were $211 million for the quarter, an increase of 10% over the comparable prior-year period. (company website)

• Parnell Pharmaceuticals Holdings Ltd announced results for the full year 2017 and the quarter ended March 31, 2018. Total revenue for the year 2017 was A$19.1 million (US$14.7 million), flat with the same period in 2016. Revenue for the quarter ended March 31, 2018 was A$5.2 million (US$4.0 million), an increase of 107% over the same period in 2017. (company website)

• Aratana Therapeutics, Inc. announced its first quarter 2018 financial results. Total net revenues were $4.0 million compared to $3.8 million in net revenues in the first quarter of 2017. The net loss for the quarter was $(8.5) million compared to a net loss of $(12.6) million for the corresponding quarter in 2017. (company press release)

• Trupanion, Inc. announced financial results for the first quarter ended March 31, 2018. Total revenue was $69.8 million, an increase of 27% compared to the first quarter of 2017. Net loss was $(1.5) million, flat with the first quarter of 2017. (company website)

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COMPANY NEWS RELEASES

• DermaZoo announced the launch of TrisDent Treats for dogs, the first dental treats to utilize Tris-EDTA (Tromethamine and Edta) to support the health of teeth and gums and improve breath. (company news)

• The Tractor Supply Company announced it is expanding Petsense, its rural and small market pet supplies operation, into the Florida market, with two new stores in Gulf Breeze and Crestview. The retailer now operates 172 Petsense stores across 27 states. (GlobalPets)

• Boss Pet Products, Inc., announced it has acquired the assets of PetEdge, Inc., a supplier of wholesale pet grooming supplies and discount pet products. Financial terms were not disclosed. (PetProductNews)

• Frazier Healthcare Partners announced it has led a $9.29 million investment in Scout Bio, a University of Pennsylvania spinout that is developing gene therapies for companion animals. (philly.com, Animal Pharm)

• Pathway Vet Alliance announced new partnerships with 14 veterinary hospitals across the US, including three in Colorado, two in Arkansas, two in New Mexico, and one each in Arizona, California, and Washington. Pathway has more than 125 locations throughout the US. (Veterinary Practice News)

• Future Meat Technologies, a biotechnology company focused on the production of meat directly from animal cells, announced a $2.2 million seed investment round co-led by Tyson Ventures, the venture capital arm of Tyson Foods. Future Meat Technologies focuses on developing a new generation of manufacturing technology that enables the cost-efficient production of fat and muscle cells, the core building blocks of meat. (Feedstuffs)

• FRANCE Nestlé announced it has agreed to acquire a majority stake in Wamiz, the French digital media platform for pet owners. The Wamiz founders and their team will continue to manage the business. Financial terms were not disclosed. (PetFoodIndustry.com)

• CHILE Nestlé announced it has invested US$120 million (CHF 117 million) in a pet food factory in Teno, Chile. The factory will produce pet food for dogs and cats, meeting growing demand from pet owners in Chile. According to Nestlé, the plant will produce 65,000 tons of pet food for local consumption and export markets in Latin America. (PetFoodIndustry.com)

• CANADA Dane Creek Capital Corp. announced the acquisition of Naturawls Pet Products, a manufacturer of raw pet food and dehydrated pet treats for dogs and cats in Canada. The purchase price represents 0.9 times trailing 2017 revenue; under the terms of the deal, DCCC will pay a portion in cash and the remainder in equity from its subsidiary United Raw Pet Food Inc. The transaction marks DCCC’s third acquisition of a Canadian raw pet food manufacturer in less than a year. (GlobalPets)

• CANADA La Coop fédérée announced that it has finalized the acquisition of Standard Nutrition Canada (SNC), a Winnipeg-based company offering animal nutrition products and services. US-based Standard Nutrition assets and activities are excluded from the transaction. Financial terms were not disclosed. (Watt Agnet)

• INDIA Nutreco announced it has acquired a 25% stake in Indian data intelligence company Eruvaka, which develops mobile-based decision tools to help aquaculture farmers reduce risk and increase productivity. Financial terms were not disclosed. (Animal Pharm)

• JAPAN Rakuten, Japan’s largest internet services company, announced it has acquired pet insurance company MottoGyutto Small Amount & Short Term Insurance (MottoGyutto) for an undisclosed fee. Rakuten has made MottoGyutto a wholly-owned subsidiary called Rakuten Small Amount & Short Term Insurance. MottoGyutto reported annual turnover of ¥2 billion ($18.3 million) for fiscal 2016. (Animal Pharm)

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ANIMAL HEALTH NEWS

• US – VACCINE REGULATION USDA’s Animal and Plant Health Inspection Service (APHIS) has issued updates to its regulations to clarify points about how expiration dates on veterinary biologics should be calculated and confirmed. The update can be read at https://www.federalregister.gov/documents/2018/03/14/2018-05143/viruses-serums-toxins-and-analogous-products-expiration-date-required-for-serial-and-subserials-and. (bovinevetonline.com)

• US – FOOD LABELING The USDA has published a proposed final rule to establish the National Bioengineered Food Disclosure Standard (NBFDS) mandated by Congress in 2016. After receiving public input on 30 questions in 2017, the rule asks for additional guidance as the agency looks to finalize the rule by the congressionally mandated deadline of July 29, 2018. Comments may be submitted online through the Federal eRulemaking portal at www.regulations.gov. Comments may also be filed with the Docket Clerk, 1400 Independence Ave. SW, Room 4543-South, Washington, DC 20250; or FAX: (202) 690-0338. The deadline for comments is July 3, 2018. (Feedstuffs)

• US – EQUINE FLU VACCINE University of Rochester researchers have developed a new intranasal live equine influenza vaccine that is safe and more protective than existing vaccines. The vaccine was created using a genetic engineering technique called reserve genetics. The study was small, involving only six horses, but a larger study is being planned. (Feedstuffs)

• US – CWD The prion that causes chronic wasting disease in deer and other cervids may not be capable of causing similar effects in humans and nonhuman primates, according to the results of a long-term study published in the Journal of Virology. Macaques exposed to the prion more than a decade ago through either consumption of infected meat or surgical introduction into the brain showed no evidence of infection either clinically or using highly sensitive assays. (AVMA Smartbrief – Gizmodo)

• WORLD – MOSQUITO CONTROL The International Atomic Energy Agency (IAEA) in partnership with the FAO and the Swiss-American non-profit group WeRobotics have successfully tested releasing sterile mosquitos from drones in Brazil to suppress insects that spread a number of livestock and human diseases. Initial tests showed less than 10% mosquito mortality through the entire chilling, transport and aerial release process. Until now, sterile mosquitos have been released using time-consuming and labor-intensive ground methods. (Animal Pharm)

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BRAKKE CONSULTING, INC.
UNDERSTANDING THE OVER-THE-COUNTER MARKET

Whether your business is considering the OTC channels for new business opportunities or you have been distributing in the OTC channels for years, Brakke Consulting’s team can provide significant and quality assistance to businesses seeking to learn more about the details of the OTC channels of distribution. If you are looking for meaningful insights into the OTC channels, the trends found there, and the opportunities that exist, contact our Dallas office or Joel Adamson at adamson.joel@cox.net.

www.BrakkeConsulting.com

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BRAKKE CONSULTING VIEWPOINT

Our newsletter often carries stories of new technologies. The difference this week is that two of those technologies have received investment backing, which is sometimes hard to come by. As with all things scientific or health-related, progress is slow, but there are some beams of light. Another unsurprising trend is that growth at the largest companies depends on markets outside the US, as demonstrated by results at Zoetis and Merck, and the substantial investment by Nestle in a plant in Chile. A bit more surprising is the growth of a pet store chain targeted at rural markets. I was told long ago that there is a limit to the number markets that can support big box stores. Just a reminder that the OTC market is at least as dynamic as the veterinary market. Finally, see how all these trends interact and what opportunities they offer by attending our upcoming webinar.

Have a good weekend.

John Mannhaupt
Dallas

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