» 2003

Animal Health News & Notes for August 1, 2003 8/1/2003

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Brakke Consulting’s
Animal Health News & Notes for August 1, 2003
Copyright © Brakke Consulting, Inc.
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COMPANY EARNINGS RELEASES

>  Aventis reported results for the second quarter 2003 for its animal health division Merial.  Sales by the Merial joint venture were 413 million euros ($472 million) in the second quarter, down 3% from the year-ago period on an activity basis. This figure includes Merial’s poultry genetics business. (company website)

>  Heska reported  financial results for the second quarter of 2003.  Total revenues for the second quarter were $14.8 million, compared to $12.2 million in the second quarter of 2002.  Quarterly net loss decreased to ($7.4 million) from a net loss of ($7.8 million) in the second quarter of 2002. (company press release)

>  Tyson Foods reported results for the third fiscal quarter ended June 28, 2003.  Third quarter sales were $6.3 billion compared to $5.9 billion for the same period last year.  Sales in the beef segment for the third quarter were $3.15 billion compared to $2.7 billion in 2002.  Sales in the chicken segment were $1.88 billion compared to $1.86 billion in 2002.  Sales in the pork segment were $631 million compared to $552 million in 2002.  (Meating Place)

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NOW AVAILABLE!

VETERINARY DRUG COMPOUNDING STUDY
 
In the past year or two, the exhibit halls at veterinary conferences have seen a proliferation of veterinary compounding pharmacies.  In response to frequent questions about this topic, Brakke Consulting will be conducting a study of the phenomenon of veterinary compounding.  The study will answer questions such as
 
- what do veterinary compounders offer?
- what types of companies are offering compounding services?
- how many and how big are they?
- how frequently are veterinarians using compounding services?
- are there differences in veterinary usage between equine and small animal practitioners?
- are veterinary compounders taking business away from traditional pharmaceutical manufacturers?
 
The study is available at a price of $3,250 and will begin shipping Monday, July 28.  For more information, please call 972-243-4033 or email info@brakkeconsulting.com .
 
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COMPANY NEWS RELEASES
 
>  Philipp Brothers Chemicals, Inc. has announced a change in the name of the company to Phibro Animal Health Corporation, a name that better reflects the company’s current business enterprises, as well its strategic direction. Animal health and nutrition represents two-thirds of the company’s business.  Phibro Animal Health has annual revenues in excess of $375 million with more than 1,200 employees, with facilities in 17 countries, serving customers in over 40 countries around the world. (AgPRonline)

>  The FDA amended the animal drug regulations to reflect approval of an abbreviated new animal drug application (ANADA) filed by Bioniche Animal Health USA, Inc. The ANADA provides for oral use of phenylbutazone paste in horses for relief of inflammatory conditions associated with the musculoskeletal system. (AnimalNet – Federal Register)

>  Bayer is highlighting a recent study that demonstrated that K9 Advantix is effective in preventing deer ticks from attaching to dogs.  Deer ticks are the main vector for Lyme disease.  The study showed that when dogs were exposed to adult deer ticks over a 90-day period, the dogs treated with K9 Advantix tested antibody-negative for Borrelia burgdorferi, while all the untreated dogs had produced antibodies.  (Veterinary Practice News)

>  Fort Dodge introduced a new initiative to help veterinarians educate pet owners about vaccination issues.  “Responsible Healthcare for Pets” includes a technical guide, a pet owner brochure, risk assessment forms, a poster and a wall plaque. (company press release)

>  Butler announced a new business platform designed for livestock veterinarians.  PharmLink allows a veterinarian to have products shipped directly to their livestock clients.  Producers are not permitted to place orders, and veterinarians set the selling price for the products.  When a veterinarian places an order, the products are shipped to the client with an unpriced packing slip for order verification.  The priced packing slip is sent to the ordering veterinarian, who can then review the order, add a markup and send the invoice to his or her client.  (company press release)

>  The European Commission has approved a proposed joint venture between BASF and Glon Sanders from France for the production of premixes for animal feed in France.
This merger does not raise any competition concerns on any of the markets considered. The joint venture will take the form of a newly created joint venture company, to be named BASF Nutrition Animale. (Wattnet Meatnews)

>  The Iowa Quality Beef plant opened last week in Tama, Iowa. The plant is a joint operation between the Iowa Quality Beef Supply Cooperative, with 900 producer members and 75% ownership, and the American Foods Group from Wisconsin, with 25% ownership. Initial production plans call for processing about 1,200 head per day including 600 fed beef-type cattle, 200 fed Holstein steers and 400 cows. (Drovers Alert)

>  The US Department of Labor announced a partnership with PETCO Animal Supplies, Inc., to help the company recruit and hire more than 800 pet groomers this year. The collaboration is part of the workforce investment system’s Partnerships for Jobs initiative. The Labor Department’s Employment and Training Administration created the Partnerships for Jobs initiative to ensure that large, national employers recognize the potential of local One-Stop Career Centers as a source of high quality employees. With plans to open 60 new stores, PETCO sought to expand its relationship with One-Stop Career Centers after working successfully with two San Diego centers to help fill pet grooming classes. (company press release)

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NAT’L CATTLEMENS BEEF ASSOCIATION CONVENTION
DALLAS, TEXAS

The National Cattlemen’s Beef Association held its summer conference in Dallas last week.  The attendance was good and the availability of those in leadership positions was excellent.   The latter may be the best reason to attend the summer conference.  And they were not afraid to discuss the most contentious issues facing the cattle industry:  COOL, BSE and governance of the NCBA itself.   From an animal health viewpoint, there were two positive notes.  First, the Canadians appear to have done a marvelous job of investigating their lone case of BSE and communicating the facts in a way that has inspired local, if not worldwide, confidence.  Nevertheless, their cattle industry is nearly in ruins and reflects the global nature of just about any industry.  Second, there was good news on pre-harvest methods to control E. coli 0157:H7.  The research was funded by producers and meat companies and reflects the new role of the food chain in animal health, much as we predicted as part of our strategic review in July of 1999.

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ANIMAL HEALTH NEWS
 
>  JAPAN   Effective August 1, Japan is implementing an emergency trade plan that will raise the tariffs on beef and pork imports.  Japan will raise the tariff on chilled beef to 50% from 38.5% after a jump in imports in the second quarter. The snapback provision, which Japanese officials said will last eight months, will not impact duties on imported frozen beef. Likewise, the Japanese Finance Ministry increased Japan's tariff on imported pork, raising the basic import price of one kilogram (2.2 pounds) of pork to $5.70 from $4.60. Under World Trade Organization guidelines, Japan is allowed to raise tariffs on imported beef if imports during a given quarter show a year-on-year increase of 17% or more. A Japanese trade official said imports for the April-June quarter rose 34%. (Meating Place)

>  US   A central Indiana school district is the first in the nation to approve the inclusion of USDA-purchased irradiated ground beef for its school lunch program, but it will likely be several years before its students sample the fare in their cafeteria.  At this point, there is not sufficient demand throughout the state for the state to order irradiated ground beef from USDA for service to Hoosier school children. The 2002 Farm Bill directs USDA not to prohibit the use of irradiation on foods purchased for the school lunch program. (Meating Place)

>  UK   The British government put forward plans for an emergency team of veterinarians to act in disease crises. The plans propose forming a new corps of private sector vets, able to join forces with the Government at short notice to fight outbreaks of animal disease. Members of the group would be contracted to do five days paid training each year. In return, they will need to commit themselves to be available in an emergency. Initially, the Department of Environment Food and Rural Affairs (Defra) will be looking to recruit around 100 vets to join this veterinary reserve. (Wattnet Meatnews)

>  US   Researchers at the University of Missouri are now able to test and grade the tenderness of beef.  Tenderness in beef is thought to be a result of calpain, a naturally occurring enzyme that breaks down muscle fibers in beef when it is refrigerated. The regulator of this enzyme is calpastatin and by measuring the quantity of calpastatin in a carcass with a sensor, the researchers have been able to predict meat tenderness. The researchers said the probe possibly could be used in commercial processing plants within a few years. (AnimalNet – Meatnews)

>  US  The Institute for Behavior Therapy, the oldest private cognitive behavioral therapy center in the US, recently opened the Pet Bereavement Center in New York City.  The center specializes in the treatment of bereavement related to the loss of a pet, providing an understanding environment to those whose grief is often trivialized. (Pet Business)

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BRAKKE CONSULTING ANNOUNCES
MULTIUSER STUDY ON
THE AQUACULTURE INDUSTRY

In 1997, Brakke Consulting developed an extensive report on the worldwide aquaculture business and the opportunities for animal health, nutrition, and investor companies in the next decade. We have just completed an all-new update of that report on the aquaculture market. 

The past six years has seen a great deal of change in the aquaculture business.  These changes and their implications for current and future suppliers are highlighted in the new 60-page report.  If you currently supply or have been considering supplying the aquaculture industry, you’ll find this report most useful and helpful in our planning process.  The opportunity continues to increase in value for participating companies.

The study is available immediately at a price of $3,000.  For more information on the report, please call 972-243-4033, or email info@brakkeconsulting.com .

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BRAKKE CONSULTING VIEWPOINT

This past week we completed and began shipping our Veterinary Drug Compounding Study. In reviewing the draft of the final report I thought there were some sections that we should call attention to for the good of the industry.  The following excerpts are from page 10 of the report.

One of the FDA's stated highest enforcement
priorities is the practice of using compounding
to make imitations of FDA-approved drugs from
bulk drugs.  AMDUCA states that "nothing in this
part [of the Act] shall be construed as permitting compounding from bulk drugs."  [Compliance Policy Guideline] 608.400 is more explicit and states that
"the Agency is greatly concerned about pharmacies
that produce large quantities of unapproved new
animal drugs that are essentially copies of FDA-approved products."

… It is clear, then, that the FDA considers
[those] who are compounding imitations of
FDA-approved drugs from bulk chemicals and
selling them to veterinarians to be in violation of
federal laws. Because the pharmacies may be
obtaining inexpensive bulk chemicals from
overseas, and do not have to recoup tens of
millions of dollars in R&D and approval costs,
they are able to price their imitations well below
the FDA-approved product they copy.  This
practice is referred to by many in the industry
as "drug piracy," and should not be confused
with legal compounding practices.

We respect the rights of all companies, veterinarians, and pharmacists to operate in the free enterprise system, as long as their business practices are within the letter and intent of the law.  We are all responsible for understanding and respecting the law.  The animal health industry, veterinary community, producers and animal owners must extend their best efforts to ensure that all the products used on animals are as safe as possible for the animal and for the food supply.  Veterinary compounders offer the profession a valuable service, and the best way to ensure that the right to compound continues is to respect the law and to patronize those compounders who respect it as well.

Have a great weekend.


Ron Brakke

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