Have you ever attended a seminar expecting to focus on one topic, only to leave contemplating something entirely different?

Yesterday, I attended an event at the NC Biotechnology Center in Durham, NC, hosted by the College of Agriculture and Life Sciences at North Carolina State University. The event, titled “Emerging Research Showcase: AI and Precision Livestock Farming,” featured insightful presentations from industry leaders, faculty, and students. While I gained valuable knowledge about NCSU’s advancements in AI and robotics within pig, poultry, dairy, and beef cattle sectors, the experience provoked me to reflect on how we can effectively communicate with consumers about our food and animal health products in the future.

The presentation delivered by Dr. Katie Sanders, Assistant Professor and Extension Specialist, titled “Leveraging Science Communication and Engagement around the Use of AI for Animal Health,” prompted me to consider how consumers will access information in the future. Dr. Sanders highlighted the example of GMOs to illustrate a significant gap in public understanding: while 90% of scientists believe GMOs are safe, only 50% of consumers share that view.

My key takeaway is that animal health companies operating in the livestock, poultry, and companion animal sectors should control how Large Language Models—advanced AI systems—are trained on the safety and efficacy of their products. While “influence” may be more accurate than “control,” it’s important for these companies to recognize the shift from traditional online searches to conversational platforms like ChatGPT. Now is the time for animal health companies to consider their role in guiding the information that AI systems provide to consumers.

Bob Jones

It seems you can’t turn around these days without bumping into some information or opinion about AI – artificial intelligence.   Next week’s issue of Economist (published today) carries a cover story about the risk to the global economy if there’s a major correction to AI stocks, because of their “stratospheric share prices.”  “It would be one of the most predicted financial implosions in history,” according to Economist.  Then there’s debate about whether AI will take jobs away from humans, or whether it will make humans more productive. Or both.

AI is migrating into the veterinary profession in a myriad of ways.  It is already well established in medical records – converting recorded exam conversations into medical notes, a major time-saver.  It is being built into PIMS, the computer systems veterinarians use, to yield more and better management data.  AI-assisted technology is being developed to reads radiographs, or to prepare radiographs so veterinarians can make better, faster diagnoses.  There are other AI-powered diagnostic tools.  And one company has even announced an AI tool that can predict the likelihood of canine diseases as much as 6 years in advance, using clinical exams, environment, dog breed, and lifestyle. A major benefit, according to the company, is to “adjust treatment plans, exercise, or diet plans” to minimize the risk.   Sounds like the ultimate in preventive medicine.

Regardless of how AI evolves in veterinary medicine, I’m betting that it will play a much bigger role in helping veterinarians make better, faster decisions, than making the decisions for them.  Meanwhile, it seems prudent to not overload your portfolio with AI stocks, just in case.

John Volk

I like to see statements like these:  

“…Strong growth driven by livestock…” (Merck’s 3Q25 Financial Report for Animal Health)  

“…Sales of Livestock products increased by 14% organically…” (Zoetis 3Q25 Financial Report)  

“…10% Growth in Farm Animal business…” (Elanco 3Q25 Financial Reporting)  

The importance of having a balanced animal species portfolio should be apparent for companies and investors in the animal health (AH) industry. Can you imagine what the stock market would be doing to the publicly traded animal health companies if it wasn’t for the livestock business shoring up both the top line and the bottom line?  

In the past few years, so much emphasis was placed on the companion animal (CA) business, resulting in discussion about how the only growth in AH was in the CA space.  

In fact, companies disinvested in the livestock market in many ways through reduction in R&D spending, downsizing commercial activities, and even divesting portfolios. Investors were bearish on both established companies and startups in livestock and capital investment in livestock was nearly impossible to secure. There was even discussion about spinning off the livestock business of the larger players!  

Certainly, there was solid reasoning behind these strategies, but in my opinion, it is short-sighted. There are certain ‘constants’ in our business, and livestock animal health is one of them. It provides sustainable growth based on global population increases and the human desire for animal proteins.  

In my view, we need more investment in innovation for livestock, and we know that livestock producers will pay for innovative products. The market will respond and be positive for companies or startups that are successful – and we will see more headlines like the ones above. 

Paul Casady 

Four years ago, I returned to clinical practice after two decades of non-clinical roles in animal health.  The main reason for me was to experience first-hand what has changed for veterinarians in practice.  Although some aspects have evolved, there are far more opportunities that still exist.

Consider these similarities between general practices in 2000 and today- including corporately owned.

• Most provide the exact same services as their nearest competitors
• Many have underutilized space and equipment
• There is little distinctiveness in their business models
• Continued use of practice management systems that are long overdue for modernization

Now add this double-edged sword…

• There are more FDA veterinary products now than in 2000 (even Google couldn’t tell me exactly how many)
• Establishing these new products within practices and with veterinarians has become increasingly expensive and challenging due to evolving marketing strategies and distribution challenges.

And for pet owners…

• Lack of connectivity between veterinary practices, specialists and pet owners is resulting in larger gaps in communication, patient care and overall health management
• Absence of national electronic prescribing may be preventing cost savings from generics and contributing to decreased adherence to prescribed medications
• Veterinarians’ knowledge gap may be widening despite their conscious effort to stay informed

We need more disruption in our industry, and it is unlikely to come from major players.  As editor of the newsletter, we get to highlight innovative, smaller organizations that are on the edge of discoveries and carving out new paths.  I am hopeful that their contributions will lead to practical, affordable solutions that will springboard veterinary practices into the next era of the profession.

Dr. Christine Merle

Transparency Wins: Why Early Disclosures Build Investor Confidence
In the world of due diligence, time is money and credibility is everything. One of the most common mistakes we see founders make is waiting too long to disclose risks. The reality is simple: the right investor or partner will always find out. How you manage that discovery defines the tone of the relationship and often determines whether a deal moves forward at all.

Early disclosure builds trust.
Being upfront about potential risks — whether regulatory hurdles, pending IP, or supplier dependencies — signals integrity. Sophisticated investors know every company has challenges; what they value is honesty and control. Transparent founders are perceived as lower risk because they demonstrate awareness and proactive management.

It accelerates the process.
Surprises slow deals. When investors uncover issues late, they must re-assess valuation, structure, or even internal approvals.

It frames the narrative on your terms.
When you disclose first, you control the story. You can explain the “why,” the “so what,” and—most importantly—the “what we’re doing about it.” If the investor uncovers the same point independently it can easily be misinterpreted as negligence or concealment.

It reveals alignment and problem-solving ability.
Sharing your risk-mitigation plan shows strategic discipline and resilience … qualities that distinguish strong operators from storytellers.

It enhances long-term relationships.
Good deals don’t end at signing. Transparency in diligence sets the tone for that future relationship — one based on confidence, not caution.

Early disclosures aren’t admissions of weakness; they are demonstrations of leadership. The smartest founders understand that credibility compounds better than capital — and both begin with clarity. At Brakke we help founders identify, disclose and mitigate strategic operational risks and get them ready for critical conversations!

Alexis Nahama

Expanding the horizon for veterinary services revenue and product sales 

It was not that long ago when some in our industry were claiming that we had too many veterinarians and that the ROI on pursuing a DVM or becoming a Veterinary Technician did not provide a reasonable return. How things have changed! 

There are many reasons behind the ‘turnaround’ but clearly a driver was the increasing demand for veterinary care for pets and livestock. And the positive pressure comes in many forms: change of lifestyle for practicing veterinarians, influx of corporate veterinary practice ownership, high demand for specialized food animal practitioners (i.e. Poultry veterinarians). 

We know that many people simply cannot afford certain services- nor do they have the ability to purchase necessary drugs for controlling disease or parasites. In the industry, we recognize that we reach saturation points(for example with flea and tick treatments) and as a result, simply battle it out for share. 

Recently states are looking at allowing veterinary technicians or other new roles (midlevel veterinary practitioner) to expand their scope of practice acting more as a ‘Physicians Assistant’- like in human medicine. Will this bring down costs and extend care? 

Would national licensing for veterinarians and veterinary technicians or decreased cost and time for foreign veterinary graduates to achieve licensure increase supply and service? 

Lastly, should we be more aggressive in the development and registration of generic drugs? Reducing costs and increasing affordability? 

In my view, we as an industry- along with the profession, need to think strategically together about how to expand the market for both veterinary service and product sales. It will certainly benefit all! 

Paul Casady 

September’s US unemployment data from the Bureau of Labor Statistics are not yet available due to the government shutdown, but through August 2025, the data seems to indicate that the unemployment rate is ticking up and that there are more job seekers than there are new job openings. What does this mean for hiring?

Brakke Consulting recently conducted the 2025 Hiring Survey, focusing specifically on the animal health sector. The results point to slight improvements despite the current turbulent employment environment. Notably, nearly two-thirds of respondents reported that their company achieved all its hiring objectives. Additionally, the average time to hire has improved slightly compared to last year. Nonetheless, when viewed over a longer period, the data reveals that the overall time required to fill positions has generally increased since the COVID-19 pandemic.

The survey also highlighted several hiring trends in our industry. These trends include employee turnover rates, the use of recruiters, time-to-hire metrics, the integration of video technology in recruiting processes, the use of “soft skills” assessments to evaluate candidate suitability, and the growing importance of employer branding.

Thanks to all who completed the survey. The full results will be shared via a webinar later this year for survey participants. If you’d like to attend, please contact me or Amanda McDavid.

Jeff Santosuosso

As we turn the page to October, it is baseball playoff time.  As a Met fan, I am left searching for a team to follow after a slow, painful 3 ½ month collapse into oblivion.  I know my friends who are Yankee fans will tell me there is plenty of room on the bandwagon but that will never happen.

In the companion animal space, there is so much focus on the parasiticide market but competition in the dermatology market is about to heat up in a big way.  According to Kristen Peck, the CEO of Zoetis, there are more than 20 million dogs that are under or untreated leaving a huge opportunity.

Zoetis built this market with their blockbuster products, Apoquel and Cytopoint.  Combined on a moving annual total basis, these products sell in excess of $1.7 billion globally and $1.1 billion in the US alone.  Elanco launched Zenrelia in September 2024 but faced challenges with label restrictions, but the   FDA recently approved a label odification lifting the label warning.  Soon, Merck will be entering the fray with Numelvi, the first 2nd generation JAK inhibitor.  Numelvi has been approved in the EU and should be approved in the US shortly.

The gloves are off and the competition is on.  The major animal health manufacturers are expanding sales teams, establishing marketing budgets to capture growth and market share in a growing and undertreated dermatology market.  Plenty of room on the dermatology bandwagon.

Randy Freides

I continue to think about the number of innovative products necessary to meet the expected growth of the animal health market over the next 10 years, especially given the generic parasiticides we expect to see on the market for dogs. When taken in the context of the ongoing discussion about reducing the necessity for animal testing in the FDA approval process, how will this impact future development plans?

Some of the expected benefits of less animal testing include:

• Reduced timeline and cost of approval, with some suggesting it could reduce time and/or cost by 20% or more
• Ethics and animal welfare resulting in fewer animals being needed for terminal studies
• Use of computational models and microphysiological systems to facilitate studies
• Overall expedited approval to support market growth
• Facilitate development and investment in medications that might not reach blockbuster status

Each of these comes with the challenge of how to manage any transition:

• Initial investment in technology
• Ensuring the necessary regulatory endpoints can be met from non-animal studies
• Having proven, reliable and consistent processes that are validated
• Accurate alternative methods that correctly quantify riskChaos of living through a change

There is no clear guidance for the animal health industry and most suspect this will be dealt with on the human side first. It is impossible to eliminate all animal studies for veterinary products. I think we can agree that adoption of new methods that can decrease the approval timelines and costs while ensuring the continued safety and efficacy of the medications will be good for future innovation.

Chuck Johnson  

Let’s talk about horses.  The equine industry is the most fascinating segment in the animal health industry.  In some ways it shares economic principals with the livestock industry.   But it also demonstrates the deep passion and emotionalism of the pet industry.  It is also the most complex segment of animal health with multiple unique product categories and brands.  Success here requires marketers to be very well informed.

Earlier in this newsletter We announced the sixth edition of the Brakke Equine Market MegaStudy, this time in collaboration with Trone Market Research.  This has become the go-to study of horse owner purchasing behavior, covering more than 15 product categories and more than  400 brands.  There is also a wealth of data on horse owner demographics and media usage.  I was the principal investigator for several of the equine studies.  The project leader this year is my colleague Dr. Chuck Johnson who is actually an equine vet.  I’m sure Dr. Johnson will bring many fresh insights to the study.  If you are involved in or interested in the horse market, you’ll find this study to be a practical and productive resource.

John Volk, Senior Consultant
Chicago