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Animal Health News & Notes for May 18, 2007 5/18/2007

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Brakke Consulting's
Animal Health News & Notes for May 18, 2007

Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM, MBA
earnings news
PetMed Express
Virbac SA
other news
Accura Pharma
Digital Angel
Milburn Equine
Royal Canin
T-Cyte Therapeutics
JULY 16, 2007
For the first time, Brakke Consulting will be presenting our 2007 Industry Overview at the American Veterinary Medical Association Annual Convention.  The Mid-Year update will include current information on the leading animal health companies, observations of successes and challenges for new product and company entries into the marketplace, and estimates for year end 2007.  We’ll have a special section on our expectations for the market place in 2008 for your planning purposes.  We would encourage you to have your senior marketing and sales management participate in this Mid-Year update.
Early registration is $325 for the first company attendee and $300 for each additional attendee from the same company at the same presentation.  To register online, visit our website at http://www.brakkeconsulting.com/2007AVMA.html.  Or call Jane Morgan in the Dallas office at 972-243-4033 or email jmorgan@brakkeconsulting.com .
> Virbac SA reported results for the first quarter of 2007.  Net sales in the quarter amounted to EUR 104.6 million ($139 million), a 14.6% increase compared with 2006, and 12.3% growth at constant exchange rates. (Animal Pharm)  
> PetSmart, Inc. reported net income of $106.7 million for the first fiscal quarter of 2007. That compares with net income of $41.8 million for the first quarter of fiscal 2006. During the first quarter of 2007, the company recorded a net benefit of approximately $64 million from the sale of a portion of its shares in MMI Holdings, Inc. (MMI), the third-party operator of its in-store Banfield veterinary hospitals. Net sales for the first quarter of 2007 were $1.11 billion, compared to $1.01 billion for the same period in 2006, and comparable store sales grew 4% in the first quarter. Pet services sales were $107.3 million, up 18% from the same period last year. (company website)
> PetMed Express, Inc. announced its financial results for the fiscal year ended March 31, 2007. Net sales for the year were $162 million, compared to $138 million for the year ended March 31, 2006, an increase of 18%. Net income was $14.4 million, compared to net income of $12.1 million, for the year ended March 31, 2006, an increase to net income of 20%. (Business Wire)
> Novozymes reported results for the first quarter of 2007.   Feed enzyme sales in the first quarter of 2007 rose by 5% to DKK 179 million ($32 million) from DKK 171 million in the first quarter of 2006. (company website)  
> Ridley Inc. reported results for its 2007 third quarter ended March 31, 2007.  Revenues for the quarter were $137 million, up 5% compared to the comparable period in the prior year.  Net earnings were $3.1 million compared to $3.9 million in the prior year comparable period. (company website) 
> Biopure Corporation announced its financial results for the second fiscal quarter ended April 30, 2007. For the quarter, the company reported a net loss of ($6.2 million), compared with a net loss of ($7.1 million) for the corresponding period in 2006. Total revenues for the second quarter of 2007 were $619,000, including $500,000 from sales of the company's veterinary product Oxyglobin. (company website)  
> Hartville Group, Inc. announced financial results for the Company’s first quarter of 2007. Gross revenue of $1.9 million was 39% higher than the $1.3 million of gross revenue for the comparative period of 2006. The net loss for the quarter was ($1.8 million) compared to a net loss of ($2.5 million) for the comparative period of 2006. The number of pets insured at March 31, 2007, was 40,159. (Business Wire)
> Merial and Scynexis announced an expansion of the scope of a collaboration agreement originated in 2005.  The new multi-year agreement will significantly increase the capacity of Scynexis' technologically advanced biological screening, bioanalytical, ADMET (cell-based assays), and medicinal chemistry efforts directed towards Merial projects. Through the agreement, Merial hopes to optimize novel active compounds that will form the basis of new products. (Animal Pharm)
>  Digital Angel Corporation announced it entered into a non-exclusive distribution agreement with Milburn Equine, a division of Webster Veterinary Supply. Under the agreement, Milburn will carry Digital Angel’s state-of-the-industry equine ID microchip and equine ID microchip with Bio-Thermo. (Business Wire)
> Dechra Pharmaceuticals PLC announced it paid $5 million for a long-term trademark license and supply deal with Pharmaderm Animal Health, a subsidiary of Altana Inc.  Dechra will have exclusive marketing and distribution rights for a range of veterinary licensed products and the opportunity to develop new veterinary licenses for both North America and Europe. (Hemscott.com)  
> Mars announced that, in a global initiative to unify all businesses of Mars Inc. under a single corporate brand name, all Masterfoods company names will in the coming weeks and months be changed into Mars. (Pets International)
> Royal Canin USA recently announced the voluntary nationwide recall of eight Sensible Choice dry dog food products and seven Kasco dry dog and cat food products. This announcement was based on the company's identification of trace amounts of a melamine derivative from tainted Chinese rice protein concentrate provided to the company by domestic ingredient supplier Cereal Byproducts. (Petfood Industry e-news)
> T-Cyte Therapeutics announced it has received a conditional license to manufacture and distribute Lymphocyte T-Cell Immunomodulator as an aid in the treatment of feline leukemia virus and/or feline immunodeficiency virus infections in cats while additional data is accumulated to support full approval.  (company press release)
> Innolytics, LLC announced that the U.S. Environmental Protection Agency (EPA) has granted registration for OvoControl P for pigeons.  The company has developed an innovative new product which effectively controls egg hatchability in pigeons, essentially representing non-hormonal oral contraception for birds. The effect is fully reversible and care has been taken to develop a feeding system that limits exposure to non-target species. (company press release) 
> Affymetrix announced the Genotyping Bovine 25K SNP (single nucleotide polymorphism) Service, which includes a new assay panel that has information on more than 15 different beef and dairy breeds. According to the company, the panel will enable scientists to have a better understanding of the genetic markers that correlate particular performance and development traits. (Animal Pharm)
> Accura Pharma announced it intends to acquire Tridelta to create an integrated veterinary pharmaceuticals and diagnostics company. The acquisition, for which Accura will pay GBP 2.2m ($4.4m), plus a further GBP 848,262 ($1.7 million) if all share options are exercised, is subject to shareholder approval of a recommended offer. Tridelta has developed specific animal applications, notably for diagnosing bovine mastitis, from established human medical diagnostic technology, based on acute phase proteins. (Animal Pharm) 
> EU   Pfizer announced that Slentrol (dirlotapide) has been approved for use in the EU to help manage overweight and obesity in adult dogs as part of overall weight management program that includes appropriate dietary changes and exercise. (Animal Pharm)
> US - TRICHINELLA PROGRAM   The USDA's Animal & Plant Health Inspection Service (APHIS) has proposed to establish a voluntary trichinae certification program for US pork.  Trichinella spiralis is rare in the US and is not currently required as part of a testing program in the US. The European Union and other overseas markets, however, require testing for all imports of fresh pork and fresh pork products. The proposed voluntary certification program for the US would ensure that American producers standardize their protocols and offer overseas markets a USDA certification as to the T. spiralis protections in place at US farms without having to test every animal and every product. (Feedstuffs)
> US - BST   Southeast Milk, Inc., the largest dairy cooperative based in the Southeast, announced it will no longer market milk from cows treated with recombinant bovine somatotropin as of September 1. The decision was made last week upon learning that three of their customers want milk from cows not treated with rBST.  Co-op members will be asked to sign affidavits that they are not using rBST. Regarding members who want to continue using rBST, Southeast Milk says it will make "every effort" to find a plant to receive their milk, although they will have to pay a handling charge, including transportation. (Dairy Alert)
> JAPAN - BEEF IMPORTS   The Japanese agriculture minister rejected a US request to eliminate a cattle age limit on beef imports from the US at a meeting with the US Agriculture Secretary. The US wanted Japan to accept an expected decision by the World Organization for Animal Health (OIE) to allow the US to export beef irrespective of cattle age. Japan has considered beef import conditions in line with its own scientific procedures, indicating the OIE decision would not automatically lead Japan to change the conditions. (Drovers Alert)
>  SPAIN - CANINE RESEARCH MODEL   Scientists from UNIVET, a spin-off of the Autonomous University of Barcelona, and animal nutrition company Affinity Petcare have developed an artificial cellular model that reproduces the characteristics of a dog's skin.  The model is expected to improve research in skin biology in dogs without the need for using live animals. (Animal Pharm)
The news this week covers a number of licensing, research or marketing agreements.  Several of those mentioned are not well known companies in animal health, but are smaller technology or marketing companies seeking a position in the growing market.  The industry needs new companies and technologies to drive growth. 
One observation on the earnings releases reported this week is that those companies involved in the companion animal business had double-digit growth, while those serving the food animal sector are struggling with growth under 10%.  We believe this trend will continue for the balance of the year.
Have a great weekend.
Ron Brakke
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