U.S. acquisitions give European vaccine maker a shot in the arm.Following World War II, a small vaccine maker was started in an obscure town near Holland's border with Germany. The company grew in international stature along with the development of industrialized in·dus·tri·al·ize v. in·dus·tri·al·ized, in·dus·tri·al·iz·ing, in·dus·tri·al·iz·es v.tr. 1. To develop industry in (a country or society, for example). 2. livestock production, eventually becoming one of America's fastest-growing animal health companies. "To allow industrial poultry poultry, domesticated fowl kept primarily for meat and eggs; including birds of the order Galliformes, e.g., the chicken, turkey, guinea fowl, pheasant, quail, and peacock; and natatorial (swimming) birds, e.g., the duck and goose. production, you have to have vaccines," says Ruurd Stolp, president of Intervet International, based in Boxmeer, Germany. "Our vaccines got exported around the world with the poultry as the Dutch industry grew." Stolp was among the international officials who visited the Midwest earlier this year to celebrate the grand opening of Intervet's new research and distribution facility west of Kansas City Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo. The 350-acre campus, assumed in 2000 as part of the acquisition of Bayer's North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. biologicals business, will be Intervet's primary research and manufacturing site for livestock vaccines, as well as the company's largest U.S. distribution center. Parent company Akzo Nobel Akzo Nobel is a multinational company, active in the fields of healthcare products, coatings and chemicals. Headquartered in Amsterdam, the Netherlands, the company has activities in more than 80 countries, and employs approximately 62,000 people. , a global leader in industrial coatings An industrial coating is a paint or coating defined by its protective, rather than its aesthetic properties, although it can provide both. The most common use of industrial coatings is for corrosion control of steel or concrete. with a modest-sized human pharmaceutical business, is predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. European-based but largely U.S.-owned by virtue of its many Wall Street investors. "We want to be everywhere in the world, and we've pretty well done that," Stolp told 200 or so guests who attended the grand opening event. The company's affiliates operate in 55 countries and sell into at least 100, while employing 5,000 people worldwide. With the addition of the DeSoto, Kan., site, which added 170 jobs, the U.S. workforce now includes more than 800 people. Intervet International, which inherited inherited received by inheritance. inherited achondroplastic dwarfism see achondroplastic dwarfism. inherited combined immunodeficiency see combined immune deficiency syndrome (disease). its name from a small French firm, already has a well-worn strategy toward expanding into new territory. "We understand how to live with and respect differences," Stolp says. "Could you develop a vaccine for the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in Europe? You probably could, but you don't understand the market. You have to operate in that market." To build its presence in the United States, Intervet has pursued a long series of acquisitions, initiated in 1979 with the purchase of Intercontinental in·ter·con·ti·nen·tal adj. 1. Extending or taking place between or among continents: intercontinental exploration; intercontinental cooperation. 2. Biologics, a poultry vaccine company based in Millsboro, Del., and now home to the U.S. corporate office. That was followed by acquisitions of Ambico swine swine, name for any of the cloven-hoofed mammals of the family Suidae, native to the Old World. A swine has a rather long, mobile snout, a heavy, relatively short-legged body, a thick, bristly hide, and a small tail. vaccines in 1996 and Hoechst-Roussel feed additives and livestock pharmaceuticals in 1999. These acquisitions have helped counter the advantages held by competing companies tied to large human pharmaceutical businesses with access to new compounds to aid developments in the animal health field, observes Ron Brakke, president of Brakke Consulting in Dallas. The company's long-range plan is to reduce reliance on its traditional livestock and European markets by expanding its presence in products for companion animals and horses as well as in the North American market. Livestock product sales currently account for about 77 percent of the company's global receipts but only equal about 64 percent of the total global market. Europe represents about 29 percent of the global market but accounts for 53 percent of Intervet's revenue. Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. , Intervet derives 21 percent of its sales from the United States and Canada, while North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. represents 37 percent of the world market. Not only does the United States comprise the world's single-largest animal health products market, company officials say it's the seat of technological innovation. That's important to a firm that invests 18 percent of sales in research and development at 14 sites employing 2,500 people worldwide. Intervet used biotechnology to develop the world's first recombinant DNA recombinant DNA n. Genetically engineered DNA prepared by transplanting or splicing one or more segments of DNA into the chromosomes of an organism from a different species. Such DNA becomes part of the host's genetic makeup and is replicated. vaccine for swine in 1984, well before the use of modern genetic manipulation procedures became more politically contentious. The company continues to focus on "complex production technologies and sophisticated biotechnology" to bring new products to market. Among them: the only existing catfish catfish, common name applied to members of the freshwater fish families constituting the suborder Nematognathi. The catfish is related to the sucker and the minnow, and like them has a complex set of bones forming a sensitive hearing apparatus. vaccine on the market, AQUAVAC-ESC, as well as an "ELISA ELISA (e-li´sah) Enzyme-Linked Immuno-Sorbent Assay; any enzyme immunoassay using an enzyme-labeled immunoreactant and an immunosorbent. ELISA n. " test, capable of differentiating the antibodies in animals exposed to foot-and-mouth disease foot-and-mouth disease, highly contagious disease almost exclusive to cattle, sheep, swine, goats, and other cloven-hoofed animals. It is caused by a virus that was identified in 1897. (FMD FMD foot-and-mouth disease. ) from those that have been vaccinated for it. The company's full portfolio includes antiparasitics, anti-infectives, endocrine endocrine /en·do·crine/ (en´do-krin, en´do-krin) 1. secreting internally. 2. pertaining to internal secretions; hormonal. See also under system. en·do·crine adj. products, diagnostics, feed additives and productivity enhancers, in addition to vaccines for pets, livestock, poultry and aquaculture aquaculture, the raising and harvesting of fresh- and saltwater plants and animals. The most economically important form of aquaculture is fish farming, an industry that accounts for an ever increasing share of world fisheries production. . Technology and service--exemplified by the company's slogan A slogan is a memorable motto or phrase used in a political, commercial, religious and other context as a repetitive expression of an idea or purpose. Slogans vary from the written and the visual to the chanted and the vulgar. "Expect More"--are two attributes company officials stress. Vaccines are recognized as the historical cornerstone as well as the foundation for future success. Brakke predicts the sales and development of vaccines for food production animals will be one of the industry's bright spots as industrialized livestock production continues to expand and consolidate, driven in part by consumer desires for safe, consistent and high-quality meat products. "Vaccines provide an efficient and cost-effective way of managing herd health, greatly reducing the need for chemical-related treatments," he says. "The leading vaccine companies are spending significant research dollars in improving the quality and effectiveness of vaccines." His consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a anticipates that biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. will continue to play a leading role in vaccine development, as it has in the past few years, as well as throughout other areas of agribusiness agribusiness Agriculture operated by business; specifically, that part of a modern national economy devoted to the production, processing, and distribution of food and fibre products and byproducts. , despite the public visibility of some protest groups. "The political negatives on biotechnology has to date mainly been focused on genetic manipulation of seeds for crops. There has been little concern shown related to improved vaccines and pharmaceuticals," Brakke explains. "There were some issues related to the BST (convention) BST - British Summer Time. The name for daylight-saving time in the UK GMT time zone. produced and marketed by Monsanto for milk production. However, most of that seems to have moved on to the seed GMO GMO abbr. genetically modified organism issues. We see biotechnology playing a major role in the genetics of food producing animals in the next 10 to 20 years." Animal health companies will continue to consolidate into fewer, larger companies with more market share, he predicts. "The keys to success for surviving companies surviving company The company that emerges in control following a business combination. The surviving company is generally one of the firms entering the combination but may be a new company formed by the combination. will be new products and technology that will allow them to expand sales to create the critical mass necessary to compete in the marketplace," Brakke concludes. Based on that prognosis prognosis /prog·no·sis/ (prog-no´sis) a forecast of the probable course and outcome of a disorder.prognos´tic prog·no·sis n. pl. prog·no·ses 1. , Intervet appears to be well positioned for growth in the veterinary health arena. [GRAPHICS OMITTED]
WORLD VETERINARY
SUPPLIERS
Rank
Sales 2002
2002 2001 Company million $
1 1 Merial 1,505
2 2 Pfizer 1,119
3 3 Intervet 1,019
4 4 Bayer 802
5 7 Elanco 693
6 6 Schering-Plough 677
7 5 Fort Dodge 653
8 8 Novartis 624
9 9 Pharmacia 506
10 11 Virbac 333
Source: Wood Mackenzie
U.S. MARKET SHARES FOR LEADING
ANIMAL HEALTH COMPANIES
Rank Company 2002 Market Share
1 Merial 16%
2 Pfizer 13%
3 Elanco 9%
4 Fort Dodge 9%
5 Bayer 9%
6 Pharmacia 6%
7 Monsanto 7%
8 Intervet 6%
9 Schering-Plough 6%
10 Alpharma 5%
11 Novartis 5%
Source: Wood Mackenzie
STOCK PRICE AT CLOSE OF MARKET
Month This
Exchange: Ago Month Year Ago
Ticker 7/31/03 8/29/03 8/31/02
CAPITAL EQUIPMENT, FARM MACHINERY
AGCO Corp. NYSE:AG 19.18 22.08 19.12
Ag Bag International OTC BB:AGBG 0.38 0.30 NA
Art's-Way
Manufacturing Co. NASDAQ:ARTW 4.40 5.15 2.98
Bion Environmental
Technologies Inc. OTC BB:BION 1.01 NA 3.35
Butler
Manufacturing Co. NYSE:BBR 15.85 14.72 24.50
CNH Global NYSE:CNH 9.94 13.88 19.00
Deere & Co. NYSE:DE 50.78 56.51 45.92
Fiat NYSE:FIA 6.60 6.79 11.42
Gehl Co. NASDAQ:GEHL 10.84 11.38 10.02
Kubota Corp. NYSE:KUB 14.70 16.70 14.45
Lindsay
Manufacturing Co. NYSE:LNN 23.03 22.10 21.75
Titan International NYSE:TWI 1.40 2.50 3.77
Trimble
Navigation Ltd. NASDAQ:TRMB 27.35 26.74 14.00
Twin Disc Inc. NYSE:TDI 15.90 16.55 13.75
Valmont
Industries Inc. NYSE:VMI 21.06 21.27 24.50
SEED, BIOTECH, CROP PROTECTION
American
Vanguard Corp. AMEX:AVD 21.80 27.20 13.83
BASF AG NYSE:BF 47.38 46.35 41.25
Bayer CropScience NYSE:BAY 23.66 21.63 23.88
Delta & Pine Land Co. NYSE:DLP 24.71 24.90 18.20
Dow Chemical NYSE:DOW 35.30 34.53 30.22
DuPont NYSE:DD 43.94 44.74 40.31
Eden Bioscience Corp. NASDAQ:EDEN 1.41 1.20 1.73
FMC Corp. NYSE:FMC 23.90 24.89 28.31
Genencor
International NASDAQ:GCOR 16.73 16.49 9.38
HumaTech Inc. OTC BB:HUMTE 0.59 0.35 0.74
IGI Inc. AMEX:IG 1.19 1.65 0.66
Landec Corp. NASDAQ:LNDC 3.35 3.86 2.17
Monsanto Co. NYSE:MON 23.00 25.71 18.37
Savia S.A. de C.V. NYSE:VAI NA NA NA
Syngenta NYSE:SYT 11.00 11.10 10.84
FINANCIAL
Ag Services of
America Inc. NYSE:ASV 6.50 6.59 10.60
FBL Financial
Group Inc. NYSE:FFG 22.91 24.26 19.30
Federal Agricultural
Mortgage Corp. NYSE:AGM 25.59 29.46 28.00
PLANT NUTRIENTS, FERTILIZER
Agrium Inc. NYSE:AGU 11.20 12.15 9.29
Church & Dwight Co. NYSE:CHD 32.40 31.95 31.30
IMC Global Inc. NYSE:IGL 7.31 7.83 13.24
Phosphate Resource
Partners LP NYSE:PLP 1.20 1.48 3.11
Potash Corp. of
Saskatchewan NYSE:POT 65.04 70.90 60.61
Terra Industries Inc. NYSE:TRA 1.27 1.27 1.95
ANIMAL HEALTH, GENETICS, FEED
Abbott Laboratories NYSE:ABT 39.25 40.30 40.03
Alpharma Inc. NYSE:ALO 19.85 20.97 10.12
Balchem Encapsulates AMEX:BCP 23.91 23.22 24.25
Bioreliance Corp. NASDAQ:BREL 22.00 26.29 23.08
Eli Lilly & Co. NYSE:LLY 65.84 66.53 58.05
eMerge
Interactive Inc. NASDAQ:EMRG 0.72 0.84 0.38
Merck & Co. Inc. NYSE:MRK 55.28 50.32 50.52
Neogen Corp. NASDAQ:NEOG 18.50 17.60 13.01
Novartis NYSE:NVS 38.59 36.97 40.45
Pfizer Inc. NYSE:PFE 33.36 29.92 33.08
Schering-Plough Corp. NYSE:SGP 16.98 15.19 23.08
Wyeth NYSE:WYE 45.58 42.85 42.80
FOOD/FIBER/GRAIN/INDUSTRIAL PROCESSORS
The Andersons Inc. NASDAQ:ANDE 13.11 13.50 12.90
Archer Daniels
Midland Co. NYSE:ADM 13.14 13.87 12.19
Bunge Limited NYSE:BG 29.95 30.26 21.40
Cal-Maine Foods Inc. NASDAQ:CALM 6.46 7.20 NA
ConAgra Inc. NYSE:CAG 22.53 22.00 26.29
Corn Products
International Inc. NYSE:CPO 31.30 31.53 28.00
Dean Foods Inc. NYSE:DF 29.93 29.05 25.23
Pilgrim's Pride Corp. NYSE:CHX 12.72 12.91 9.75
Sanderson Farms Inc. NASDAQ:SAFM 29.69 29.95 17.70
Smithfield Foods Inc. NYSE:SFD 21.30 20.25 17.73
Tate & Lyle PLC OTC BB:TATYY 22.09 22.45 22.50
Tyson Foods Inc. NYSE:TSN 11.33 11.20 12.42
All stock prices have been adjusted for splits.
Candace Krebs is a freelance writer based in Enid, Okla. |
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