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Brakke Consulting’s
Animal Health News & Notes for July 8, 2022
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
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IN THE NEWS:
Earnings News
Krka
Other News
3M
AGILA Tierversicherung
Argenta
Brave Paws
Calier
Cargill
Dechra
ECO Animal Health
ezyVet
F.L. Emmert
FibreCycle
Hendrix Genetics
Innovafeed
JAB Holding Company
Kent Pet Group
Lovitts
Neogen (3M)
Neogen (Thai-Neo Biotech)
Nestle Purina
Our Bird
Pen & Tec Consulting
Pinnacle Pet Group
QSM Diagnostics
Rarebreed Veterinary Partners
Revelstoke Capital Partners
Symrise
Thai-Neo Biotech
Trupanion
Vet’s Best Friend
Veterfina
Virbac
WERTGARANTIE Group
Wilbur-Ellis Nutrition
Wing Pet Food
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2022 ANIMAL HEALTH SUMMIT
August 29-30, 2022
Location: Arvest Bank Theatre at the Midland | Kansas City, MO
Registration is now open for the 2022 Animal Health Summit.
Register today! The Animal Health Summit features two days of networking, 1:1 business partnering, industry thought leaders, panel discussions, speakers and emerging company presentations. Learn more
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EARNINGS NEWS RELEASES
- Krka reported results for the first quarter of 2022. Animal health revenues were EUR 21.9 million ($22.6 million), an increase of 1%. (IHS Markit Connect – subscription)
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COMPANY NEWS RELEASES
- Dechra announced the launch of Zenalpha (medetomidine and vatinoxan hydrochlorides injection), a new alpha-2 combination drug for sedation in dogs that helps minimize cardiovascular side effects. (company press release)
- Neogen Corporation announced that Garden SpinCo Corporation, a direct wholly-owned subsidiary of 3M Company, priced an offering of $350 million aggregate principal amount of 8.625% senior notes due 2030 in a private placement at par. The Notes are being offered as part of the financing for the proposed merger of the Food Safety Business of 3M with Neogen in a Reverse Morris Trust transaction. Separately, Garden SpinCo entered into a credit agreement consisting of a five-year senior secured term loan facility in the amount of $650 million and a five-year senior secured revolving facility in the amount of $150 million which will be available in connection with the Merger and related transactions. The Credit Facilities, together with the Notes, represent the financing contemplated in connection with the Merger. (PRNewswire)
- Trupanion announced that its direct payment solution is now available to thousands of additional hospitals through a strategic partnership with ezyVet practice management software. According to the company Trupanion is the only provider that can pay the veterinary invoice at the time of check-out, eliminating the reimbursement model. (company press release)
- QSM Diagnostics announced the launch of Fetch Dx, a mail-in testing service for US pet owners to detect canine ear infections caused by Pseudomonas aeruginosa. (IHS Markit Connect – subscription)
- Hendrix Genetics has partnered with CSIRO – Australia’s national science agency – to conduct exploratory research to assess the viability of a sex sorting technology which can identify eggs containing male embryos at point of lay before they are incubated and hatched. A major objective of the project is to explore how this technology can best be integrated with current industry practice. (Feedstuffs – subscription)
- Wilbur-Ellis Nutrition announced that it has entered into a definitive agreement to acquire L. Emmert, a manufacturer and marketer of advanced nutritional solutions for the pet and livestock industries. Financial terms were not disclosed. (Feedstuffs – subscription)
- Rarebreed Veterinary Partners announced the acquisition of Vet’s Best Friend (VBF). The deal adds 47 locations to Rarebreed’s 71-practice community. The company is majority backed by Revelstoke Capital Partners. Financial terms were not disclosed. (Streetinsider)
- Brave Paws announced the launch of its new Anxiety and Stress Support Chewables for dogs. The supplements are formulated with sustainable, plant-based ingredients, including a patented blend of stress-relieving botanicals. (Petfood Processing)
- Cargill and Innovafeed announced they have extended their partnership to jointly develop and market insect meal to help aqua feed customers. The agreement combines Innovafeed’s expertise in formulating precision insect ingredients and Cargill’s global animal nutrition capabilities to scale up the use of insect ingredients in multiple types of animal feed. (Feedstuffs – subscription)
- EU Virbac announced that European authorities recently approved a label variation for Suprelorin (deslorelin subcutaneous implant), allowing its use in male cats and prepubertal bitches for the induction of temporary infertility. Suprelorin has been approved in the EU for temporary infertility in male dogs and male ferrets since 2007. (IHS Markit Connect – subscription)
- THAILAND Neogen Corporation announced that it has acquired Thai-Neo Biotech , Ltd., a longstanding distributor of Neogen’s food safety products located in Bangkok, Thailand. Terms of the agreement were not disclosed. (PRnewswire)
- THAILAND Nestle Purina announced the opening of a new 93,872 square meter plant in Thailand for the production of its brands Purina One, Pro Plan, Felix and Fancy Feast. The new equipment will primarily be focused on the wet cat single-serve food product line, and will supply the Asian, Oceanian, and African regions. (GlobalPets)
- NETHERLANDS JAB Holding Company announced the signing of a definitive agreement through which Pinnacle Pet Group will acquire 100% of the shares in Veterfina Verzekeringsmaatschappij V. and its European subsidiaries, a pet insurance business headquartered in the Netherlands. Financial terms of the agreement were not disclosed. The news follows JAB’s recently announced acquisition of AGILA Tierversicherung AG, a German pet insurance company, from the WERTGARANTIE Group. (Businesswire)
- UK ECO Animal Health announced an agreement with Scotland’s Moredun Research Institute to develop a new poultry vaccine for the sustainable control of poultry red mite. (IHS Markit Connect – subscription)
- AUSTRALIA FibreCycle – a subsidiary of Kent Pet Group – announced it has acquired two Australian manufacturers: Our Bird, a manufacturer of bird seed and cat litter; and Lovitts, a manufacturer of companion animal nutrition. Financial terms were not disclosed. (Pet Product News)
- EU Argenta announced it has acquired Pen & Tec Consulting. The acquisition is part of its growth strategy to expand its regulatory abilities into feed and food additives, and also expands Argenta’s geographical footprint into southern Europe. Financial terms were not disclosed. (IHS Markit Connect – subscription)
- CHINA Symrise – a division formed earlier in the year as a result of the fusion of Diana Pet Food, ADF, IsoNova and Schaffelaarbos – announced it has acquired Chinese manufacturer Wing Pet Food, a supplier of pet food nutrition, pet food protection ingredients, and pet food palatability enhancers. Financial terms were not disclosed. (GlobalPets)
- SPAIN Calier – the animal health branch of Grupo Indukern – announced the launch of Wevap, a new digital vaccination audit tool for poultry producers designed to help effectively oversee the entire vaccination process against Salmonella Enteritidis and S Typhimurium. When a vaccination process is finished, the tool generates an automatic report that is sent to Calier’s technical service arm, which analyzes information and suggests points for improvement. (IHS Markit Connect – subscription)
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ANIMAL HEALTH STOCK PRICE TRACKER
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ANIMAL HEALTH NEWS
- US – VETERINARY SHORTAGE A bill was signed into law as part of Arizona’s state budget next year to address the veterinary shortage in the state by providing incentives to keep veterinarians working within the state. This new bill will create a new Arizona Veterinary Loan Assistance Program, which will provide student loan reimbursement, up to $100,000, to up to 58 veterinarians who graduated from school after January 1, 2023. To qualify for the reimbursement veterinarians must work in Arizona for at least 4 years, and it will be required for 2 of those years spent at a municipal, county, or nonprofit shelter or in an agricultural practice that the USDA designated as having a shortage. (DVM360)
- US – ANTIMICROBIAL USE The FDA’s Center for Veterinary Medicine (CVM) released both a status update on Phase I of its five-year action plan for Supporting Antimicrobial Stewardship in Veterinary Settings as well as a report to describe some of the data that FDA and federal partners collect regarding antimicrobial sales, use, and resistance in US animal agriculture and the related food chain. (FDA)
- US – FOOD SAFETY The FDA finalized Guidance for Industry (GFI) #245: Hazard Analysis and Risk-Based Preventive Controls for Food for Animals to help animal food facilities subject to the FDA Food Safety Modernization Act (FSMA) Hazard Analysis and Risk-Based Preventive Controls for animal food requirements develop a food safety plan to prevent or significantly minimize hazards that could cause illness or injury to people or animals. (FDA)
- AUSTRALIA – VETERINARY EDUCATION Queensland, Australia-based James Cook University has joined the American Association of Veterinary Medical Colleges as a provisional member. JCU is the fifth institution in Australia to join the AAVMC. (Vet Advantage)
- US – CANINE BRAIN RESEARCH Treatment with autologous skin-derived neuroprecursor cells reversed a dementia-like condition in two out of five pet dogs, and four of the dogs showed “clinically meaningful” improvement after treatment, researchers reported in Stem Cell Research and Therapy. The condition experienced by dogs is similar to Alzheimer’s in humans, and Skin2Neuron, the company behind the therapy, plans to start human trials in 2024. (AVMA SmartBrief – BioPharmaReporter)
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BRAKKE CONSULTING VIEWPOINT
The financial markets have taken a beating thus far in 2022. The Dow Jones Industrial Average has declined -14%, while the S&P 500 Index is down -18% YTD. Perhaps indicative of the animal health segment, PAWZ, the Petcare ETF that tracks the animal health industry, is down -30% YTD. Ouch.
The Fed recently raised its benchmark interest rate by 75 basis points with more hikes likely to come, so the days of “free money” or inexpensive borrowing are over. This can potentially have long term impacts on innovation in the animal health industry. The industry depends not only on the big companies (Zoetis, Elanco, Merck and BI) who have well-funded R&D organizations, but also on hundreds, if not thousands of small start-up companies for innovation, where access to cash is critical.
Investment capital and borrowing is needed by start-ups and early-stage companies to fund operations and growth. It remains to be seen how venture capital along with increased borrowing rates will impact the funding of innovation. Moreover, increased interest payments combined with reduced margins due to inflation may impact nascent companies in tenuous cash flow situations.
Innovation is critical to address the many unmet animal health needs both in terms of products and technologies. If your company needs help making decisions about innovation and funding, we can help.
Randy Freides
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YOUR VIEW
Last week we asked whether you have taken your pets on vacation with you – 59% of you said you had. Sounds like our pets are living the good life!
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