» 2002

Animal Health News & Notes for December 6, 2002 12/6/2002

******************************************************************
Brakke Consulting’s
Animal Health News & Notes for December 6, 2002

Copyright © Brakke Consulting, Inc.
******************************************************************
COMPANY EARNINGS RELEASES

>  PETsMART, Inc. announced results for its third quarter, which ended Nov. 3, 2002.  The company reported third quarter net income of $20.7 million versus net income of $5.8 million for the third quarter of 2001.  Net sales for the third quarter of 2002 were $657 million, compared to $599 million last year. Comparable store sales grew 9% over the third quarter of last year.  Services sales for the third quarter were $36.7 million, up 30.5% compared with the third quarter of last year, an increase that continues to reflect the company's focus and investment in growing pet services. (Business Wire)
>  Dainippon Pharmaceuticals reported sales for its animal science division for the first half of the fiscal year. The company reported that net sales for the six months ended  September 30, 2002 rose by 6.0% to Yen 12.4 billion ($103 million) compared to the prior-year period, accounting for 15.7% of the company's total sales. (company information)

>  H.J. Heinz announced that second quarter (ended October 30) sales for U.S. and Canadian pet products were $227.5 million, a 4.8% decline from the prior year, principally due to the planned exit from certain private label items. Operating income for pet products is $46.0 million for the quarter, up 25.5% versus the prior-year period, reflecting margin growth due to pricing and improved mix. (Business Wire)

>  Farmland Industries Inc. reported a loss of $346.7 million in its latest fiscal year, reflecting the difficulties that drove the nation's biggest farm-owned cooperative to file for bankruptcy reorganization in May.  Farmland's fertilizer and petroleum businesses, which the company plans to sell, fared worst.  Farmland said its beef and pork businesses remain key to its recovery. (AP)

>  OurPet's Company released results for its third quarter ended September 30, 2002. OurPet's also announced that, based on strong initial interest in new products by a number of its customers, it anticipates solid sales growth in 2003. Quarterly revenues of $1.3 million declined 18%, compared to year-earlier period revenue of $1.6 million. Net income was a loss of ($49,245), versus net income of $170,271 in the third quarter of 2001. (Business Wire)

******************************************************************
NOW AVAILABLE:
THE 2002 US FLEA AND HEARTWORM REPORT

This year’s report will include an all-new survey of 250 dog and cat owners, as well as a new veterinarian survey. The veterinary survey includes information on new products including ProHeart 6, Iverhart Plus, and Revolution.  In addition, Bayer’s just-launched Advantix is profiled in the report.  Product sales and trends for the veterinary products, as well as an overview of the trends in OTC sales, are also included.

The report will be available until December 20, 2002 at an early-order price of $3,500.  Studies ordered after the Christmas holiday will be priced at $4,000.

For more information, call 972-243-4033 or email Dr. Lynn Fondon at lfondon@brakkeconsulting.com.

********************************************************************
COMPANY NEWS RELEASES

>  IDEXX and Roche Applied Science announced that they will collaborate on the development of a Polymerase Chain Reaction (PCR)-based diagnostic assays for the veterinary market.  The tests will run on Roche’s LightCycler system, and IDEXX will develop and sell a kit containing the test reagents, as well as being the exclusive distributor of products resulting from the collaboration.  (Veterinary Practice News)

>  IDEXX has begun marketing a new test to aid in the treatment of Lyme disease in dogs.  The IDEXX Lyme C6 Quantitative Antibody Test allows veterinarians to quantify the antibody concentration in Lyme-positive dogs and monitor changes in antibody levels after treatment. (Animal Pharm)

>  Heska announced that it has entered into an agreement with Pharmacia Diagnostics in which Pharmacia has acquired a worldwide exclusive license to develop and commercialize Heska’s recombinant allergen intellectual property for human allergy diagnostic use.  Heska will receive license fees, milestone payments, and royalties as products containing the allergens are developed and commercialized.  (company press release)

>  Iams announced that the beginning of operations at its new Latin American plant in Argentina.  The plant will supply the Mercosur countries, as well as Chile, Bolivia and South Africa.  (Animal Pharm)

>  W. F. Young, Inc. and Merial have formed an educational partnership to develop the Horse Lovers Bulletin, an informative and entertaining newsletter offering advice to horse owners and enthusiasts from horse experts. The Horse Lovers Bulletin will be available at the top equine retailers/dealers, at no charge.    (company press release)

>  Oil-Dri Corp. announced that it has signed a definitive agreement to purchase the Jonny Cat litter business of A&M Products, a subsidiary of The Clorox Company.  The parties expect the transaction to close in December.  Financial details for the all-cash transaction were not disclosed. (Feedstuffs)

>  Embrex, Inc. announced it has received regulatory approval for Bursaplex infectious bursal disease (IBD) vaccine from the Ministry of Agriculture for The People's Republic of China. China is the world's second largest producer of chicken with an estimated output of more than 6 billion chickens per year. (PRNewswire)

>  Following extensive research at its Science & Technology Facility, Hill’s upgraded the palatability of its Science Plan Adult range early in 2002.  The company tested the improved palatability of these products against equivalent products of Royal Canin and The Iams Company, including both Iams and Eukanuba products. Hill’s published these results and communicated them to the pet trade, veterinary community and consumers in more than 15 countries.  Royal Canin has taken action against Hill’s in a number of countries.  However, Hill’s has the right to continue to publish its palatability results in all countries. Out of more than 15 countries, Hill’s has had to stop its campaign in only one.  (Pets International)

>  Farmland Industries received another four months to come up with a bankruptcy reorganization plan. This is the second extension that the company has received. Farmland filed for Chapter 11 bankruptcy protection on May 31. The company has already announced that it will sell its fertilizer business and is looking into rebuilding the company around its meat businesses. (Drovers Alert)

>  NETHERLANDS  Nutreco announced the acquisition of Dutch company Selko B.V., which specializes in the production and sales of organic components for animal feeds. The acquisition of Selko will extend Nutreco's international market presence in Asia, Latin America and the Middle East.  The acquisition of Selko supports Nutreco in its aim to become a global leading player in premixes and feed specialties, as well as enhancing the Nutreco GreenlineTN concept offering alternative solutions for antibiotics in animal nutrition. (Wattnet Meatnews)

>  RUSSIA   Raritet company, one of the largest wholesale company in Moscow, acquired the rights for Trapeza dog food brand from Famel company. Trapeza is the most well-known dry dog food brand produced in Russia. The production facilities now belong to Crona company, Arovit Petfood representative in Russia. (Pets International – Zooinform)

> CANADA   PharmaGap Inc. has signed a collaboration
agreement with P.E.I. Pork and the Canadian Centre for Swine Improvement Inc., a research group supported by the Canadian breeders industry, to develop a test to measure swine immunological resistance to diseases. The objective is to develop a simple test in a kit form that would be usable by the breeders and animal health professionals to identify the animals with the highest immunological resistance and then breed them together. (AnimalNet – The Guardian)

*******************************************************************
BRAKKE CONSULTING, INC.

NYC OVERVIEW

It was great to have the room filled this past Monday for the inaugural 2003 Animal Health Industry Overview Presentation.  To those of you that attended, thank you for your participation and questions.  Then next scheduled presentations are in Orlando on January 20 and in Las Vegas on February 19.  We have also scheduled several tailored company presentations.  The theme of the 2003 overview is “What will the Animal Health Business look like in 2012?”  We provide our analysis of the past several years and insights into the coming decade.   Information and registration is available on our website at www.BrakkeConsulting.com .

We look forward to seeing you at a future presentation.
 
*******************************************************************
ANIMAL HEALTH NEWS

> IRELAND   The Irish government's agriculture ministry has confirmed a case of BSE in a 45-month-old bull, the first time bovine spongiform encephalopathy has been diagnosed
in Ireland in an animal so young. Up to now, the Irish beef industry has been selling beef overseas and to home consumers on the basis that no cases have been found in cattle born after controls were tightened on animal feeds in the mid-1990s. Until the start of this year, no animal born after 1996 had become infected, although three born in 1997 have been identified as having the disease since the start of 2002. (Animalnet – PA News)

>  UK   A new working group has been set up in the UK to review the latest evidence on whether there could be a risk to human health from hormone residues in beef and beef meat products. The working group was set up by the British Veterinary Products Committee (VPC), which gives independent advice to the Veterinary Medicine Directorate (VMD) on the safety, quality and effectiveness of veterinary medicines. The VMD is part of the Department for the Environment, Food and Rural Affairs (DEFRA). The VPC has been asked to re-examine the issue and to advise the European Commission on whether the science justifies the existing ban. (Wattnet Meatnews)

>  ITALY   The Italian health and agriculture authorities have reported two more cases of BSE in the country. The incidents were discovered in cattle over 30 months old in the areas around Reggio Emilia and Rome. The new cases brings the number of cattle discovered with BSE to 83 since the country started testing all slaughtered cattle over 30 months of age for the disease last year. (Wattnet Meatnews)

>  CANADA   Researchers at the Veterinary Infectious
Disease Organization (VIDO) have developed a virus to carry vaccine antigens into the respiratory tracts of cattle. 
The virus, a modified version of Bovine adenovirus-3 (BAV-3), is a live vaccine vector that offers several key advantages for cattle producers and commercial development. The virus is harmless to the animal, targets the respiratory tract and is relatively inexpensive to produce. The vector's most immediate potential is for intranasal delivery against bovine respiratory disease pathogens. VIDO is working with industry partners to fully explore its market potential. (AnimalNet – VIDO)

*******************************************************************
BRAKKE CONSULTING VIEWPOINT

In my travels the past few weeks, I have talked with many of you on various issues facing our industry.  The two issues that seem to surface in every conversation are manufacturer/distributor relationships and generic drug sales trends.  Based on these conversations and other inputs, Brakke Consulting will be conducting a study in early 2003 that surveys veterinarians and asks their opinions and attitudes regarding distributor performance.

Below are some of the issues the “2003 Distributor Effectiveness Study” will investigate with veterinarians:
- distributor representative influence in general
- which distributors they do business with and why
- veterinarian expectations for distributors
- what distributors do (or don’t do) that influences purchasing decisions
- distributor representative impact on selection of name brand or generic products

We have always believed that the customer (veterinarian) should be the key driver for marketing and distribution strategies for manufacturers.  In the past few years, some manufacturers have made decisions regarding distribution based on the manufacturer’s point of view versus the view and needs of the customer.  We believe that our study will help clarify the needs and expectations of the customers, for both manufacturers and distributors.  Please contact our office for more details on the “Distributor Effectiveness Study”.  We would be pleased to email or fax you a copy of the project outline.

Have a great weekend!

[Ron Brakke]

*******************************************************************
This electronic newsletter is the sole property of Brakke Consulting, Inc.
Any use of the contents herein should be approved by and appropriately attributed to Brakke Consulting, Inc.

For more information about Brakke Consulting’s services and syndicated studies, visit our website at www.brakkeconsulting.com.

In order to receive the HTML version instead of the text version of this newsletter, use the link at the bottom of this week’s newsletter that states: “If you would like for us to remove your name from the circulation list, or if you need to change your profile or email address, please click here”.  Then click on the button below your email address that says HTML, and click “Update subscription.”