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Animal Health News & Notes for March 2, 2007 3/2/2007

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Brakke Consulting's
Animal Health News & Notes for March 2, 2007
Copyright © Brakke Consulting, Inc.
Editor: Lynn Fondon, DVM, MBA
earnings news
Del Monte
Sanderson Farms
other news
Fort Dodge
Since 1986 Brakke Consulting, Inc. has successfully assisted many clients in acquiring exceptional employees at all levels, in the many departments of animal health, pet, veterinary and specialty chemical companies. We pre-qualify candidates, allowing clients to choose from a few of the best applicants for a position.  Our approach increases the efficiency and effectiveness of the Human Resources Departments of client companies. Visit our website at www.BrakkeConsulting.com for more information.
> Alpharma reported results for the year 2006. Animal health revenues were $347 million, a 7% increase compared to 2005. (PRNewswire)
>  Biopure Corporation announced its financial results for the first fiscal quarter ended January 31, 2007. Total sales of the company's veterinary product Oxyglobin in the first quarter of 2007 were $444,000, up from $341,000 in the first quarter of fiscal 2006 due to higher unit sales and a higher average selling price. (company website)  
> Del Monte Foods reported net sales for the third quarter of fiscal 2007 ended January 28. Pet Products net sales were $356 million, an increase of 57% over net sales of $227 million in the prior year period. The increase was almost entirely driven by the Meow Mix and Milk-Bone acquisitions. (company website)
> PetSmart, Inc. reported $4.23 billion in net sales in fiscal year 2006, up from $3.76 billion in net sales a year ago. Comparable store sales grew 5.0% in 2006.  Net income for the full fiscal year 2006 was $185.1 million, compared with fiscal 2005 net income of $182.5 million. (Business Wire)
> Smithfield Foods, Inc. announced that income from continuing operations for the third quarter of fiscal 2007 ended January 28 was $60.4 million, versus income from continuing operations last year of $75.0 million. Sales were $3.3 billion versus $2.9 billion a year ago. (company website)
> Sanderson Farms Inc. reported results for the three months ended Jan. 31 that it narrowed its fiscal first-quarter loss on improved poultry prices.  The company reported a loss of ($2.8 million) compared with a loss of ($8.6 million) in the same quarter last year. The company was negatively impacted in the same period last year due to Hurricane Katrina. Sales were up 24% to $293 million from $236 million in the year-earlier period. (meating place) 
> Pfizer Animal Health announced the FDA has approved Cerenia (maropitant citrate), the first medication to prevent and treat acute vomiting in dogs. This first-in-class drug has been proven to be a safe and effective medication that veterinarians can use to control emesis (vomiting), quickly and effectively, regardless of the cause, including motion sickness.  Cerenia is administered once daily, and Cerenia starts to work within one hour of administration. Available in both injectable and tablet formulations, Cerenia will be available by prescription only from veterinarians in the summer 2007. (PRNewswire)  
> Vivalis announced that it has granted Fort Dodge Animal Health rights to the embryonic stem cell derived ebx cell lines to evaluate ebx cells for the production of viral animal vaccines. Terms of the agreement were not disclosed. (companynewsgroup.com)
> PetSmart announced its plans to exit the State Line Tack horse business, which includes 180 departments inside PetSmart stores, and to reallocate the space for higher-margin pet products or PetsHotels. It is also exploring strategic opportunities for its State Line Tack horse catalog and e-commerce operation. The State Line Tack horse business represented about two percent of PetSmart's sales in 2006. (Business Wire) 
>  Smithfield Foods Inc. announced that it has joined the Chicago Climate Exchange (CCX), a voluntary but legally binding greenhouse gas emissions reduction and trading platform, the only one of the kind in the world. In joining, Smithfield committed itself to cut its greenhouse gas emissions in the U.S. by at least 6% by 2010, according to the announcement. The company said it is the only U.S. company to have made such a legally binding commitment. (Feedstuffs online) 
> US - EHV  Thirteen facilities in Virginia and Maryland have been placed under quarantine due to an outbreak of equine herpesvirus (EHV-1) believed to have originated in Leesburg, Virginia.  Virginia state officials imposed a quarantine on the Leesburg facility after three horses demonstrated signs of the neurological form of EHV-1. (AnimalNet - Thoroughbred Times) 
> US - CANINE LIVER TEST  Cornell University's College of Veterinary Medicine announced that it has developed reliable protein tests that accurately indicate a dog's liver failure caused by aflatoxins. The Protein C Activity Assay, which is a human protein test that was modified by researchers at Cornell over the past three years for use on animals, is one of several tests Cornell veterinarians have been using to detect liver damage in seriously poisoned dogs. The tests are accurate and the results are available within 24 hours. (Dogflu.ca)
> US - CATTLE PLACEMENTS DOWN   Severe weather and rising feed costs impacted U.S. cattle inventory in January, accounting for a significant decrease in the number of cattle placed in feedlots during the same period, according to data from USDA and the American Farm Bureau. On a monthly basis, Feb. 1 marked the first time cattle and calves on feed for slaughter in U.S. feedlots with capacity of 1,000 head or more were below year-earlier levels since October 2005. The 3% drop was the largest year-over-year fall since 2003. Placements in feedlots during January totaled 1.69 million, 23% below 2006 and 10% below 2005. Net placements were 1.59 million head, which is the second-lowest placement for the month of January since USDA began keeping cattle-on-feed records in 1996. (Meating Place)
> EU - VETERINARY RESPONSE TEAM   The European Commission is setting up a veterinary expert team that could be deployed at short notice to respond to animal disease outbreaks such as bird flu in Europe or elsewhere. An EU panel of national veterinary experts approved the plan, allowing the commission to go ahead and draft a list of team members from across the EU. Experts will be drawn from the fields of laboratory testing, veterinary, virology, wildlife, risk management and other areas to be ready to move within 24 to 36 hours to affected areas. (TheHorse.com)
The latest company reports for 2006 continue to paint the picture that it was a great year in the companion animal area.  The positive results are across the board at manufacturer, distributor and retailer/veterinary clinic.  It was also a reasonable year for the food animal sector.  We’re now starting to observe some softness in the food animal area highlighted by the reduced number of cattle placed on feed in January.  As 23% drop in placements is significant if this continues for a few more months.  There does not appear to be a reduction in the need for corn for ethanol so we’d expect corn prices to remain high in the near future, impacting animal protein production areas.
As we commented in our Industry Overviews, the financial firms have discovered animal health.  This is positive for everyone involved in the industry and offers some extraordinary selling opportunities for those firms desiring to take some or all of the equity out of their business.  It’s a great time to be a seller!!  If you need assistance give us a call.
Have a great weekend!! 
Ron Brakke
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