The Experts in Animal Health

Brakke Viewpoints

We are the experts in animal health

Brakke Viewpoint March 29, 2024

What do you think of when you see a pig?  Do you start to salivate thinking about bacon, ham, a big juicy pork chop or a slab of ribs?  Rick Slayman, a 62-year old Massachusetts resident with end-stage kidney disease sees pigs as a potential ticket to a dialysis-free life.

On March 21, doctors at Mass General Hospital performed the first transplant of a genetically modified kidney from a pig.  According to the Organ Procurement and Transplantation Network, approximately 27,000 kidneys were transplanted in 2023.  However, the waitlist for human kidneys has approximately 89,000 individuals on it.  Just think about how many people could live a productive, happy, healthy life if this operation proves to be a complete success.  This could potentially eliminate the largest barrier to transplantation which is organ supply.

The most critical obstacle to the use of animal organs in humans is organ rejection.  The kidney used in this procedure was genetically modified by eGenesis Bio to increase human compatibility.  eGenesis employed new technology to make 69 precise edits to the pig’s DNA (snipping certain characteristics out and adding others) to try to prevent the human body from seeing the kidney as a foreign body.  That, combined with monoclonal antibody treatments to reduce the likelihood of rejection, provide a possible pathway for animal organ transplantation.

Think again as you stare at that slab of ribs smothered in barbeque sauce.  Pigs might not only be a sustainable food supply but might provide a hugely critical source of organs for critical care human patients.

Randy Freides

Brakke Viewpoint March 22, 2024

Finding value in your distribution partner – full circle

A few weeks ago, we reported on the decision of Elanco to restructure their operations, with a shift in resources from farm animal to pet health operations. As part of this restructuring a reduction of 420 jobs is envisioned.

Less than two years ago, a similar shift occurred at Boehringer Ingelheim Animal Health.

These changes in focus from leading veterinary pharmaceutical manufacturers, may result in several possible opportunities for companies serving the markets, where focus and resources are being removed.

One direct result is loss of voice to the ultimate user of the product.

Enter the livestock distributor partner.

Distribution in the livestock segment has had to navigate major challenges during the past decade, from major manufacturers going direct to end consumer, the pandemic and the entry of an array of generic products, putting pressure on margins.

How did they manage to survive, and in many cases, thrive during this period? By changing with the times and doing some basic things really well. Distribution companies expanded through increased footprint by acquiring historic competitors, improving sales force efficacy and starting or significantly expanding private label offerings. This strategy, did in some cases set them up as a competitor to a manufacturer.

We are now entering a period where livestock distribution partners will be required to get product to the end customer again. The livestock product manufacturers who provide a successful business proposition to their distribution partner, may yet be the group to grow and be successful, especially when the cattle and swine cycles improve.

Lourens Havenga

Brakke Viewpoint March 15, 2024

Telemedicine in Veterinary Practice: What’s the Future?
Technology continues to reshape our lives, it’s no surprise that the veterinary industry is also embracing digital solutions, and as the sun sets on pandemic-era telemedicine regulations, a new dawn emerges for veterinary medicine. With California, Colorado, and Florida lifting restrictions, we stand at a crossroads—a moment to ponder the trajectory of telemedicine in our industry.

In general, telemedicine refers to the use of technology to remotely deliver health information, education, or care, and the COVID crisis increased focus and accelerated demand – especially in human health. However, the animal health industry, has been slow to embrace it’s use, and the jury seems to still be out on its future.

So, what are the overall upsides and hurdles?

The Upside

  • Accessibility – Telehealth bridges geographical gaps, allowing rural pet owners to access expert advice.
  • Convenience – No more stressful car rides for anxious pets—consultations happen from the comfort of home.
  • Efficiency – Faster diagnoses mean quicker treatment decisions, better follow-up after in-clinic visits.
  • Client Education – Telehealth educates pet parents in preventive care and behavior management.

The Hurdles

  • Vet to pet owner relationship is critical – Telehealth must complement, not replace, in-person visits.
  • Regulations – State laws vary and navigating them can be complex.
  • Privacy and Security – Protecting sensitive data is paramount.

As the industry adapts, collaboration between veterinarians, telehealth providers, and regulators will be key. We must tread carefully, ensuring technology enhances, not replaces, our connections. Will telehealth help enhance the care delivered by veterinarians?  Will it help bring more pets into veterinary care?  We will see soon in a few States.

Richard Hayworth

Brakke Viewpoint March 8, 2024

This week Paul Casady and I attended the Animal Health, Nutrition and Technology Innovation Europe event held in London, which was held by Kisaco Research.  This was the ninth event held in Europe and nearly 600 people attended.  Once again, this was a great opportunity to hear about our animal health industry, what challenges we face in the future and what new innovations are on the horizon.

Many of the topics covered at the meeting were discussed by panelists, who also answered questions from the audience.  A few topics deserve mention here, like one on the role of artificial intelligence will play in animal production presented by a representative of Microsoft.  In particular, one of the future challenges will be to bring all this data together so that producers will not be overwhelmed with bits of pieces of information.

Another topic for a panel discussion was “Dual Impact: Strategies to Mitigate Methane Emissions in Ruminants and Increase Productivity”, which was expertly led by Paul.  I pleaded for him to joke about bovine belches, but he didn’t.  Instead, he and the panel challenged us to think not with an “or” frame of mind, but with an “and” frame of mind when it comes to the environment and animal protein productivity.

Thanks to Kisaco, were able to learn more about the future of our industry and see friends that help make this a great industry.

Bob Jones

Brakke Viewpoint March 1, 2024

Aquaculture industry: A rising star in animal health

The recent acquisition of Elanco’s aquaculture business unit by Merck (MSD) has sent shockwaves through the industry. The transaction’s value alone is noteworthy, but the underlying financial analysis reveals even more intriguing insights.

Aquaculture is still a relatively unknown sector within the veterinary industry, but my recent professional experience in this field has ignited a passion for its potential. With a focus on salmon production in countries like Norway, Chile, Canada, and the United Kingdom, the aquaculture industry is pioneering cutting-edge technologies and attracting investments in novel solutions based on big data and artificial intelligence.

Merck’s strategic vision for animal health emphasizes precision aquaculture farming and innovative product development platforms. The company’s leadership in DNA-based vaccines, acquired as part of the Elanco deal, further cements its commitment to this growing sector.

Driven by passionate individuals, the future of aquaculture is poised to become a leader in technology and innovation for other animal health species.

Brakke: Your partner in unlocking opportunities in the aquaculture animal health market

Our team of experts can help you navigate the complex landscape of the aquaculture industry and identify lucrative growth opportunities. With our deep understanding of the market and extensive network of contacts, we are uniquely positioned to provide you with the insights and support you need to succeed.

Mauri Ronan Moreira

Brakke Viewpoint February 23, 2024

This week I attended Viticus Group’s 96th WVC Annual Conference in Las Vegas.  Like VMX earlier this year, the attendance was impressive and there was robust foot traffic in the Exhibit Hall. I spoke with several exhibitors, all of whom were extremely pleased with their engagement with veterinarians at the conference.  There were also many interesting lecture topics, including one I attended recapping Operation Ukraine, which is providing veterinary care to animals in Ukraine in the midst of a war. Congratulations to Viticus for a great event.

Brakke also presented our annual Industry Overview at WVC, with over 80 attendees.  We thank everyone for your interest in hearing our thoughts on how the industry fared in 2023, and where we believe it’s going in 2024. And a huge “thank you” to our panelists Dr. Dan Markwalder and Dr. Christine Royal for sharing your insights with us.

If you are interested in the Overview but weren’t able to attend at either VMX or WVC, we are happy to present it personally to your management team, or you can purchase the recording – just reach out to Amanda McDavid (amcdavid@brakkeconsulting.com) for more details.

Lynn Fondon

 

Brakke Viewpoint February 16, 2024

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

Brakke Viewpoint February 9, 2024

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

Brakke Viewpoint February 2, 2024

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

Brakke Viewpoint January 26, 2024

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

Newsletter

"Brakke Consulting Animal Health News & Notes” provides a summary of relevant articles, as well as the Brakke Consulting Viewpoint on the news and major industry meetings. The newsletter is available at no charge to individuals involved in the animal health industry.
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