Animal Health News & Notes for August 6, 2021

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Brakke Consulting’s
Animal Health News & Notes for August 6, 2021
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
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IN THE NEWS:

Brakke Consulting News
John Volk speaking at WVC

Earnings News
Boehringer Ingelheim
Central Garden & Pet
Covetrus
Evonik
Freshpet
Heska
Hill’s Pet Nutrition
IDEXX
PetIQ
Royal DSM
Swedencare
Trupanion
Zoetis

Other News
Allflex
ALR Technologies SG Pte. Ltd.
Animal Dermatology Group
Better Choice Company
CanBiocin
CommuniVET
Dechra
Duck & Partners
Edra Publishing
Elanco
Fi
Healy Group
Hill’s
Jurox
Klarna
Legault Group
Merck (Whisper)
Merck (vaccine rebranding)
Merck (Diabetes Alliance)
Mispol
Mixlab
NXMH
Partner in Pet Food
Petco
Pet Supplies Plus
Purina
Ren’s Pets
Sunshine Mills
Sylvester.ai
VetDC
Whitebridge Pet Brands
Zoetis (Jurox)
Zoetis (Diabetes Alliance)

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Brakke Consultant Featured in Preventive Care Seminars at WVC
Sponsored by MWI and Premier Vet Alliance
September 7 & 8, 2021

Brakke Senior Consultant John Volk will be the featured speaker at a series of seminars about preventive care plans to be conducted during Western Veterinary Conference September 7-8.  The seminars are hosted by MWI Animal Health and Premier Vet Alliance.  An expert in preventive care plans – also called wellness plans – John has written and lectured widely on the topic.  For more information, or to register for the seminars, contact Zack Melton, zmelton@MWIanimalhealth.com, or Craig Fraser, cf@premiervetalliance.com.

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COMPANY EARNINGS RELEASES

• Zoetis reported its financial results for the second quarter of 2021. Revenue was $1.948 billion, an increase of 26% compared with the second quarter of 2020. On an operational basis, revenue increased 22%, excluding the impact of foreign currency. Net income was $512 million, an increase of 36% on a reported basis. Revenue in the US segment was $1.0 billion, an increase of 22%. (company press release)
• Boehringer Ingelheim reported results for the first half of 2021. Animal Health net sales were around EUR 2.3 billion ($2.7 billion). Adjusted for currency effects, year-on-year sales were up 9.6%. (company press release)
• IDEXX reported results for second quarter 2021. Revenues were $826 million, an increase of 30% as reported and 25% organically. Net income was $203 million, an increase of 36%. Companion Animal Group revenue was $746 million, an increase of 32%. (company press release)
• Colgate-Palmolive Company reported results for second quarter 2021. Sales for Hill’s Pet Nutrition were $794 million, an 18% increase year-over-year. Segment operating profit was $212 million, an increase of  11%. (company press release)
• Covetrus announced financial results for the second quarter of 2021. Net sales were $1.19 billion, an increase of 16% compared to the second quarter of 2020. Net loss attributable to Covetrus was $(31) million, compared to net income attributable to Covetrus of $54 million in the prior-year quarter. Non-GAAP adjusted EBITDA was $66 million for the second quarter of 2021 versus $63 million in the prior year period. (company press release)
• Heska reported results for the second-quarter of 2021. Revenues were $65 million, an increase of 42% from the prior-year quarter. Net loss attributable to Heska was $(0.6) million compared to net loss of $(6.4) million in the prior-year quarter. North American sales climbed 40% to $40.5 million. (IHS Markit Connect)
• Swedencare reported results for the second quarter of 2021. Revenues were SEK 160.2 million ($18.7 million), an increase of 400% due to recent acquisitions and the reopening of veterinary clinics around the world. Profit after tax improved by over 500% to SEK 32.6 million ($3.8 million). (IH Markit Connect)
• PetIQ, Inc. reported financial results for the second quarter of 2021. Net sales were $271 million an increase of 1.5% compared to the same quarter in 2020. Product segment net sales were $243 million, a decrease of 8%; Services Segment net revenues were $28.2 million compared to $2.7 million in the prior-year quarter. Net income was $4.0 million compared to net loss of $(1.4) million in the prior-year quarter. (company press release)
• Freshpet, reported financial results for the second quarter of 2021. Net sales were $109 million, an increase of 36% over the prior-year quarter. Net loss was $(7.5) million, compared with prior year net income of $0.2 million. (Globenewswire.com)
• Central Garden & Pet Company announced financial results for its fiscal 2021 third quarter ended June 26, 2021. Net sales for the Pet segment increased 10% to $508 million. Pet segment operating income increased 12% to $71 million. (company press release)
• Trupanion, Inc. announced financial results for the second quarter of 2021. Total revenue was $168 million, an increase of 43% compared to the second quarter of 2020. Total enrolled pets (including pets from our other business segment) was 1,024,226 at June 30, 2021, an increase of 38%. Net loss was $(9.2) million, compared to net income of $1.4 million in the second quarter of 2020. (company press release)
• Royal DSM reported results for the first half of 2021. Animal Nutrition revenues were EUR 1.65 billion ($1.95 billion), a 9.5% increase compared to the prior-year period. (IHS Markit Connect)
• Evonik Industries reported results for the first half of 2021. Animal nutrition revenues were EUR 821 million ($972 million), a 5% increase in year-over-year. (IHS Markit Connect)

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COMPANY NEWS RELEASES

• Zoetis announced it has entered into an agreement to acquire Jurox. Jurox’s operations are based in Australia, with additional regional offices and subsidiaries in New Zealand, US, Canada and the UK. Financial terms were not disclosed. (company press release)
• Elanco announced the acquisition of Tanovea (rabacfosadine for injection) from VetDC, Inc., which it licensed for further development and commercialization in 2019. Tanovea is approved for the treatment of lymphoma in dogs. Financial terms were not disclosed. (company press release)
• Merck Animal Health and Allflex Livestock Intelligence announced the release of Whisper on Arrival, a new sound collection device and predictive algorithm that predicts which animals will benefit from treatment for the control of Bovine Respiratory Disease (BRD). (company press release)
• Merck Animal Health has announced new naming for its cattle vaccine portfolio. All Merck Animal Health cattle vaccines will lead with Bovilis followed by the current product name. In addition, all vaccine packaging will share a new, consistent design and color coding to make it easier for customers to identify the vaccine formulation needed. (company press release)
• Merck Animal Health, Purina and Zoetis announced that veterinary clinics have from Sept. 1 to Oct. 31, 2021, to enroll in the Diabetes Pet Care Alliance program, which provides veterinarians with free diabetes education and management tools to give to owners of newly diagnosed diabetic pets. (company press release)
• The FDA announced that Dechra Veterinary Products has received approval for its generic Carprofen Tablets for use in dogs. (FDA)
• A federal judge has given final approval to a $12.5 million settlement resolving claims that Hill’s Pet Nutrition sold dog food with dangerous levels of vitamin D. Consumers who purchased certain Hill’s Prescription Diet or Hill’s Science Diet canned dog food between Sept. 1, 2018 and May 31, 2019 may be eligible to claim up their full purchase price with proof of purchase. (Law360.com, Topclassactions.com)
• Sunshine Mills announced a recall of nine lots of chicken and brown rice food sold under six brands because they might have too much aflatoxin. The company also recalled four brands of dog food in June after salmonella was found by a state agricultural department. The current recall involves certain varieties of Triumph Wild Spirit, Evolve Classic Super, Wild Harvest Premium, Nurture Farms Natural, Heart to Tail Pure Being and Elm Pet Foods Naturals.(AVMA SmartBrief – Food Safety News)
• Better Choice Company announced it has reached an agreement with Pet Supplies Plus to launch Halo Elevate, a new brand of super premium pet food. (Finance.yahoo.com)
• Belgium-based investment firm NXMH announced it has acquired Whitebridge Pet Brands. Financial terms were not disclosed. (Pet Business)
• Petco Health and Wellness Company, Inc. and Klarna announced they are partnering to offer Klarna’s Pay in 4 solution on petco.com, across Petco’s nearly 1,500 pet care centers nationwide, and the Klarna app. The new payment option gives pet parents the option to split their purchase into four interest-free payments spread over the course of six weeks. (company press release)
• ALR Technologies SG Pte. Ltd. announced the advancement in partnership talks on the GluCurve Pet CGM with two key pharmaceutical companies in animal health. Subject to further due diligence and financial negotiations, one of the two will be selected as a strategic partner through purchasing a stake in the GluCurve Pet CGM, a glucose monitoring device for diabetic pets. (Globenewswire.com)
• Mixlab, a startup that has developed a digital platform enabling veterinarians to prescribe medications and have them delivered to pet parents, announced it has raised a $20 million Series A in a round of funding led by Sonoma Brands. The company also operates its own compounding pharmacy. (TechCrunch.com)
• Smart pet collar maker Fi announced it is adding sleep to its collar’s tracking capabilities, using the collar’s motion sensing technology to monitor dogs’ sleep during the day and night. The goal is to offer metrics that could indicate underlying health problems. (Vet Advantage – Techcrunch)
• Animal Dermatology Group announced the acquisition of Animal Allergy and Dermatology Center of Austin, Texas, adding to its over 40 primary and satellite locations across the US, Australia and New Zealand that offer specialized companion animal and equine dermatology care. Financial terms were not disclosed. (company press release)
• POLAND Partner in Pet Food announced that it has reached an agreement to acquire Polish pet food manufacturer MispolA. Financial terms were not disclosed. (GlobalPets)
• UK/IRELAND CanBiocin, creators of species-specific probiotics for companion animals, announced it has aligned with Healy Group for market entry and distribution across the United Kingdom and Ireland. (Pet Age)
• CANADA Legault Group, the Canada-based owner of Mondou pet stores, announced it has acquired 35-store Canadian pet supply retailer Ren’s Pets. Financial terms were not disclosed. (Pet Products SmartBrief)
• CANADA Edra Publishing announced it has acquired specialized communications agency Duck & Partners and online veterinary platform CommuniVET. Financial terms were not disclosed. (IHS Markit Connect)
• CANADA ai has created an app meant to detect whether a cat is feeling pain. The app, called Tably, uses the phone’s camera to detect pain based on ear and head position, eye narrowing, muzzle tension and whisker changes based on the “Feline Grimace Scale.” (Vet Advantage – Reuters)

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ANIMAL HEALTH STOCK PRICE TRACKER

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ANIMAL HEALTH NEWS

• US – COVID USDA sampling of wild white-tailed deer in 32 counties in four states revealed 7% to 60% had SARS-CoV-2 antibodies, and scientists do not yet know whether the virus was transmitted by people or an intermediate species. The USDA’s Animal and Plant Health Inspection Service is testing wildlife to identify species that may serve as reservoirs or hosts for the virus, as well as understand the origin of the virus, and predict its impacts on wildlife and the risks of cross-species transmission. (AVMA SmartBrief – Ars Technica)
• US – VETERINARY CBD USE The Veterinary Cannabis Society has launched a website with educational resources for veterinarians, pet owners and cannabis product companies. The website offers curated educational content and highlights local, state and federal developments related to cannabis use in animals. (Vet Advantage)
• NEW ZEALAND – METHANE EMISSIONS Scientists in New Zealand have developed what they’re calling a “methane vaccine,” technology that they say could substantially reduce the amount of greenhouse gas emissions from cows. the vaccine aims to introduce antibodies into a cow’s saliva that pass to the animal’s stomach and neutralize the bacteria responsible for methane production. The next step is producing a consistently large amount of antibodies that then go into the saliva and to the rumen. (Vet Advantage)

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BRAKKE CONSULTING VIEWPOINT

Will we have a safe and efficacious African swine fever (ASF) vaccine soon? This used to be a billion-dollar question and has been asked by many since 2018 – the year ASF outbreaks started in China.  China produces almost half of the pigs in the world annually, and the damage caused by ASF was once unthinkable: the loss of tens of millions of pigs in a few months in 2018-2019.

Since 2018, the number of research laboratories and animal health companies that are working on ASF has increased significantly around the world.  Funding for ASF research has also poured into public and private institutions. Based on the ASF research conducted before 2018, gene-deleted mutants were considered as the main hope for an efficacious ASF vaccine.  However, we have very limited knowledge about these modified live virus (MLV) vaccine candidates, and unauthorized use of them has caused more harm than help in China in the last two years. For example, thanks to enhanced on farm biosecurity procedures, 2020 was good year for swine producers in China; however, the story in 2021 will be very different due to the introduction of these attenuated ASF virus mutants. Key lesson learned: vaccine safety is still very important even in desperate situations and it should be evaluated carefully and with patience.

Subunit ASF vaccines were considered a long shot a few years ago due to the past failures and the clear challenge of working with a largely unknown ASF virus consisting of a huge genome.  However, recent efforts from several groups around the world indicate that a safe and efficacious ASF subunit vaccine is possible in the foreseeable future. Because subunit vaccines are intrinsically safe and DIVA (differentiate infected from vaccinated animal) compatible, ASF could be preventable and eventually eradicated in ASF endemic countries.

Jishu Shi

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YOUR VIEW

Last week we asked you how easy it has been to fill open positions in your organization in 2021. Most of you – 69% – said it has been very difficult; the rest said it was somewhat easy.  None of you said it was easy to fill those positions. Interestingly, most of those who answered “very difficult” were on the clinical practice side of our business, despite being a minority of our readership.  This correlates with what we are hearing about veterinary manpower shortages, both DVMs and non-professional staff.  On the industry side, manufacturing and warehouse positions seem to be the biggest challenge.

This week

This week’s news included several announcements of smaller acquisitions; the last mega-merger was Elanco’s acquisition of Bayer Animal Health.
Do you think there will be another mega-merger announced in the next 12-18 months?