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Animal Health News & Notes for May 4, 2007 5/4/2007

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Brakke Consulting's
Animal Health News & Notes for May 4, 2007
Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM, MBA
earnings news
Animal Health International
Pilgrim's Pride
other news
Benchmark Biolabs
Biolex Therapeutics
Drs. Foster and Smith
DVM Pharmaceuticals
Menu Foods (lawsuit)
Menu Foods (recall)
PerOs Systems Technologies
State Line Tack
Swift & Co.
Veterinary Products Laboratories
>  Alpharma Inc. announced results for the first quarter of 2007.  First quarter Animal Health revenues increased 3% to $83.8 million, compared to $81.7 million in 2006. (PRNewswire) 
>  Bioniche Life Sciences Inc. released third quarter results for the period ended March 31, 2007.  Total revenues for the third quarter decreased by 7% to C$6.4 million (US$5.5 million) as compared to C$6.9 million for the same period last year. This decrease reflects the timing of sales for two of the Company's reproductive products. Year-to-date, total revenues reached C$20.1 million (US$17.4 million) as compared to C$19.1 million reported in the same period last year, a 5% increase. Net loss from continuing operations for the quarter totaled C$(4.5) million, compared with $(3.3) million recorded in the same period last year. Looking at revenues in the animal health business, an 8% increase was experienced on a year-to-date basis, with revenues reaching C$19.6 million (US$17.4 million) as compared to C$18.2 million in the same period last year. (PRNewswire)
> Animal Health International, Inc. reported results for the fiscal third quarter ended March 31, 2007.  Net sales increased 10%, to $154 million for the quarter, from $140 million for the same quarter last year. Net income for the third quarter was $0.1 million, down from the third quarter last year net income of $1.1 million. An increase in operating income, offset by the write-off of unamortized debt issue costs, prepayment penalties and higher interest expense accounted for the decline. (PR Newswire)
> Evialis reported results for the first quarter of 2007. Sales turnover was EUR 178 million ($237 million), compared to turnover of EUR 168 million in the first quarter of 2006. (Business Wire)
> Tyson Foods Inc. announced that earnings for its fiscal second quarter were $68 million, compared to a $127 million loss in the same period last year, citing improved margins related to cost-cutting. The company reported that revenues were $6.5 billion for the three months ended March 31, up slightly from $6.3 billion last year. (Meating Place)
> Pilgrim's Pride Corp. announced results for its fiscal second-quarter ended March 31. The company posted a loss of $40.1 million for the quarter, compared with a loss of ($32 million) last year. Sales were up 58%, reaching $1.99 billion. (Meating Place) 
> Seaboard Corp. announced that first-quarter earnings were $49.4 million, down 4% from last year's earnings of $51.5 million. Sales were $729 million, a 15% increase from $636 million in the year-earlier period. Operating income in the pork segment was $20.9 million, down 30.5%, from $30.1 million last year. (Meating Place)
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> Biolex Therapeutics announced a strategic collaboration with Merial Limited for the development of animal health products using Biolex's patented LEX System. The collaboration will leverage key advantages of the LEX System to provide Merial with high quality vaccine antigens. (MarketWire)
>  The FDA amended the animal drug regulations to reflect approval of a new animal drug application (NADA) filed by Schering-Plough Animal Health Corp.  The NADA provides for the veterinary prescription use of diclazuril oral pellets in horses for the treatment of equine protozoal myeloencephalitis.  (AnimalNet - Federal Register)
> Abbott Animal Health announced the availability of five new TRANSIVA IV sets and accessories designed specifically for the needs of veterinarians. Some new features include: longer sets that allow for the set and injection port to extend outside a kennel and minimize the technician’s need to reach into the kennel to administer drugs; an extension set with an injection port for easy dosing close to the patient; and non-DEHP tubing that is safe for use with blood, chemotherapy agents, and lipid products. (company press release) 
> DVM Pharmaceuticals introduced GastriCalm flavored tablets for dogs.  GastriCalm tablets contain a patented chelate of zinc and L-carnosine with vitamin E, which works to strengthen the stomach lining's natural defenses and promote normal, healthy gastric function.  (DVM Newsmagazine)
> Veterinary Products Laboratories announced the availability of specialized sutures for ophthalmic surgery.  These swaged-on suture and needle combinations come in a variety of suture sizes and are ideal for plastic and ocular surgery, including the anterior segment surgeries such as: cataract, glaucoma, keratoplasty and iris. (company press release) 
> PetSmart, Inc.  announced the sale of its State Line Tack equine assets to PetsUnited, a privately-held holding company for a web-based multi-marketer of pet and equine products, including dog.com, fish.com and horse.com. The sale includes the State Line Tack brand, inventory, customer lists and certain assets. Terms of the deal were not disclosed. (Business Wire)
> Mars, Inc. announced the signing of a definitive agreement to acquire the global pet food operations of Nutro Products Inc.  Nutro will operate as a stand-alone organization within the Mars family of companies and will maintain its commitment to the pet specialty channel. Terms of the deal were not disclosed.  (Pets International)
> Menu Foods Midwest Corp, a Menu Foods Ltd affiliate, announced it is suing ChemNutra Inc, seeking damages in excess of $75,000 and asking the company to pay costs associated with the recall of dog and cat food.  The lawsuit accuses ChemNutra of breach of contract and breach of implied warranties about the safety of the wheat gluten and its fitness for use in pet foods after melamine was found in the wheat gluten. (AnimalNet - AP)  
> Menu Foods announced an expansion of its pet food recall because of possible cross-contamination between melamine-tainted products and other foods made in the same period.  The expansion includes cuts and gravy pet food, as well as other products that were not made with the contaminated wheat gluten, but were manufactured during the period the tainted wheat gluten was used.  (AnimalNet - AP)
> PerOs Systems Technologies Inc, developer of the oral drug delivery platform Oralject, and Benchmark Biolabs Inc,  have teamed up to make oral vaccination a reality. PerOs will focus the initial commercial effort of its Oralject technology on meeting the demands of the rapidly growing aquaculture industry. (company press release) 
>  InVivo announced plans to acquire a 38.49% stake in Evialis held by French bank BNP Paribas for 35.04 euros a share. It will then make an offer for the rest of Evialis' shares at the same price.  InVivo said it aimed to keep Evialis shares listed on the stock market. Evialis recorded revenues of EUR 650 million ($858 million) in 2006. (Reuters) 
> Optibrand announced a partnership with Swift & Company to provide a traceability program for Japanese distributors and retailers that offers complete traceability information available via a barcode on the package of US beef.  Consumers can retrieve the product's supply chain history, from farm to retail shelf, by scanning the barcode with a cell phone or accessing the information online. (AnimalNet)
> e-tailer Neeps Incorporated, has announced the sale of its pet supply business to Drs. Foster and Smith. Neeps Inc. was parent to one of the first e-commerce sites on the Internet, TheFerretStore.com, which was launched in 1994.  In 2001, the product line was expanded to include supplies for dogs, cats and small animals and over the years additional websites were launched including ActiveK9.com, PetCareCentral.com, RabbitCentral.com and CritterStore.com along with a wholesale division, which were included in the sale. Financial terms were not disclosed. (Pets International)
> UK   Virbac announced the UK launch of Cortavance, a new anti-inflammatory skin treatment for dogs.  According to the company, Cortavance is the only veterinary dermosteroid effective in the skin and nowhere else. The company has an EU-wide marketing authorization for the product. Cortavance contains the prodrug ingredient hydrocortisone aceponate (HCA). HCA has been used in human medicine for some time, but according to the company this is the first time it has been given a veterinary application. (Animal Pharm)
> CANADA - BSE  The Canadian Food Inspection Agency (CFIA) confirmed the diagnosis of BSE in a mature dairy cow from British Columbia, marking the country's 10th case. The animal's carcass is under CFIA control, and no part of it entered the human food or animal feed systems. Preliminary information indicates that the age of the animal (66 months) falls well within the age range of previous cases detected in Canada and is consistent with the recognized average incubation period of the disease. (Feedstuffs)
> US - CONTAMINATED POULTRY FEED   The USDA and the FDA have learned that byproducts from pet food manufactured with contaminated wheat gluten imported from China have been used in chicken feed on some farms in the state of Indiana. At this time, USDA and FDA said the investigation indicates that approximately 30 broiler and eight breeder poultry farms in Indiana received contaminated feed in early February and fed it to poultry within days of receiving it. All of the broilers believed to have been fed contaminated product have since been processed. The breeders fed the contaminated product are under voluntary hold by the flock owners. Because there is no evidence of harm to humans associated with consumption of chicken fed the contaminated product, no recall of poultry products processed from these animals is being issued. (Feedstuffs)
> US - DAIRY PROTESTS  The Professional Dairy Managers of Pennsylvania (PDMP) and the Northeast Dairy Producers Assn. (NEDPA) sent a joint letter to the FDA communicating the industry's concerns about misleading advertising of dairy products. The letter was written on behalf of more than 350 members in the two organizations that collectively own more than 130,000 cows on farms of all sizes.  The organizations cite the advertising of recombinant bovine somatotropin (rbST) free milk as an example of how labeling can mislead public perception and "erode consumer confidence in milk and dairy products in general."  This joint letter "echoes the requests" of the others in the industry in requesting that FDA enforce current laws regulating the labeling and promotional practices for dairy products. The complete text of the letter is available at http://www.pdmp.org/Issue_NEDPA_Labeling_Appeal.htm . (Feedstuffs)
> CHINA - COMPANIES ADMIT MELAMINE USE   Chinese feed manufacturers have admitted that they have "secretly supplemented their feed" with melamine, which looks like protein in analytical tests even though it does not provide any nutritional benefits and may even be toxic. One general manager said that since there is no specific regulation in China against using melamine in feed ingredients, "everyone's using it." Inspectors with the FDA have been granted permission to go to China to conduct inspections of facilities tied to the current pet food recall in the US. (Feedstuffs)
> US - BEAK AND FEATHER VACCINE   University of Georgia scientists are finalizing development of a new vaccine that could effectively eliminate in companion bird populations a debilitating and often fatal viral disease called psittacine beak and feather disease.  The virus has decimated some free-ranging populations of cockatoos and has historically been a problem for companion-bird lovers from around the globe. The virus is not contagious to humans or other pets. With laboratory work now successfully completed, the University of Georgia Research Foundation has begun the licensing and registration process for the vaccine. PetSmart donated $300,000 in an undesignated gift to the College of Veterinary Medicine to be used for research. (company website)
There are several stories this week related to new product or technology introductions or developments.  If the industry is going to continue to grow revenues at double-digit rates, we need a steady flow of new innovative value-added products.  We continue to urge companies to invest in a mix of short- and long-range technologies that will improve the health of animals and maintain a safe food supply.
We find it encouraging that producer groups and others are asking the FDA and FTC to become involved in the deceptive advertising related to milk and other animal products.  The recent pet food recall and the confirmation by the FDA that contamination has even moved into some foods for human consumption is not good news!  The feeding frenzy of the press will no doubt continue for the next few weeks.  The industry need to continue to participate in the dialog and solutions to assure consumers that animal protein and milk is safe.
Have a great weekend.
Ron Brakke
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