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Animal Health News & Notes for July 25, 2014 7/25/2014

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Brakke Consulting's
Animal Health News & Notes for July 25, 2014
Copyright © Brakke Consulting, Inc.
 
Editor: Lynn Fondon DVM MBA
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IN THE NEWS:
 
Brakke Consulting news
Pet Pharmaceuticals Market Shift Study
Recruiting
 
earnings news
Abaxis
Ceva
Elanco
IDEXX
Krka
Neogen
PetMed Express
VCA
Virbac 
 
other news
Bayer
Chanelle
DermaZoo
IDEXX
Independent Vetcare Holdings
Merck
Trupanion  
 
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BRAKKE CONSULTING ANNOUNCES NEW STUDY:
PET PHARMACEUTICALS MARKET SHIFT

Where pet owners go to purchase veterinarian-prescribed medicines is beginning to change as new distribution models and proposed legislative measures are evolving to give consumers more choice. A new report by Brakke Consulting, Inc. and Trone Brand Energy will define how this change of the pet pharmaceutical industry will affect manufacturers, distributors, retailers and veterinarians once a critical mass of consumers begin to adopt new models.

The study will be completed before the end of 2014. For more information, or to purchase the study at a discounted rate, contact David Goodnight at 830-285-1259 or DGoodnight@BrakkeConsulting.com by July 31, 2014.

www.BrakkeConsulting.com

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COMPANY EARNINGS RELEASES
 
> Eli Lilly and Company announced financial results for the second quarter of 2014. Sales for animal health division Elanco totaled $601 million, an increase of 11% compared with the second quarter of 2013. The recently-completed Lohmann acquisition contributed 4 percentage points to worldwide animal health sales growth. (company press release) 
 
> Virbac SA reported results for the second quarter of 2014. Consolidated sales were EUR 186 million ($254 million), a decrease of 2% compared to the same period of last year due to the unfavorable evolution of exchange rates vs. the Euro. At constant exchange rates, the real revenue growth reached 2% organically; 3% globally. (company website) 
 
> Ceva announced results for the first six months of 2014. Consolidated sales reached EUR 367 million ($500 million), an increase of 18% due in part to the acquisition of Sogeval at the end of 2013. At constant perimeter and exchange rates, growth was 11%. (company press release) 
 
> Neogen Corporation announced results for its 2014 fiscal year which ended May 31. Revenues increased 19% from the previous year to $247 million.  The acquisitions of SyrVet, Prima Tech, and Chem-Tech during the fiscal year contributed to the company’s revenue increase. Fiscal year net income was $28.2 million, a 4% increase compared to the prior year. Animal Safety revenues were $131 million, a 30% increase; organic growth for the Animal Safety segment was 6%. (company press release) 
 
> IDEXX Laboratories, Inc. reported results for the second quarter of 2014. Revenues were $390 million, an increase of 11% versus the prior year period; organic revenue growth was 9%. Net income was $57 million, an increase of 6%. Companion Animal Group revenue increased 10% to $327 million. (company website)  
 
> Abaxis, Inc. reported financial results for the first fiscal quarter ended June 30, 2014. Veterinary market revenues were $39 million, up 8% over last year's comparable quarter. (Wall Street Journal) 
 
> VCA Inc. reported financial results for the second quarter ended June 30, 2014. Revenue increased 5% to $490 million; net income increased 9% to $45.6 million. Animal Hospital revenue in the current quarter increased 6%, to $387 million; Laboratory internal revenue increased 5% to $96 million. (company press release) 
 
> PetMed Express, Inc. announced its financial results for the fiscal first quarter ended June 30, 2014. Net sales were $73 million, a decrease of 2% compared to the quarter ended June 30, 2013. Net income was $5.0 million, a 5% increase compared to the comparable period in the prior year. (company website) 
 
> Krka reported results for the first half of 2014. Animal health sales were EUR 22.7 million ($30.5 million), an increase of 3% compared to the first half of the prior year. (Animal Pharm)
 
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2014 KC Animal Health Investment Forum
Tuesday, August 26, 2014
Kansas City Convention Center

The sixth annual KC Animal Health Investment Forum will feature more than a dozen presenting companies seeking business partnerships and opportunities. Hear about the latest up-and-coming pharmaceutical, biological and diagnostic innovations, with applications serving the companion animal, livestock, and equine markets as well as the overall animal health industry.

The event will be held Tuesday, August 26 from 7:30 a.m. to 5 p.m. at the Kansas City Convention Center Grand Ballroom.

Visit http://www.kcanimalhealthforum.com/index.php/register-now/  for full details and registration.

www.kcanimalhealthforum.com
 
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COMPANY NEWS RELEASES
 
> Research conducted by scientists from the University of Nebraska-Lincoln and USDA’s Agricultural Research Service has shown that the cattle feed additive Merck's Zilmax has no noticeable detrimental effect on cattle health or well-being. The results from the study demonstrated some differences in physiological and endocrine markers of stress and muscle accretion in heifers that were supplemented with Zilmax compared to heifers not fed Zilmax. (Veterinary Advantage) 
 
> Bayer Animal Health announced that the original pioneer brand Rompun (xylazine) 100 mg/mL Injectable is now available in the US. (Veterinary Advantage)
 
> IDEXX Laboratories announced plans to move from a hybrid to an all-direct product distribution model in the US for Companion Animal Group diagnostics in 2015, aligning with the company's direct model for instruments, reference lab services, and other CAG products and services. (company website)  
 
> DermaZoo Pharma announced the release of KC Oto-Pack, a new thermally activated gel with 0.15% ketoconazole and 1.0% hydrocortisone. KC Oto-Pack aids in the treatment of acute and chronic otitis and associated pruritus and inflammation. (company press release) 
 
> Trupanion became a public company on July 18 with its initial public offering (IPO) with the U.S. Securities and Exchange Commission. The company sold 7.1 million shares on the New York Stock Exchange (TRUP) priced at $10 per share at opening, closing up at $11.40. The IPO raised about $71 million before discounts and other costs. Trupanion is backed by Maveron Capital, which holds 33.7% of the company, and the Highland Consumer Fund, which holds 15.8%. (DVM360)
 
> EU  Chanelle announced the launch of Prazitel Cat (praziquantel/pyrantel embonate) tablets on the European market, the first generic form of Bayer Animal Health's Drontal Cat antiparasitic for felines. (Animal Pharm) 
 
> UK  Summit Partners announced a majority investment in Independent Vetcare Holdings Limited, one of the largest private veterinary groups in the United Kingdom. formed in 2011, IVC currently boasts approximately 250 vets at more than 100 practices. Financial terms were not disclosed. (Digital Journal)
 
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ANIMAL HEALTH NEWS
 
>  US - VESICULAR STOMATITIS Colorado became the second state in the country (following Texas) to confirm vesicular stomatitis (VS) when four horses on two Weld County premises tested positive for the disease. The animals have no history of travel, and have been placed under quarantine. (TheHorse.com)
 
> US - FAIRNESS TO PET OWNERS ACT  Two US senators have re-introduced the Fairness to Pet Owners Act, which was introduced in the House of Representatives in February. The law would require vets to write prescriptions so that people have the option of buying pet medication elsewhere, including at pharmacies and online. (TheEpochTimes.com)
 
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BRAKKE CONSULTING, INC.
EXECUTIVE AND SALES FORCE RECRUITING

 
Recruiting Means More than Resumes

At Brakke Consulting we find the right person to fit your company’s needs. As part of our executive recruiting services, we manage the entire process of identifying and recruiting top candidates, including:
• Developing metrics to help rank candidates
• Scheduling interviews and arranging for travel
• Maintaining communications with candidates

Our involvement in every step of the process helps maintain communications with candidates, allowing them to ask questions and get another perspective on the company.

For more information about our recruiting services, visit our website or call one of our consultants:
• John Mannhaupt at 972.243.4033
• Ken Berkholtz at 772.223.3079
• Jay Lockhart at 314.821.3368
 
www.BrakkeConsulting.com
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BRAKKE CONSULTING VIEWPOINT
 
Those companies reporting their 2014 second quarter results demonstrate the importance of mergers and acquisitions if a company is to achieve double-digit revenue growth. Based on our readings in the marketplace, it appears to us that 2014 revenue growth without mergers will look a lot like 2013 for most companies. The total market growth at manufacturer level was 2.5% in 2013.
 
As companies begin planning for 2015, it’s important to keep in mind the issue of flat or reduced animal numbers in most species since animals are the actual end-product user. As has occurred the past few years, we expect price increases to play a part in revenue growth in 2015. It appears that the overall economy, while not robust, will continue to slowly improve in 2015, providing some support for increased revenue in selected product areas.

We hope to see a number of you this weekend at the annual AVMA convention in Denver. Have a good weekend!

Ron Brakke
 
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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.
 
Brakke Consulting, Inc.
12005 Ford Rd., Suite 530
Dallas, TX  75234    USA