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Animal Health News & Notes for May 11, 2007 5/11/2007

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Brakke Consulting's
Animal Health News & Notes for May 11, 2007

Copyright © Brakke Consulting, Inc.
 
Editor: Lynn Fondon, DVM, MBA
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IN THE NEWS:
 
earnings news
Bayer
Central Garden & Pet
Digital Angel
Heska
Provimi
Spectrum Brands
 
other news
AgriLabs
Boehringer Ingelheim Vetmedica
Electronic ID Devices
Healthy Pet
Huvepharma
IDEXX
Intervet
J. Houle & Fils
Merial (Huvepharma)
Merial (Circovac)
Premium Standard Farms
Smithfield
VCA Antech
WestfaliaSurge
 
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BRAKKE CONSULTING, INC.
2007 INDUSTRY OVERVIEW AND MID-YEAR UPDATE
AT THE AVMA ANNUAL CONVENTION
JULY 16, 2007
WASHINGTON, DC
 
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, call Jane Morgan in the Dallas office at 972-243-4033 or email jmorgan@brakkeconsulting.com .
 
www.BrakkeConsulting.com
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COMPANY EARNINGS RELEASES
 
> Bayer reported results for the first quarter of 2006.  Sales of the animal health division rose by 4.5% to EUR 230 million ($307 million).  The increase was due primarily to the performance of the Advantage product line.  (company website) 
 
> Heska Corporation reported financial results for its first quarter ended March 31, 2007.  Total revenues were $22.7 million, up 30% from the first quarter of 2006. Net income for the quarter was $2.4 million, compared to a net loss of ($239,000) in the first quarter of 2006. (PRNewswire)
 
> Central Garden & Pet Company announced results for its second quarter ended March 31, 2007. Net sales for the Pet Products segment were $230 million, an increase of 23% from $187 million in the comparable fiscal 2006 period. Recent acquisitions contributed $30 million. (company website)
 
> Spectrum Brands, Inc. announced results for the quarter ended April 1, 2007.  Global Pet Supplies net sales were $143 million versus $138 million in the prior year. Companion animal product sales grew 12.5%, while global aquatics sales were flat as compared with last year. (company website)
 
> Digital Angel Corporation announced financial results for its first quarter ended March 31, 2007. Revenue for the first quarter of 2007 was $16.0 million and the net loss was ($3.5 million), compared to revenue of $15.8 million and a net loss of ($0.6 million) in the first quarter of 2006. Animal applications revenue decreased by $1.2 million, due primarily to decreases in the livestock E-tag and fish and wildlife revenues. (company website)
 
>  The Provimi Group announced its turnover for the first quarter of 2007. Sales amounted to EUR 479 million ($638 million), an increase of 14% compared to the same period of 2006.  The net impact of acquisitions and divestments increased sales by EUR 21.1 million. Like-for-like sales increased by 11.8%. (company website)

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COMPANY NEWS RELEASES
 
> Merial and Huvepharma, Inc. announced that Merial has sold its St. Louis blending facility and rights to certain anticoccidial products to Huvepharma.  In addition to the physical facilities, the two companies have also reached agreement for transfer of marketing rights for a number of products manufactured at the site, which are mainly anticoccidials for use in poultry: Amprol (amprolium) in various formulations; Amprol Plus (amprolium/ethopabate); Coyden (clopidol); and Nicarb (nicarbazin).  As part of the agreement, Huvepharma will also supply Merial with certain cattle anticoccidial products, which are also manufactured at the site. These products bear the Corid (amprolium) trademark.  The sale was effective April 27, 2007.  Financial details were not disclosed. (PRNewswire) 
 
> The US Animal and Plant Health Inspection Service has approved a duration of immunity claim for Boehringer Ingelheim Vetmedica Inc.'s Ingelvac CircoFLEX of at least four months for porcine circovirus type 2. PCV2 is a primary pathogen associated with porcine circovirus associated diseases.  It is administered as a single-dose to pigs 3 weeks of age or older. (Pork Alert) 
 
> IDEXX announced the introduction of the Coag Dx Analyzer to its Vetlab Suite products, to help veterinarians diagnose clotting disorders in companion animals.  The Coag Dx provides immediate results for prothrombin time (PT) and activated partial thromboplastin time (APTT).  The company expects to launch the analyzer in the fourth quarter of 2007; the Coag Dx PT and APTT cartridges will be launched this month through a partnership with International Technidyne Corporation and are compatible with the Synbiotics SCA2000 analyzer as well as the IDEXX analyzer. (company website) 
 
> VCA Antech, Inc. announced the signing of a definitive merger agreement with Healthy Pet Corporation. Under the agreement, VCA Antech, Inc. will acquire Healthy Pet for $152.9 million (less assumed debt and subject to adjustment for working capital items) to be paid in cash. Healthy Pet operates 44 animal hospitals with annual revenue of approximately $80 million. On completion of the merger, the combined companies will operate more than 430 animal hospitals in 38 states. (company press release) 
 
> The U.S. Department of Justice cleared the merger of Premium Standard Farms Inc. and Smithfield Foods Inc. which will give Smithfield control of 20% of all hogs produced and 30% of all hogs processed in the country. The purchase price was approximately $800 million, including the assumption of PSF's approximately $125 million of net debt. (Feedstuffs, Meating Place)
 
> WestfaliaSurge announced the acquisition of J. Houle & Fils Inc., the leading manufacturer of livestock manure-handling equipment in North America. WestfaliaSurge is dedicated to growing the equipment product line globally out of the Houle headquarters and manufacturing facility in Quebec, Canada. Houle will operate independently as a sister company to WestfaliaSurge, Inc. Financial terms were not disclosed. (company press release)
 
> AgriLabs announced the launch of new TriForce Canine Squeeze-on and TriForce Feline Squeeze-on flea and tick products for dogs and cats. Each application of TriForce Canine contains cyphenothrin and Nylar, offering five-way protection, killing adult fleas, flea eggs, flea larvae, ticks and mosquitoes.  TriForce Feline contains etofenprox and Nylar. (company press release)
 
> American Kennel Club’s Companion Animal Recovery (AKC CAR) and Electronic ID Devices, Ltd. have entered a distribution agreement, where AKC CAR has become the exclusive distributor of Ttovan microchips in the US companion animal market. The new AKC Companion Animal Recovery ID System microchips are part of the American standard, complying with the installed reader base used for identifying lost microchipped animals in most animal shelters throughout the US. (association website)
 
> EU  Merial announced that the European Medicines Agency Committee for Medicinal Products for Veterinary Use has recommended that the company's  PCV2 vaccine Circovac be granted marketing authorization.  Circovac has been licensed in the US for some time.  The vaccine may be available in Britain within three to six months. (ThePigSite) 
 
> EU  Intervet announced it received EU marketing approval for its avian influenza vaccine Nobilis Influenza H7N1. Last year the European Commission approved Nobilis Influenza H5N2. Intervet now markets AI vaccines, including H5N2, H5N6, H7N1, H7N7 and H9N2, to protect chickens and ducks against many different strains of bird flu. (company press release) 
 
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ANIMAL HEALTH NEWS
 
> CHINA - SECOND CHEMICAL IN PET FOOD  A second industrial chemical that regulators have found in contaminated pet food in the US may also have been intentionally added to animal feed by producers seeking larger profits. Three Chinese chemical makers said that animal feed producers often purchase, or seek to purchase, the chemical cyanuric acid from their factories to blend into animal feed.  The chemical producers said it was common knowledge that for years cyanuric acid had been used in animal and fish feed.  Two of the chemical makers said feed producers used it because it was high in nitrogen, enabling feed producers to lift the protein reading of the feed artificially. Scientists studying the pet food deaths say the combination of melamine and cyanuric acid, mixed together with perhaps some other related compounds, may have created conditions that formed crystals in the kidneys of pets and led to kidney failure. (International Herald Tribune)
 
> US - FOOD ANIMAL VETERINARIAN INCENTIVE   A Wisconsin state lawmaker is proposing legislation that provides loan forgiveness of up to $50,000 for Wisconsin veterinary students who spend at least six years treating food animals in the state after they graduate.  The legislation is currently being considered by an Assembly committee. Companion legislation has been introduced in the Senate.  (Wisconsin Radio Network)
 
> US - FOOD INSPECTION   The FDA sent a letter to food manufacturers reminding them of their legal responsibility to ensure the safety of food ingredients for human consumption.  In addition to encouraging manufacturers to make sure they have procedures in place that ensure the safety of the ingredients in their products, the letter suggested verifying that their suppliers also have such procedures in place. The FDA also issued a protein ingredient surveillance assignment on May 1, 2007 during which they, with state agencies, will perform inspections of various food and feed facilities and collect and test for the presence of melamine a variety of protein ingredients, and finished products commonly found in the US food and feed supplies. (Wattnet Meatnews)
 
>  JAPAN - BSE RESEARCH   Experiments on mice showed that BSE in two cattle aged 21 and 23 months old was not contagious.  The results of the tests, contained in an interim report compiled by a health ministry commissioned research group, might lead to a conclusion that humans can safely eat meat from cattle up to 23 months old, even if they were infected with BSE. The latest finding could also influence Japan's conditions on beef imports from the US; Japan currently limits US beef imports to cattle 20 months old or younger when slaughtered. (Asahi.com)
 
> US - BSE VACCINE   Researchers at New York University's School of Medicine claim they have developed a vaccine that protects mice from a brain condition similar to BSE in cattle, scrapie in sheep, and chronic wasting disease in deer, which are caused by infectious prion proteins. The vaccine stimulates the immune system of mice by attaching prion proteins to a genetically modified strain of salmonella. The vaccine either prevented or significantly delayed the onset of prion disease symptoms in the mice. (Beef Cow-Calf Weekly)
 
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BRAKKE CONSULTING VIEWPOINT
 
I hope you noted earlier in the newsletter that we'll be conducting a mid-year animal health industry overview at this year's AVMA Annual Convention.  We've had a number of individuals and firms suggest this for the benefit of their 2008 planning process and we hope you'll consider joining us in Washington, DC.
 
Also, the announcement of a second chemical being found in contaminated pet food is not good news.  Hopefully this whole episode will encourage companies to be more diligent in their ingredient purchasing and quality control programs.  It's not always the best policy to go for the lowest price!
 
Have a great weekend.
 
Ron Brakke
 
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Brakke Consulting, Inc.
2735 Villa Creek, Suite 140
Dallas, TX  75234    USA