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Brakke Consulting’s
Animal Health News & Notes for November 8, 2019
Copyright © Brakke Consulting
Editor: Lynn Fondon DVM MBA
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IN THE NEWS:
Brakke Consulting News
Flea, Tick and Heartworm Markets report – pre-order now
Earnings News
Beyond Meat
Elanco
Freshpet
Heska
Hills
Ouro Fino Saúde Animal
Phibro
Trupanion
Zoetis
Other News
Animal Consulting Enterprises
Apiam Animal Health
Compassion First Pet Hospitals
Cosmos Corporation
Covetrus
IDEXX (Marshfield)
IDEXX (Trupanion)
Marshfield Laboratories
Trupanion
Zoetis
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BRAKKE CONSULTING
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– 2019 survey of 300+ veterinarians
– 2019 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 MONDAY, NOVEMBER 25, and $7,750 after that date.
Please contact Dr. Lynn Fondon at 336-396-3916 or lfondon@brakkeconsulting.com to pre-order the report, or for more information visit our website.
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COMPANY EARNINGS RELEASES
- Zoetis reported its financial results for the third quarter of 2019. The company reported revenue of $1.6 billion for the third quarter of 2019, an increase of 7% compared with the third quarter of 2018 (+9% excluding the impact of foreign currency). Net income was $433 million, an increase of 25%. (company press release)
- Elanco Animal Health reported financial results for the third quarter of 2019. Total revenue was $771 million, an increase of 1% compared with the third quarter of 2018 (+2% without the impact of foreign exchange rates). Revenue excluding strategic exits was $753 million; an increase of 3%. Net income was $10.0 million, a decline of $50.2 million compared with the third quarter of 2018, primarily driven by asset impairments, restructuring, and other special charges. (company press release)
- Phibro Animal Health Corporation announced its financial results for its first quarter ended September 30, 2019. Company net sales were $190 million, a decrease of 5% compared to the prior-year quarter. Animal Health net sales were $122 million, a decline of 7% from the year-ago period. (company press release)
- Heska Corporation reported financial results for its third quarter ended September 30, 2019. Revenue was $31.2 million, a 1% increase from the third quarter of 2018. Net loss attributable to Heska was $(0.3) million, which includes a loss of approximately $(0.6) million recorded in other expense relating to cyber theft, compared to a loss of $(1.7) million in the third quarter of 2018. (company website)
- Ouro Fino Saúde Animal reported results for the third quarter of 2019. Revenues totaled R$154.4 million ($38.6 million), a 3.7% year-on-year decrease in sales. (Animal Pharm)
- Colgate-Palmolive Company reported results for the third quarter 2019. Hill’s Pet Nutrition net sales were $633 million, an increase of 8.5% over the prior-year period. Unit volume increased 6.5%, pricing increased 3.5% and foreign exchange was negative 1.5%. (company press release)
- Freshpet, Inc. reported financial results for the third quarter of 2019. Net sales were $65.3 million, an increase of 28.5% over the prior-year period. Net income was $3.1 million compared to net loss of $(0.1) million in the prior-year period. (GlobeNewswire)
- Trupanion, Inc. announced financial results for the third quarter of 2019. Total revenue was $99 million, an increase of 27% compared to the third quarter of 2018. Total enrolled pets increased 23% over the year-ago period. Net income was $0.8 million, compared to net income of $1.2 million in the third quarter of 2018. (company press release)
- Beyond Meat reported financial results for the third quarter of 2019. Revenue increased 250% to $92 million versus the same period last year. Net income was $4.1 million, compared to net loss of $(9.3) million in the year-ago period. (Feedstuffs)
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COMPANY NEWS RELEASES
- IDEXX announced that it has acquired Marshfield Laboratories, a national diagnostic laboratory service provider with a strong presence in the mid and upper Midwest regions. Financial terms were not disclosed. (company earnings call)
- Trupanion, Inc. announced long-term strategic partnerships with Covetrus and IDEXX, integrating Trupanion’s proprietary, patented software with the partners’ practice management software. Through these strategic partnerships, Trupanion expects to incrementally build upon its data leadership and over time to better identify new pets entering the household. (company press release)
- Cosmos Corporation announced it has acquired a portfolio of bio-enzymatic pet urine odor and stain removal products under the Urine Off, Zorb-it-Up and Urine Buster brand names. Financial terms were not disclosed. (GlobalPets)
- Compassion-First Pet Hospitals announced the addition of three Florida hospitals: Specialists in Companion Animal Neurology (SCAN) of Clearwater and Naples, and First Coast Veterinary Specialists and Emergency of Jacksonville Beach, bringing the total to nearly 50 hospitals across 14 states. The SCAN hospitals are the only practices on the Florida Gulf Coast that exclusively treat medical and surgical disorders of the brain, spinal cord, nerves and muscles. (company press release)
- EU Zoetis announced the launch of Versican Plus Bb Oral, the first oral vaccine for dogs in Europe. The product protects against Bordetella bronchiseptica for 12 months. (Animal Pharm)
- AUSTRALIA Apiam Animal Health announced it has acquired Animal Consulting Enterprises (ACE), a provider of autogenous vaccine and laboratory diagnostic services for large animals. ACE recorded sales of Aus$6.5 million ($4.5 million) in 2019. Financial terms were not disclosed. (Animal Pharm)
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ANIMAL HEALTH STOCK PRICE TRACKER
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ANIMAL HEALTH NEWS
- US – VETERINARY CARE GUIDELINES The American Animal Hospital Association (AAHA) has released the 2019 AAHA Canine Life Stage Guidelines to help veterinary practitioners tailor the care they provide each patient. The guidelines recognize four distinct canine life stages, outlining focused areas of healthcare that are important during the maturation pathway, and emphasize preventive healthcare strategies and recommendations based on age, size, lifestyle, and breed. (association press release)
- US – ANIMAL WELFARE The US Senate has unanimously passed a bill that makes animal cruelty a federal felony. The PACT Act – which stands for Preventing Animal Cruelty and Torture – passed the House last month. The legislation expands a previous law passed in 2010, which prohibits animal fighting and only criminalizes animal cruelty if the wrongdoers create and sell videos depicting the act. All 50 states have laws in their books against animal cruelty on the state level. (CNN.com)
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BRAKKE CONSULTING VIEWPOINT
Who Is In Control?
It has been virtually impossible to ignore the biggest animal disease story of 2019. If “pandemic” was not previously part of your vocabulary, it certainly should be now. African Swine Fever (ASF) has extended its reach globally. This deadly viral disease of pigs has spread to several Asian countries, but most importantly to China, the largest pork producing and pork consuming country in the world. The disease is not present in the United States, but it is having an influence here.
During October, Tyson and JBS, two of the largest U.S. pork processors, announced they were forbidding the feeding of the beta-adrenergic agonist, ractopamine, to pigs in their U.S. pork supply chain after February of 2020. Knowing that Chinese pork production has and will continue to be drastically reduced by ASF, this move could be interpreted as an indication these two meat processers do not want limitations on the amount of pork they have available to ship to China next year. Feeding ractopamine and the import of pork fed ractopamine is prohibited in China. This regulatory position could be blamed for these two pork processors’ recent announcement. However, China has had that regulatory position for years. The change is the catastrophe of ASF and the Chinese consumer demand for imported pork to replace the meat lost because of this disease. Chinese consumer demand is, in effect, “who is in control”.
The loss of ractopamine sales in the U.S. by two large animal health companies (an estimated 50% reduction in use) has been assessed as having a “small sales impact” (a few tens of millions of dollars) on the two major sellers, and thus the animal health industry as a whole. However, the larger concern for the future of food animal products cannot be ignored. How many currently licensed or pipeline food animal products could be vulnerable to similar regulation by foreign consumer demand as US meat exports increase? We have knowingly operated in a global regulatory environment for some time, but it took a pandemic viral disease like ASF to enable Chinese consumers to dictate the price you pay for pork chops and the formulation of rations fed by U.S. swine producers.
Cary Christensen
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