» 2000

Animal Health News & Notes for February 25, 2000 2/25/2000

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Brakke Consulting’s
Animal Health News & Notes for February 25, 2000

Copyright © Brakke Consulting, Inc.
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Company Earnings Releases
 Veterinary Centers of America Inc. (VCA) reported financial results for the year ended December 31, 1999.  For the year ended December 31, 1999, revenues increased 14% to a record $320.6 million from $281.0 million in 1998. Animal hospital revenues were $223 million and laboratory revenues were $103 million, with $5.8 million in eliminations.  Operating income for the year was $47.0 million, up from $38.8 million in 1998. (Business Wire)
 Akzo Nobel reported that in animal healthcare, Intervet sustained its high profitability level with continued growth in sales and income, while the November 1999 acquisition of  Hoechst Roussel Vet contributed to the results from November.  Intervet sales for 1999 were reported as EUR 515 million ($517 million), an increase of 45% over 1998 sales of EUR 355.  Exact contribution of Hoechst Roussel Vet to sales was not specified.

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Company News Releases
 Feedstuffs has learned that the Monsanto animal health business and Monsanto's DeKalb Swine genetics business will be left in Monsanto Agriculture. The dairy and swine businesses are currently organized under the Monsanto animal agriculture umbrella, which is tied to the Monsanto agriculture chemicals and seeds units. Many industry observers expected the merger would combine Monsanto's dairy products with Pharmacia & Upjohn’s animal health business -- a combination that would create a leading dairy cattle health and productivity business. The combination would have resulted in a business with approximately $650 million in sales.  Also unrealized may be the potential synergies between DeKalb's swine genetics and producer relationships and Upjohn's swine antibiotics and feed additives.  Monsanto Agriculture will also be spun off following the merger of Monsanto and Pharmacia in an initial public offering in which the combined Pharmacia will keep an 80% interest. (Feedstuffs)
 Alpharma Inc. is completing definitive terms for its animal health business to acquire the medicated feed additives business of Hoffmann-La Roche Inc. and should be ready to make the official announcement in March or early in the second quarter, according to Feedstuffs sources who are knowledgeable of the negotiations. The acquisition is significant for Alpharma because it will broaden and compliment the company's presence in medicated products, which are currently limited mainly to BMD for poultry and swine. Sources said Roche will add several supplements, including Bovatec and Cattlyst for cattle and Bio-Cox for poultry -- the first two products serving as Alpharma's entrée into the cattle industry.  The acquisition would add $200 million in sales to Alpharma, doubling its sales and raising it to at least the tier of the top 15 companies. (Feedstuffs)
 Feedstuffs sources have learned that Israeli trader Philipp Brothers, which has interests in animal health in the U.S., including Koffolk and Prince Agri Products, is close to completing the acquisition of the medicated supplements business of Pfizer Inc. Philipp Brothers’ acquisition of the Pfizer business would be an important acquisition for that company. Its Koffolk division has a marginal presence in the medicated feed additives market with a single anticoccidial for chickens, but Pfizer's products would add several strong livestock and poultry products, including Aviax, Banminth, Mecadox, Stafac and Terramycin, and $160 million in sales. (Feedstuffs)
 Merial and Phoenix Scientific announced that they have settled their lawsuit regarding Merial’s claim that Phoenix’s generic injectable ivermectin product infringed Merial’s patent.  In addition to other conditions, the settlement stipulates that Phoenix has the right to make and market its own 1% injectable ivermectin in exchange for a royalty paid to Merial. (Feedstuffs)
 Nutro Products introduced two new dog foods, Natural Choice Large Breed Puppy and Natural Choice Large Breed Adult.  The large breed foods include balanced calcium and phosphorus levels, and L-carnitine and DHA. (Petfood Industry)
 Drugmax.com a business-to-business online trade exchange for pharmaceuticals, over-the-counter products, health and beauty aids and nutritional supplements, announced that it has signed a letter of intent to acquire Desktop Corporation, a business-to-business technology incubator and majority interest in VetMall.com.  Specific terms of the transaction were not disclosed.  VetMall.com is a joint venture by the Desktop Corporation and the W.A. Butler Company, a major distributor of animal health and related products to veterinarians.  VetMall.com links animal owners, veterinarians, animal health product manufacturers and animal health product distributors by providing a site to place and receive product orders, and to display and exchange information about animal care, services and products. VetMall.com's registered membership includes over 1,900 veterinary clinics, provides Web sites to over 22,000 veterinarians and offers over 3,500 consumer products. (Business Wire)
 PETsMART.com announced the introduction of the PETsMART.com Store Savings Center.  The PETsMART.com Store Savings Center allows to enter their zip code, then browse and print store coupons for redemption at their local PETsMART retail store.  (PRNewswire)
 VetCentric, a provider of online services for the veterinary medical industry, announced the launch of VetCentric.com, an information portal designed to bring animals, owners and veterinarians closer together through education and services.  Last month, the company launched VetCentric.net, which provides e-business infrastructure to veterinary practices and allows veterinary practices to create dynamic, completely customized Web sites. VetCentric also allows veterinary practices to add e-commerce functionality to their site with the click of a mouse, as well as to take advantage of VetCentric's other business-to-business e-commerce services. (PRNewswire)
 GoodNewsforPets.com, a niche web site developed as the media’s web-based source for pet news, debuted at the Western Veterinary Conference in Las Vegas, NV. The launch coincides with the site’s opening of the conference virtual newsroom sponsored by Merial. The site is free to the media with funding provided by the sponsors. Goodnewsforpets.com was developed by Germinder & Associates’ web-based public relations services division, gdmnews.com, LLC, in partnership with Yulan Studio. (company news release)
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Animal Health News
 The Council of Europe has called for a Europe-wide ban on the use of all antibiotics in animal feed in order to help tackle the problem of antibiotic resistance in humans. This is the strongest recommendation yet on the resistance issue, and follows concerns raised by other European bodies including the Parliament, the Council of Ministers and the European Medicines Evaluation Agency. The Council notes the ban imposed in 1998 by the Council of Ministers on the use of four antibiotics in animal feed, which is due to be reviewed by December 31st this year in the light of scientific reports now being prepared, particularly by the EC scientific steering committee. It also notes that a ban was already in force in Denmark, Sweden and Finland. (Avcare newsletter)
 Beef that is irradiated to kill deadly bacteria will begin appearing in some stores as early as March as processors start testing the public's reaction to the treated meat. New rules that allow the irradiation of raw beef, pork and lamb take effect today.  The meat is expected to cost an extra three to five cents per pound but the price is likely to drop as it becomes more widely available. Irradiation has long been allowed for poultry, as well as fruits, vegetables and spices. (AP)

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Agribusiness News
 ValiGene and Kimeragen announced today that they will merge to create ValiGen, a EuroAmerican functional genomics company.  The newly formed ValiGen will combine the genomics platform under development at Valigene with chimeraplasty, the unique gene correction technology being developed at Kimeragen.  The new company will pursue commercial opportunities for its technologies in three areas, including using both genomics and chimeroplasty in order to achieve seed and crop improvements without introducing exogenous genetic material into the seed. (PRNewswire)

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Brakke Consulting Viewpoint

 We understand that in the next few weeks, closings will occur on both the Pfizer and Roche medicated feed additives businesses.  Although there have been rumors for quite awhile, this is the first time we have seen sources willing to admit that the acquisitions will indeed occur.

 A number of you commented on last week’s observations related to e-commerce in the animal health area.  If you were not at the Western Veterinary Conference this past week, I can tell you that the activity and interest level in this area is still running high.  I attended the special forum on the Future of e-Commerce in Veterinary Medicine, and visited all of the e-commerce companies’ suites or booths.  There are some nice ideas being floated, but it will take lots of time and dollars for most of these to become successful businesses.  In our opinion, e-commerce is not going to happen fast enough for many of these companies to survive.  We suggest that you select your e-commerce partners with care.

 Comments on the Western Veterinary Conference
 We had the pleasure earlier this week to spend four days at the Western Veterinary Conference, along with several thousand veterinarians, veterinary technicians, and industry personnel.  Other than a couple of mornings of rain, it was a great meeting.  The venue, under the direction of Dr Stephen Crane, has greatly improved the meeting.  Dr Crane and the Western Board of Directors are to be commended on their hard work.

 Some highlights of this year’s meeting were:
 Safari Night party for leaders in industry and veterinarians, sponsored by Veterinary Pet Insurance
 Separate display section for e-commerce companies
 Lots of booth activity on the part of veterinarians.

We recommend that you make plans to attend 2001 meeting.
 
 [Ron Brakke]
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2000 US Animal Health Manufacturers & Distributors Directories are here

The 2000 U.S. Animal Health Industry Manufacturers and Distributors Directories are now available for ordering, with substantial updates and changes from the 1999 editions.

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