Animal Health News & Notes for November 16, 2018

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Brakke Consulting’s
Animal Health News & Notes for November 16, 2018
Copyright © Brakke Consulting, Inc.

Editor: Lynn Fondon DVM MBA
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IN THE NEWS:

Brakke Consulting news
Flea Control & Heartworm Markets report – early order discount ends Nov 21
Transaction assistance

earnings news
Bayer
Benchmark
ImmuCell
Kane Biotech
PetIQ
Tyson Foods
Zomedica

other news
ASPCA Pet Health Insurance
Atradius
Centaur Services
Ceva
Crum & Forster Pet Insurance Group
Ethos Veterinary Health
HBH Enterprises
Heska
Higgins Premium Pet Foods
Kemiex
Midwest Veterinary Supply
MWI
Petco
PetIQ
St. Francis Group
Tiba Biotech
Versele-Laga
Vet Space
Vetswest

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BRAKKE CONSULTING, INC.
2018 US FLEA CONTROL AND HEARTWORM MARKETS REPORT
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– Product descriptions, prices, and sales for the leading veterinary flea, tick and heartworm products
– an overview of the veterinary and OTC flea control markets
– discussion of new flea and tick products, including CENTRAGARD and CREDELIO
– 2018 survey of 350 veterinarians
– 2018 survey of 500 pet owners

The report on the US Flea Control & Heartworm Markets will be available for a purchase price of $7,250 if ordered by WEDNESDAY, NOVEMBER 21, and $7,750 after that date.

Please contact Dr. Lynn Fondon at (972) 243-4033 or lfondon@brakkeconsulting.com to pre-order the report, or for more information visit our website.

www.BrakkeConsulting.com

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COMPANY EARNINGS RELEASES

• Bayer reported results for the third quarter of 2018. Animal Health sales were EUR 304 million ($353 million), a decline of 15% compared to the third quarter of 2017 (13.5% Fx & portfolio adj.). North American animal health sales declined 22% to EUR 112 million ($130 million). (company website)

• ImmuCell Corporation announced its financial results for the quarter ended September 30, 2018. Total product sales were $2.2 million, an increase of 7% compared to the same period in 2017. Net loss was ($250,000) in comparison to a net loss of ($339,000) during the three-month period ended September 30, 2017. (company press release)

• PetIQ, Inc. reported financial results for the third quarter of 2018. Net sales were $131 million, an increase of 117% compared to the comparable prior-year quarter. Product segment net sales were $108.5 million and Services segment revenues were $22.9 million in the third quarter of 2018. The increase in consolidated net sales reflects growth in existing and new retail partners and the expansion of its product and services offerings. Net income was $3.9 million compared to $0.9 million in the prior-year quarter. (company website)

• Benchmark announced results for the fiscal year ended September 30, 2018. The company posted sales of GBP 150 million ($193 million) for the year, a 7% improvement in annual revenues. Benchmark’s adjusted EBITDA was around GBP 16.5 million, which represents year-on-year growth of 65%. (Animal Pharm)

• Kane Biotech Inc. announced its third quarter 2018 financial results. Total revenue was $109,791, an 81% increase compared to the comparable prior-year quarter. Net loss was $(996,688) compared to a net loss of $(869,246) in the comparable prior-year period. (company press release)

• Zomedica Pharmaceuticals Corp. reported consolidated financial results for the third quarter ended September 30, 2018. Zomedica recorded net loss of $(1.9) million for the quarter, compared to a loss of $(2.1) million for the quarter ended September 30, 2017. Zomedica, which is in the development stage, recorded no revenues in the quarter. Zomedica had cash and cash equivalents of $526,817 as of September 30, 2018, compared to $3,448,147 as of December 31, 2017. (company press release)

• Tyson Foods reported results for its fiscal 2018 year ended September 30. Net Sales were $40.05 billion, an increase of 5% compared to fiscal 2017. Net income was $3.03 billion compared to net income of $1.78 billion for fiscal 2017. Beef, Chicken, and Prepared Foods segment sales were higher for the year, while Pork segment sales declined. (company website)

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COMPANY NEWS RELEASES

• Heska announced it has become the sole provider of point-of-care diagnostics and consumables to Ethos Veterinary Health, a hospital network with 18 veterinary hospitals. (Animal Pharm)

• Petco announced it will stop selling pet food and treats containing artificial colors, flavors and preservatives. After May 2019 customers will no longer find brands containing such ingredients on their shelves. More than 40 artificial ingredients are on its banned list. (APPA e-update)

• PetIQ, Inc. announced it has completed the strategic acquisition of HBH Enterprises LLC, with HBH becoming a wholly-owned subsidiary of PetIQ. The consideration for the acquisition consisted of $0.5 million in cash, the issuance of 400,000 shares of PetIQ Class B common stock and the repayment of certain HBH debt. HBH is a developer and manufacturer of specialty pet supplements and treats. (company website)

• Versele-Laga, a Belgium-based premium pet food and pet care company, has acquired The Higgins Group Corp., aka Higgins Premium Pet Foods, a Miami-based companion bird and small animal food manufacturer. Financial terms were not disclosed. (Pet Product News)

• Crum & Forster Pet Insurance Group, the provider of ASPCA Pet Health Insurance, announced it has entered into a partnership with Midwest Veterinary Supply. As part of the partnership, Midwest Veterinary Supply will also offer ASPCA Pet Health Insurance as a voluntary benefit to their employees. (company press release)

• Atradius and Kemiex announced the launch of the first-ever digital trading platform for the human pharmaceutical, veterinary medicine, food and feed industries. The new digital marketplace will enable buyers and sellers of APIs and additives to be able to identify reliable trading partners. (Animal Pharm)

• Tiba Biotech announced it has developed a platform technology for the rapid production of self-replicating mRNA vaccines that can be programed to protect against multiple pathogens. Importantly the firm’s vaccines do not require complicated subzero cold chain distribution or storage. The company is currently in discussions with commercialization partners in both human and animal health sectors. (Animal Pharm)

• EU Ceva Santé Animale announced that the European Medicines Agency’s Committee for Medicinal Products for Veterinary Use (CVMP) has adopted a positive opinion for the initial marketing authorization of Isemid (torasemide), a treatment for clinical signs related to congestive heart failure in dogs including pulmonary edema. (Animal Pharm)

• UK MWI Animal Health announced it has folded its four U.K. subsidiaries into the parent company under a restructuring. The four entities now known collectively as MWI Animal Health are: Centaur Services (purchased in 2010); St. Francis Group (acquired in 2016); Vetswest (purchased in 2015); and Vet Space (acquired in 2014). (TodaysVeterinaryBusiness)

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ANIMAL HEALTH NEWS

• US – BRUCELLOSIS Wyoming reported a new case of brucellosis in a cattle herd in the Wyoming Brucellosis Designated Surveillance Area. Serologic testing has shown reactor-level results on five animals from one herd; further testing, including bacterial culture, will be conducted to confirm the serology results. The case is not related to another case found in early October in Park County, Wyoming, and there is no epidemiological link between the two cases. (Feedstuffs)

• US – LIVESTOCK WELFARE 61% of California voters have voted in favor of a law that calls for elimination of cages in egg production by the end of 2021. The measure also calls for similar standards for pigs raised for pork production and calves raised for veal production. Proposition 12 is also known as the Farm Animal Confinement Initiative. (Vet Advantage – Watt AgNet)

• CHINA – ASF Chinese animal feed maker Tangrenshen Group announced that tests on feed made by one of its units had ruled out the presence of African swine fever (ASF). The new report follows a report from Tangrenshen earlier in the week that authorities in China’s eastern Anhui province had reported what they suspected was ASF in feed made by Tangrenshen’s 51%-owned subsidiary, Bili Meiyingwei Nutrition Feedstuff. (Feedstuffs)

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BRAKKE CONSULTING, INC.
TRANSACTION ASSISTANCE

Buying, selling or merging? We can help!

Brakke Consulting assists many clients with mergers, acquisitions and divestitures. Our transaction experts can provide the insight, ability and contacts you need in the animal health, pet, veterinary and specialty chemicals markets. Please contact any of our offices for a confidential consultation.

www.BrakkeConsulting.com

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BRAKKE CONSULTING VIEWPOINT

The reported results for the third quarter for some of the traditional large and smaller companies were not that impressive this week. One has to wonder how some of the smaller companies will survive until they are absorbed by larger players or no longer exist. In the case of one of the large players, one has to ask what happened in the third quarter? Then one observes the revenue results of one of the non-traditional companies that seem to be increasing their revenue in products and services far in excess of industry growth. Are these results demonstrating a shift occurring in the marketplace and channels serving pet owners that could be even more significant in 2019? This should give managers something to contemplate over Thanksgiving week.

Here in the US, we assume that many individuals in the industry will be taking most of Thanksgiving week off next week, or working at a reduced pace in order to rest up for the remaining few weeks of the year. It is the time of year in the US when one reflects back on the prior 11 months and takes time to thank those individuals that were important in each of us achieving our goals and objectives in 2018. Brakke Consulting wants to thank each of our consultants and clients for your support during 2018. It has been another great year for the firm and we look forward to an exciting 2019 in the animal health industry.

Have a great weekend and travel safe if you’ve already started the Thanksgiving holiday week!

Ron Brakke

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