Reading Animal Health News and Notes this week brings seminars to my mind.  If you haven’t already done so, by all means sign up today for the Brakke 2024 Animal Health Industry Overview that will be conducted at the Western Vet Conference on Monday, Feb. 19 from 2:00pm to 4:00pm.  If you attended the Overview at VMX last month, you know that it was a standing room only audience, so please reach out today to Amanda McDavid to reserve your seat!  The space is filling fast, but there are still places available.

Two additional seminars will be conducted on Monday morning, in the same room as the Overview later that day.  At 9:30 am to 10:30 am, Yuki Ujimasa, DVM, MS will present an overview of the process to be followed in registering veterinary products in Japan.  For anyone considering starting the process of bringing products to Japan, you’ll find Yuki’s presentation to be invaluable in describing the steps to be followed and some background on working with the regulatory agencies in Japan.  Yuki is a great resource for you if you are interested to pursue this important market.

At 11:00 am Jeff Santosuosso will present a very informative, practical overview on strategies to identify talent as you compete to hire the best.  Jeff has a wealth of knowledge about recruiting top talent and can help you break through the clutter.  You’ll get some solid information from Jeff and have the benefit of useful discussion among the participants.  I attended this seminar at VMX and I found it very informative and extremely well done.

Both morning seminars are available to you at no cost, but they do require that you RSVP to secure a spot.  See the links earlier in the Newsletter to sign up!

Recently we’ve also had several inquiries about our Transaction Insights seminar that was last conducted in Kansas City in August 2023.  Currently, we are setting up plans to conduct this seminar again at the conclusion of the Kansas City Animal Health Corridor in August.  More details will be available in coming weeks.

Jim Kroman

February is National Pet Dental Month. Many of you have heard about this. Many actively promote it! The AVMA’s focus includes an instructional video, a photo contest, a veterinary tool kit, and more. There’s also a section designed for pet owners, describing various oral maladies and how veterinarians can help. Likewise, more suppliers are promoting the event, from food manufacturers to those marketing treats, rinses, gels, and other treatment forms.

We’re reminded that poor pet oral hygiene can lead to severe bacterial infections, resulting in diabetes, kidney disease, and heart disease (according to the American Veterinary Dental College). Increases in pet owner and veterinary awareness, plus advances in oral radiography and other technologies provide great promise, more precise diagnosis, and better prognosis.

Though this initiative is not new, one wonders how effective it is – and how effectively we’re managing it at a staff and client/patient level. What happens at the clinical level? In particular, to what degree are we leveraging staff? How confident are we that our technicians are prepared to manage screening of these cases we solicit? Can we optimize work flow for best patient and client outcomes, case management, and human resources?

Jeff Santosuosso

Two of the major industry trade shows take place in January: VMX and IPPE, both of which I was fortunate to attend.

At the VMX, there was much enthusiasm and interest as the industry continues its evolution back to the ‘normal’ days post-COVID. Companies seem cautiously optimistic, although I heard several reports of cost controls implemented in Q4. I always find this tactical move interesting — by the time Q4 rolls up, and if you are not on target for either revenue or expenses, good luck! It’s like trying to stop an ocean liner.

The IPPE was also full on and well attended, especially a large contingent from LATAM. Concerns over HPAI are at the forefront of many producers, but non-vaccination still seems to be the position of many countries. In the face of widespread events and more cases of HPAI jumping species, it could be that the industry takes a pro-vaccination action — not due to poultry sanitation, but more to the environmental effect on other animals.

On a last note, the VMX was apparently well attended by executive leadership from many companies. Conspicuously, the same leadership was not readily visible at the IPPE. In my view, AH leadership needs to recognize the importance of livestock by showing visible support and interest for our customers in attending these key food animal events – not just the big companion animal conventions. Revenue and profits from the animal production segment have been a solid foundation of our industry in the past, and will continue to be so in the future. People have to eat!

Paul Casady

As Bob mentioned last week too, the vibe I am feeling is that 2024 is off to a strong start.  There are good signs for the industry: inflation is down, a soft landing seems possible and the people in the industry seem positive.  I wonder, however, if the industry might be nearing a crossroad.

As I review quarterly earnings reports from the public animal health companies, I see companies increasing prices in the 4-6% range.  This is higher than we saw in the pre-pandemic period.  Some of the rationale for these increases tie back to manufacturing cost increases.  Another reason for the price increases is the inability to grow volume.

Savvy investors are concerned with the quality of earnings, focusing on topline growth vs. expense reductions.  When digging into sustainable revenue growth, investors are much more interested in volume growth vs. price growth.  Manufacturers who rely on price increases on existing products to drive revenue growth may eventually be put in a precarious position when consumers reach a breaking point and trade down to generics or, shift purchases to new technology.  In the end, the lifeline for the Animal Health industry is innovation.  Innovative new products and technology always have commanded premium pricing and continue to fuel future expansion.

Continuing to Invest in R&D is critical for long-term success.  Let’s see what materializes in 2024 and beyond from the hundreds of millions of dollars spent on R&D.  That’s where the industry’s sustainable growth will come from

Randy Freides

I might not be the best judge of vibes, but there was a pretty good vibe going on this week at the NAVC’s VMX veterinary expo in Orlando.  The event was well attended, again over 27,000 attendees, and many people felt that we have finally moved on from the disruptions caused by the pandemic − business was back to normal, like the old times.

Unlike the old times, the convention show floor seemed to have moved on to new, bigger times – there were some amazingly large, open, airy, and welcoming booths that were attracting lots of visitors.  These booths were full of technology, from large screens to personal digital interactions, aiming to educate and inform.  Companies have been changing to open and technology-driven booths for years now, but the number and size of them seemed noticeable this year.

But, as many readers know I like to say, “it’s all about people” and this is why VMX is always a great way to start the year.  Between old and new colleagues, reunions of people from companies that don’t exist any longer, and new companies entering the animal health industry, this is a great people event as we all begin a new year.  If you missed VMX, you have one more chance… see you next month at Viticus’ WVC.

Bob Jones

Innovation in veterinary medicine can take many forms.  It could be groundbreaking new drugs or non-pharmaceutical therapies.  It could be novel technologies that help veterinarians practice better medicine, or streamline practice workflows. It could be new ways of delivering veterinary services, from telehealth to incorporating artificial intelligence. It could manifest as new models for veterinary practice.  We’ve seen all of these impact the field of animal health in recent years.

Innovation can be exciting, but it can also sometimes feel threatening. Today’s veterinary practices are facing challenges to the “traditional” way of doing business, from the loss of product sales to retail & online pharmacies, to the push for broadening the use of telehealth and AI-based tools.  It is up to us as a profession to embrace innovation to better serve our clients and patients. Are you ready?

Lynn Fondon

Happy New Year!

You can tell it’s January and VMX is around the corner by all of the announcements in this week’s newsletter.  Today’s newsletter also is a great reflection of the animal health industry: the announcements are global in nature; numerous transactions are in the works; new products are announced; quarterly earnings are reported; there are new FDA registrations for some products, and additional label claims for others; a new veterinary school has been approved; and states are changing their regulations regarding pet sales and telemedicine.  No doubt  you’ll be hearing more about all of these topics and more at the upcoming veterinary conferences.

As we do every year at this time, we’ll take a look back and a peer forward to distill a picture of what the industry accomplished in 2023, and where it’s likely headed in  2024.  We’ll share those observation in the annual Brakke Industry Overview.  There’s an announcement about the Overview at VMX and WVC in this newsletter.  If you’re attending VMX and haven’t registered yet, I encourage you to do so.  Seats are limited.

We look forward to seeing many of you in Orlando.

John Volk, Senior Consultant

Which country around the world has the highest ratio of veterinarians per capita?  If you said Lativa, you’d be right.  Latvia has a population of 1.9 million people and has 129 veterinarians per 100,000 inhabitants.  Which country is second?  That would be the country where I am from, Brazil, which has 77.4 veterinarians per 100,000 inhabitants, or 166,119 practicing veterinarians in a population of 214 million.  By contrast, the average across Europe is 38 veterinarians per 100,000 inhabitants.

Brazil may be experiencing a new boom in veterinary medicine, with the development of new veterinary specialties and a consequent increase in the standard of care for dogs and cats. This is a great opportunity for companies in the sector.

Despite this, there is a worry that there are too many veterinarians in Brazil.  Many feel that this oversupply has led to stiff competition for jobs, lower salaries, and a decline in the quality of veterinary care.

Perhaps the oversupply of veterinarians is starting to impact younger veterinarians as a recent study shows a much greater level of dissatisfaction with their veterinary medicine coursework than older veterinarians.  It would be a shame that as Brazil’s resilient economy strengthens and veterinary services for pets improves, veterinarians are more unhappy.

Mauri Ronan Moreira

This week’s newsletter highlights Blackstone’s acquisition of Rover Group, Inc, the world’s largest network of dog walkers and pet sitters, for $2.3 billion.  The Seattle-based company, started in 2011 with a simple plan of connecting pet parents with pet service providers via their Rover.com app and website in North America and Europe.

Fast forward ten years to August 2021, shares of ROVR start trading on Nasdaq.  After weathering financial losses from decrease in pet sitting services during COVID pandemic, Rover saw strong recovery on accelerated demand due to workers’ return to office, increased travel and the ‘pandemic pet’ phenomenon.

Now, Rover is acquired for billions of dollars.  From 2011 through the end of September this year, more than 93 million services have been booked by more than 4 million pet parents through 1 million pet care providers paid across North America and Europe.  Most of this growth has come organically – by word of mouth.

After a recent knee surgery, I used Rover for the first time to avoid inconveniencing friends and family with dog duties.  The app was easy to navigate, the booking process was simple, and found several well-qualified dog walkers.  I had an immediate need and Rover provided an elegant solution.

Today’s pet owners are willing to pay premium prices for high-quality care, flexibility, and convenience.  And today, Blackstone is willing to pay a lot of money for a pet services app.  Which app is next?

Richard Hayworth

This newsletter contains a reference to a new drug in development by Loyal (part of Cellular Longevity, Inc. of San Francisco, CA.).  Loyal’s drug, identified only as LOY-001, may eventually be approved to provide life extension in dogs.  This week, Loyal released a widely reported conclusion by the US FDA that “the data you provided are sufficient to show that there is a reasonable expectation of effectiveness,“ which could lead to conditional approval by FDA as early as 2026.

LOY-001 is thought to modulate insulin growth factor-1, or IGF-1, which is associated with aging and longevity, and in dogs is known to play a role in determining body size.  This initial offering is expected to be available as an extended release implant for use in large adult dogs, which generally have shorter lifespans than small dogs.  Several other products are also in Loyal’s pipeline as follow-on compounds to also provide extended life in adult dogs, and may be effective in oral form as well.  Other companies and research institutions have also announced other projects focused on this same goal of extending lifespans in dogs (which of course could lead to similar work in humans).

While in its infancy, this work could profoundly affect the health (and the lifespans) of pets and therefore the practice of veterinary medicine.  We’ll keep an eye on these trends and try to keep you up to date on the progress as these drugs move forward.  Success is not guaranteed; but innovation will proceed no matter what!

Jim Kroman