In this next installment we continue our look at the top stories from 2012 in Animal Health. Today we’ll take a look at the 7th, 6th, and 5th stories that will have the most significant impact on the trajectory of the animal health industry for the near- and mid-terms. For those of you who are on the road often, follow me on Twitter to keep abreast of Animal Health news and notes as they occur.
7: Perrigo acquires Sergeant’s Pet Care Products: The folks at Sergeant’s with fipronil as their crown jewel found a ready buyer in consumer healthcare giant Perrigo, who immediately becomes a player in the OTC pet products category – a very nice complement for their portfolio. There have been leaks of Merial’s Frontline Plus into retail stores for years now, but how will the veterinary community (and indeed Merial themselves) react to the magic of store brand generics at every consumer chain imaginable? Will Merial’s patents continue to be the finger in the dyke, or will veterinarians have to kiss flea and tick sales goodbye forever. We will probably see in 2013.
6: MWI purchases PCI: Who is not impressed by the growth of the distribution company MWI, at the close of their fiscal year in September they became the first US Animal Health distribution company to reach the $2b mark; this time last year their stock was at $68, now it sits at $108! Undaunted by its rivals Butler Schein and Webster Veterinary Supply, whose animal health businesses benefit from the scale and synergies that their dental and human healthcare divisions provide, pure-play Animal Health MWI’s growth has been the most consistent. Originating in the Northwest US, their movement south and east has been deliberate and methodical, but getting a foothold in the Northeast population centers has been elusive. Not anymore. With the purchase of PCI – who has basically owned the NY metroplex – they have landed in the heart of it. Watch MWI continue to edge out their competitors in marketshare and revenue. And, alas, we bid adieu to yet another regional distributor in the US, who have been unfortunate casualties during this period of market consolidation the past 15 years.
5: Bayer acquires Teva and KMG Chemicals: The channel switch of their Advantage® line in recent years has masked a congested R&D pipeline. But, unlike some of the other Big Pharma companies with animal health divisions who are waiting to see how the markets react to Pfizer’s spin-off of its Zoetis Animal Health unit, Bayer is talking matters into their own hands. Kudos! Although the purchases of KMG Chemical and Teva US’ animal health aren’t blockbusters, they still give roughly $200m in additional sales that Bayer will assume almost immediately; and it bulks up both their companion animal and livestock divisions. Will they stop there or do they have their eyes on a larger acquisition, someone the size of let’s say the company in the 4th biggest story of 2012…stay tuned to see who may be next on their shopping list