Animal Health News & Notes for March 3, 2000

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Brakke Consulting’s
Animal Health News & Notes for March 3, 2000
Copyright © Brakke Consulting, Inc.
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Company Earnings Releases
 Purina Mills, Inc. reported preliminary unaudited summary financial results for the fourth quarter and year ended December 31, 1999.  Purina generated approximately $53.1 million of earnings before interest, taxes, depreciation and amortization expense, and restructuring costs (EBITDAR) during 1999 on feed sales volume of over 4.3 million tons.  During 1998, the Company reported approximately $67.8 million of EBITDAR and 4.6 million tons.  Although Purina’s results for the year were down, the Company reported results for the fourth quarter ended December 31, 1999, were up significantly versus fourth quarter results in 1998.  As previously disclosed, Purina is making significant progress in moving through its Chapter 11 restructuring. (PRNewswire)
 PETsMART, Inc. announced that for the year ended January 30, 2000, consolidated net sales were $2.1 billion and were unchanged from the $2.1 billion reported in 1998. The 1999 results exclude sales from the UK Pet City subsidiary, which was sold in December 1999, and represented $0.2 billion in 1998.  Comparable store sales for the Company’s North American stores increased 4.6% for the fiscal year ended 1999.  The Company reported consolidated net income of $37.5 million, excluding losses from PETsMART.com of $29.1 million and $45.6 million from the disposal of the Company’s UK Pet City subsidiary and the related tax effect.  (Business Wire)
 Smithfield Foods, Inc. reported results for the first nine months of fiscal 2000 were $3.7 billion, compared to $2.8 billion in the same nine-month period a year ago.  Net income in the first nine months of fiscal 2000 was $46.6 million, compared with net income of $68.1 million, in the same period a year ago.  Acquisitions contributed significantly to this growth. (PRNewswire)

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Company News Releases
 Novartis’ animal health division is reportedly acquiring Canadian biotech group Biostar Inc’s animal vaccine business. No financial details were released.  The deal encompasses an alliance with U.S.-based Diamond Animal Health to produce and distribute a range of bacterial and viral vaccines for cattle. It also includes the rights in Canada to a new vaccine produced by U.S.-based ImmTech to prevent foot rot and liver conditions in cattle.  It also extends Novartis’ strategic entry into the vaccine business; Novartis acquired British vaccine specialist Vericore in December. (Reuters)
 Heska reported that it has completed the sale of its United Kingdom subsidiary, Heska UK, formerly Bloxham Laboratories.  The purchaser is Axiom Veterinary Laboratories, Ltd.  Terms of the sale were not announced.  (company press release)
 Destron Fearing Corporation announced that both its patented bar coded Duflex/Infecta-Guard ear tag system and its patented electronic microchip ear tag system have been approved for Canada’s National Cattle Identification Program. Under the program, which is scheduled to start Jan. 1, 2001, all Canadian cattle will be required to be individually identified with either bar coded or electronic microchip ear tags from an approved supplier.  (PRNewswire)
 PETsMART, Inc. has opened its 500th North American store in Yakima, Washington.  The company plans to open 50 new locations during the year 2000. (PRNewswire)
 PogoPet.com, a Web site that provides personalized pet health services and information, has added new features to further personalize information for dog and cat owners. Pet owners can now find local municipal codes including impoundment, leash laws, licensing requirements, pooper-scooper laws and rabies vaccinations. Pet owners can also surf through the veterinarian directory to find a local veterinarian.  Users who register their pets will have a personal workspace where they can receive personal reminders for prescriptions and vaccinations, manage their prescriptions, check their vaccination schedule, find out about inherited diseases predominant in their breed (dogs only) and take the weight-check quiz. Registered users also get a free public Web page for their pet. (company press release)

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Animal Health News
 A new class of compounds might be used to treat and even prevent “mad cow’’ disease and related diseases, U.S. government researchers reported in Science. A team at the National Institute of Allergy and Infectious Diseases (NIAID) said they had identified a new class of compounds that slows the development of such diseases in mice. The researchers studied compounds known as cyclic tetrapyrroles, which are currently used in treating cancer. Already having shown in vivo activity, they injected mice with a high dose of scrapie, then gave them one of three different cyclic tetrapyrroles during the 80-day incubation period of scrapie. Depending on when and how they got the drugs, the mice lived from 50 – 300% longer than untreated mice. (Reuters)
 Agriculture Secretary Dan Glickman announced his decision to call the first vote on the pork checkoff program since it was created 14 years ago. Opponents of the $48 million program, which pays for research as well as advertising, say it has done little to stimulate pork consumption and mostly benefits meat processors and large, corporate farm operations. (AP)
 According to a recent study by Agriculture Department scientists, about half the cattle at the nation’s feedlots carry E. coli bacteria during the summer – making it at least 10 times more common than previously thought, government research shows. The occurrence of E. coli in feedlots drops to 1% during the winter.  The incidence of E. coli in cattle is believed to vary by region as well as time of year. The study doesn’t mean that E. coli O157:H7 is any more likely to show up in the supermarket, but USDA officials said they are considering new controls on cattle production and beef processing. (AP)
 U.S. beef and beef variety meats exports set record levels on a volume basis in 1999.  The U.S. beef industry exported nearly 2.45 billion pounds of beef products valued at more than $3.2 billion during 1999.  According to figures released by the USDA, total exports of U.S. beef and beef variety meats during 1999 increased nearly 9% in volume compared to exports during 1998. (PRNewswire)

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Agribusiness News
 Cenex Harvest States Cooperatives, Cargill and DuPont have signed a letter of intent to create Rooster.com, a comprehensive Web-based marketplace to include local farm retailers, cooperatives and manufacturers.  Financial terms of the agreement were not disclosed.  Rooster.com is designed to make it easier for farmers to do business on the Internet.  It will be a two-way virtual electronic mall for the agricultural industry with three initial anchor tenants and scores of other retailers that will be open 24 hours a day, seven days a week.  Here, farmers will be able to market their crops and buy fertilizer, crop protection products, other farm supplies and equipment — all through the same businesses they work with now.  The site is scheduled to be launched by May 1. (PRNewswire)

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Brakke Consulting Announces e-commerce survey

Last week at the Western Veterinary Conference in Las Vegas, Brakke Consulting announced that we are undertaking an e-commerce survey of veterinarians.  This survey of several hundred veterinarians will research current and future acceptance, uses of and attitudes towards the internet within small animal veterinary clinics.  The survey pool will be one of Brakke Consulting’s established US small animal panel groups.  In addition, the report will include a review of the predominant websites relevant to veterinary medicine, such as online ordering, content sites, and veterinary business services.  Additional surveys are anticipated in 6 and 12 months to establish usage trends within the veterinary community.  The initial study will be available for purchase in April 2000.

For more information, visit our website at www.brakkeconsulting.com or call our Dallas office at (972) 243-4033.

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Brakke Consulting Viewpoint

It appears that many of the companies started “spring break” a bit early this year judging by the number of press releases and stories for the week.  Most of the news has the familiar ring of more consolidation, new technology, and e-commerce.

We could not have a week go by without another pet e-commerce company.  The Brakke family now has Tunces (our cat) signed up on 14 pet registers, received gifts of not much value from 10, and have been referred to several veterinary clinics, all in the wrong neighborhood.  We’re still trying to figure out why these dotcom companies would believe that pet owners would switch from their trusted family veterinarian to one recommended by a commercial enterprise.  Or maybe they are hoping to persuade those pet owners who don’t already take their pets to any veterinarian.

It is an interesting time to be an observer of the industry.  Have a good weekend.
 
 [Ron Brakke]
 
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