» 2003

Animal Health News & Notes for May 2, 2003 5/2/2003

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Brakke Consulting’s
Animal Health News & Notes for May 2, 2003

Copyright © Brakke Consulting, Inc.
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COMPANY EARNINGS RELEASES

>  Aventis reported that first quarter sales for Merial were $432 million in the first quarter, an operational decline of 1% from the year-ago period. (company website)

>  Veterinary Pet Services, Inc. (VPSI), the parent company of Veterinary Pet Insurance (VPI) and its subsidiary, DVM Insurance Agency, announced net income for the year ending December 31, 2002 of $2.3 million, an increase of 123% compared to 2001. Gross premiums produced in 2002 grew to $64.2 million, an increase of 43% compared to 2001. VPSI's 2002 annual revenues increased by 37% to $37.5 million, compared to $27.4 million in 2001. The company wrote approximately 125,800 new pet insurance policies in 2002 compared to 88,100 new policies in 2001, an increase of 43%.  (PRNewswire)

>  BASF reported that first quarter sales in its fine chemicals division were 8.1% lower than in 2002. Sales volumes of carotenoids, lysine, cosmetic raw materials and vitamin C increased. Severe currency and price effects, however, reduced total sales revenues. Income from operations before special items increased to EUR41 million ($44 million). (Business Wire)

>  Tyson Foods reported that sales for the second quarter of fiscal 2003 were $5.8 billion, no change from the second quarter of 2002. Operating income was $183 million compared to $179 million in the same quarter last year. Sales for the first six months of fiscal 2003 were $11.6 billion compared to $11.7 billion last year. Operating income was $328 million compared to $452 million in the same period last year. (Meating Place)

>  Maple Leaf Foods Inc. saw its profits decline in the first quarter due to a restructuring at majority-owned Canada Bread, strong performance at Maple Leaf's bakery business and because of a surplus in beef, pork and poultry products across North America. Sales for the first quarter of $1.3 billion compared to $1.2 billion for the same period last year, while earnings from operations before unusual items of $33.2 million decreased from $41.7 million last year. Meat sales for the first quarter were $721 million compared to $737 million last year. (Meating Place)

>  Central Garden & Pet Company announced its financial results for the fiscal second quarter of 2003, ended March 29, 2003.  Net sales for the second quarter were $330.5 million compared with $290.7 million in the comparable fiscal 2002 period. The Company recorded net income for the quarter of $13.5 million compared with a net income of $10.9 million in the comparable year-ago period.  Net sales for the first half of fiscal 2003 were $542.4 million, compared with $501.4 million in the comparable 2002 period. Net income for the first half of 2003 was $12.8 million compared with $9.4 million in the comparable year ago period, before the effect of adopting SFAS No. 142 on September 30, 2001. (Business Wire)

>  eMerge Interactive Inc. announced first quarter results for the three month period ending March 31, 2003.  Revenues were $162,000 compared to $230,000 in the comparable prior year period.  Net loss for the quarter was $2.8 million, compared to $4.2 million in the same quarter last year.  The decrease in revenues reflects a reduction in feedyard data management services and web advertising offset by an increase in more profitable revenues from CattleLog data and supply chain management services and VerifEYE solo units. (company press release)

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BRAKKECONSULTING, INC.
Communication Challenges

One of the largest yearly investments most companies make is in Advertising and Promotion.  When was the last time you seriously evaluated your program?  Are you using the right mix of sales promotion, public relations, database marketing and advertising?  Do you have a customer retention program?  Are you taking advantage of global synergies?  Do you have an Internet strategy, or merely a web site?  Are your communications agencies performing?  Brakke Consulting, Inc. has the experience and ability to evaluate, audit, and help improve the communication challenges all company’s have.   Contact information for all offices is available on our website at www.brakkeconsulting.com .

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COMPANY NEWS RELEASES

>  Schering-Plough Animal Health Corporation announced an agreement in which Schering-Plough will acquire from Pfizer Inc. the US distribution and marketing rights to Pfizer's intramammary antibiotic infusion products Dariclox, Amoxi-Mast and Orbenin-DC. Dariclox (sodium cloxacillin) and Amoxi-Mast (amoxicillin trihydrate) are approved by the FDA for the treatment of mastitis (inflammation) in lactating dairy cattle. Orbenin-DC (benzathine cloxacillin) is approved by the FDA for the treatment and prevention of mastitis in non-lactating dairy cattle. Financial terms were not disclosed (company website)

>  Merial  announced an agreement to sell its egg layer breeding business, ISA, to a consortium led by Natexis Industrie and O&C Partners.  ISA will operate under the name Institute de Selection Animale (ISA).  The announcement has been expected for several months, since Merial’s poultry breeding business, Hubbard-ISA, announced its intention to focus on chicken and turkey meat birds.  Financial terms were not disclosed.  (Feedstuffs)

>  The FDA approved a new, broad-spectrum parasite control product from Merial that will treat and control 61 species and stages of equine parasites, including tapeworms. Zimecterin Gold combines two active ingredients, ivermectin and praziquantel, to provide the broadest spectrum of parasite control available for horses. Zimecterin Gold is the first equine dewormer licensed in the US for the control of equine tapeworms.  Zimecterin Gold will be available in the US beginning in late summer of 2003.  (company press release)

>  The FDA amended the animal drug regulations to reflect approval of an abbreviated new animal drug application (ANADA) filed by Phoenix Scientific, Inc. The ANADA provides for the use of a butorphanol tartrate injectable solution for the relief of pain in horses. (AnimalNet – Federal Register)

>  Farnam announced the acquisition of the Sulfodene line of OTC skin treatments.  Financial terms were not disclosed.  (Pet Business)

>  Milk Specialties Company announced that the company has acquired the assets of Adell Corporation of Wisconsin.  Adell Corporation manufactures a range of milk based products including spray dried hi-fats, lactose, whey and whey permeates and sells these products both domestically and internationally.  Financial terms were not disclosed. (company press release)

>  Nestle Purina PetCare announced that it has been granted a US patent for Purina Veterinary Diagnostics Glucotest Feline Urinary Glucose Detection System.  The new technology helps owners of diabetic cats tell at a glance whether their pet’s urine glucose levels are within an acceptable range or whether veterinary consultation is needed.  The product uses color-change technology to warn owners when their cat’s glucose levels are too high. (company press release)

>  Pfizer Inc. announced that animal health research operations in Groton, Connecticut and Terre Haute, Indiana will be closed by the end of the year.  The company will move its veterinary and inflammatory disease research programs to Michigan, where Pharmacia had a large presence. Michigan Gov. Jennifer Granholm offered an incentive package worth nearly $635 million to Pfizer if the company retained and expanded Pharmacia's operations in the area. (AP, Reuters)

>  Doskocil Manufacturing celebrates its 40th anniversary this year. Doskocil is the leading manufacturer and marketer of both plastic portable kennels and doghouses in the US.  It is also a leading manufacturer of cat products, soft pet bedding, and feeding and watering systems for pets. (company press release)

>  The name of IBP Inc., the wholly owned fresh meats subsidiary of Tyson Foods Inc. is being changed to Tyson Fresh Meats Inc.  The name change does not affect the structure or location of the Fresh Meats operations or offices. The shift to the Tyson Fresh Meats Inc. name legally took effect May 1. (Wattnet Meatnews)

>  KFC, the world's largest chicken restaurant chain, announced new standards meant to guarantee humane treatment for its birds from hatchery to slaughterhouse. The new poultry standards adopted by KFC apply to the birds' housing, nutrition and how they are caught and transported to the slaughterhouse. The fast-food giant also asked the government to review a possible change in how processors slaughter its birds. (AP)

>  Superior Livestock Auction, Inc. announced the merger of their Internet division with Stampede Cattle Company.  Superior and Stampede are the two premier Internet cattle marketing companies in the country.  The focus of the new company will be a continued dedication to creating competitive marketing tools for producers through the most innovative technology available. The new company will operate as "Superior Stampede".  A combined sales force of more than 375 marketing representatives will help cattlemen merchandize their livestock nationwide. (company press release)

>  KOREA    Roche Vitamins and Fine Chemicals Division opened a feed premix facility in South Korea that will produce around 4,000 metric tons of premix annually for swine, poultry, cattle and aquaculture markets. (Feedstuffs)

>  UK   The coveted Queens Award for Enterprise has been granted to Cyton Biosciences Ltd for its outstanding success in helping veterinary pharmaceutical companies throughout the world to obtain authorization of their products in Europe. Established in 1998, the company now employs 9 scientists who manage the development of a wide range of animal health products to steer them through the regulatory process and on to the market. (company press release)

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ANIMAL AGRICULTURE ALLIANCE STAKEHOLDERS SUMMIT  MAY 12-14, 2003

There is still time to register for the second industry-wide Stakeholders Summit, sponsored by the Animal Agriculture Alliance.  This two-day conference, “Challenges to the U.S. Animal Protein Businesses: Domestic and International Responses, Risks and Repositioning,” will be held May 12–14, at the Hyatt Regency Crystal City Hotel in Arlington, Virginia.  In cooperation with Rabobank International and Brakke Consulting, Inc., the Summit is targeted at senior management of all companies involved from “farm to fork.” 

For registration prior to April 19th, the cost for attendance is $375 per person, or $350 per person for more than one attendee from the same organization.  After April 19th, the cost is $425 and $400 respectively.  Registration for the Summit can be made securely via the Alliance website at www.AnimalAgAlliance.org.

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ANIMAL HEALTH NEWS

>  US   The carcasses of 250 cattle that apparently had been poisoned were found at a feedlot in eastern Nebraska.  The state Department of Agriculture and the University of Nebraska, along with other agencies, are investigating.  One possibility was that the cattle were poisoned by organic phosphate, commonly used as an insecticide, because about 30 that survived were responding to a drug used to combat nerve gas in soldiers.  It is unknown whether the poisoning was accidental or intentional.  (AP)

>  EU   The EU plans to cut the maximum permitted level of the carotenoid pigment canthaxanthin in feed for farmed salmon and chickens by at least two-thirds at the end of 2003.   Canthaxanthin is used in feeds to give farmed salmon a pinkish color similar to wild salmon, and makes egg yolks a more intense orange-yellow color.  (Feed Mix)

>  US   The National Milk Producers Federation, a group representing 60,000 milk producers across the country, is considering asking farmers nationwide to band together to increase wholesale milk prices by decreasing production, selling off cattle or increasing milk exports. The federation's board will vote on the proposal May 9. If enough farmers agree to take part, the program would likely start on a 12-month trial basis. (AP)

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AGRIBUSINESS NEWS

>  Monsanto and DuPont and its subsidiary Pioneer Hi-Bred International announced a worldwide licensing agreement to Monsanto’s recently approved YieldGard Rootworm insect-protected corn technology.  As part of the deal, Pioneer receives a royalty-bearing license to Monsanto’s YieldGard Rootworm technology.  Monsanto will receive royalties and certain other payments from DuPont.  Additional details were not disclosed.  (Feedstuffs)


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BRAKKE CONSULTING VIEWPOINT

I've been spending this week in the Midwest visiting a number of our clients and enjoying the spring rains that have covered most of the area.  The spirits of most of the producers have improved a great deal with a few inches of rain. Hopefully, the new attitudes will have a positive impact on sales in the coming months.

As it relates to industry news, the first quarter reports are coming in about as we had expected. It is going to a challenging year for most companies. We're again hearing rumors of more distribution changes by some of the leading companies.  We see most of the moves as tactical and not strategic.  The current Distributor Effectiveness Study that we are conducting is uncovering the values of the animal health distributor to the veterinary and producer customers. If you've not yet subscribed to the study we suggest that you do so soon.

Have a great weekend.

Ron Brakke

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