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Animal Health News & Notes for October 19, 2007 10/19/2007

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Brakke Consulting's
Animal Health News & Notes for October 19, 2007

Copyright © Brakke Consulting, Inc.
 
Editor: Lynn Fondon, DVM, MBA
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IN THE NEWS:
 
earnings news
Elanco
Fort Dodge
Nestle
Pfizer
 
other news
Animal Health International
Digital Angel
Kane Veterinary Supplies
Leader Products
Mach One
Smiths Detection
 
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COMPANY EARNINGS RELEASES
 
> Pfizer reported results for the third quarter of 2007.  Third-quarter Animal Health revenues increased 13% to $636 million, compared to $562 million in the same period last year. The increase is largely attributed to strong product performance in the companion animal and international livestock businesses; the acquisition of Embrex; and the favorable impact of foreign exchange. (company website) 
 
> Eli Lilly and Company announced financial results for the third quarter of 2007. Worldwide sales of animal health division Elanco in the third quarter were $237 million, an increase of 9% compared with the third quarter of 2006. US sales grew 15% to $112 million while sales outside the US grew 5%. Sales growth in the US benefited from the recent acquisition of Ivy Animal Health, Inc. (company website) 
 
> Wyeth reported results for the 2007 third quarter ending September 30, 2007. Worldwide net revenue for Fort Dodge Animal Health increased 11% to $235 million for the quarter due to higher sales of livestock, poultry and companion animal products, which included sales of the recently launched ProMeris flea and tick products. Excluding the favorable impact of foreign exchange, worldwide Animal Health net revenue increased 6%. (company press release)
 
> Nestle SA reported results for the first nine months of 2007. The PetCare division reported sales of CHF 9.0 billion ($7.7 billion), with 4.1% real internal growth and 7.1% organic growth. This strong performance was driven by the continued upmarket movement of this category's brand portfolio towards the premium and super-premium market segments. Top performing brands included Beneful, Fancy Feast, Gourmet Gold, ONE, Pro Plan, Bakers and Dog and Cat Chow. (company press release)
 
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BRAKKE CONSULTING, INC.
Market Research Services
 
Throughout the year, Brakke Consulting, Inc., performs a variety of marketing surveys and studies for client companies.  If your firm needs help assessing the feasibility of a new product or technology, identifying the opinions and trends of product consumers, or determining the current market for products, Brakke Consulting, Inc. can build a market study to meet your needs.  We also produce syndicated studies in specific animal health market areas.  Further information can be found at our website at www.brakkeconsulting.com or by calling our Dallas office at 972.243.4033.
 
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COMPANY NEWS RELEASES
 
> Animal Health International, Inc. announced that it has acquired Kane Veterinary Supplies, Ltd. for approximately $24 million in cash, together with a performance-based earnout. Kane Veterinary Supplies is a leading distributor of animal health products in Canada, with over $45 million in revenue for its fiscal year ended July 31, 2007. (CNNMoney) 
 
> The USDA’s Animal and Plant Health Inspection Service announced the approval of two new animal identification devices: a visual tag with radio frequency identification (RFID) from Leader Products and the first approved injectable transponder from Digital Angel.  The devices carry an official animal identification number (AIN), which is used to identify individual animals as part of USDA’s National Animal Identification System (NAIS). (CattleNetwork)
 
>  Mach One Corporation, which manufactures immune or gamma globulin (IgG) replacement products for horses and cattle, has filed a registration with the US Securities and Exchange Commission (SEC). Once this is complete, Mach One plans to list as a security on the US Over-the-Counter Bulletin Board regulated by the SEC.  The company currently trades on the Pink Sheets under the symbol "MNCN". (Animal Pharm) 
 
> UK   Smiths Detection announced it will launch a portable detection system that will enable veterinarians to carry out on-site diagnosis of animal diseases in less than 90 minutes rather than having to send samples for laboratory analysis.  The initial focus of the technology will be on identifying foot-and-mouth disease and avian influenza with a wide range of tests for other diseases to be made available after the initial systems are deployed. The new portable device comprises a simple-to-use sample preparation cartridge and a rugged portable instrument. The technology employed is a novel form of Polymerase Chain Reaction (PCR). (company website) 
 
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ANIMAL HEALTH NEWS
 
> DENMARK - BLUETONGUE   Denmark confirmed its first outbreak of bluetongue, as the virus continues to spread in northern Europe. The outbreak occurred in a flock of 250 sheep and lambs near Sakskobing in the south of the country. Only one animal showed clinical signs of disease, and it died less than 48 hours after developing symptoms. The rest of the herd has been put under restrictions.  (Animal Pharm)
 
> BRAZIL - ELECTRONIC MONITORING  Brazil is implementing an electronic system to monitor cattle movements within the country and along its borders. This is part of measures designed to improve the safety of Brazilian beef exports, and to reassure the international community, particularly the EU, that the exports meet high sanitary standards. From the beginning of November, the country will be enforcing a system certifying that exporters meet EU standards. The system has already been used on 10 million head of cattle, expected to increase to up to 15 million head next month. (Animal Pharm)
 
> RUSSIA - US POULTRY BAN   Russia has banned poultry imports from six US poultry processors following a recent round of audits. The ban becomes effective Nov. 1. The Russian Federation Veterinary and Phytosanitary Surveillance Service recently provided USDA with results from audits of US poultry plants conducted July 9 through July 27.  Under an existing agreement with Russia, however, USDA's Food Safety Inspection Service has the authority to re-certify these plants while FSIS conducts its own investigation. (Meating Place)
 
> US - DECLAW BAN UPHELD   The California Supreme Court refused to review a decision by the state Court of Appeal upholding West Hollywood's ban on nontherapeutic declawing of animals. The California Veterinary Medical Association challenged the ordinance, originally passed in 2004, claiming it was preempted by state law, and that West Hollywood has no authority to regulate the medical practices of veterinarians. A Los Angeles judge overturned the ordinance in 2005, ruling that cities lack power to limit the practice of state-licensed professionals; the Court of Appeal reversed the lower court decision earlier this year.  (www.myfoxla.com)
 
> US - BEEF MARKETING CLAIM  The USDA's Agricultural Marketing Service is establishing a voluntary standard for grass-fed livestock marketing claim.  The standard incorporates the revisions that resulted from comments received from an earlier proposed standard.  Livestock producers my request the USDA to verify a grass (forage)-fed claim through an audit of the production process in accordance with previously established procedures, and the meat sold from these approved programs can carry a claim verified by the USDA.  (AnimalNet - Meating Place) 
 
>  US - PRRSV RESEARCH   Agricultural Research Service (ARS) researchers, working with colleagues at the University of Nebraska-Lincoln, evaluated two lines of swine for genetic resistance to PRRSV. All pigs in both groups became infected after exposure to PRRSV. However, one line generally recovered more quickly, maintained higher levels of weight gain during illness and had lower body temperatures. The scientists also looked at the tissue expression of 11 genes and one "housekeeping" gene involved in the immune response to PRRSV. Both lines of swine showed significant activity in 11 of the 12 genes, but the type of activity differed between the two groups. High pre-infection blood levels of interleukin-8 were found to be significantly associated with PRRSV-resistant pigs. Low levels of interferon-gamma in blood and in RNA samples were also correlated with PRRSV resistance. (Feedstuffs)
 
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BRAKKE CONSULTING VIEWPOINT
 
Four large companies reported nice sales increases for the third quarter.  At least two of them noted that favorable exchange rates contributed to the increases.  The weak US dollar will give a boost to any US company that operates in strong currency markets. 
 
Two other items are worth some commentary.  Brazil is using electronic monitoring to reassure its international customers, especially the EU, that its beef comes from certified sources.  This is only the latest step in progression of food safety measures that will only become more comprehensive as technology and consumer demand combine to change the production process.  And no matter what you think of the California decision, remember, that is where a lot of consumer trends start; the industry and profession ignore that fact at their peril.
 
Have a safe weekend.
 
John Mannhaupt
 
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