Fort Dodge brand may disappear under planned deal
A familiar name in the veterinary drug world could fall by the wayside, if a planned buyout goes forward.
Pharmaceutical group Boehringer Ingelheim (BI) and its U.S. animal health division, Boehringer Ingelheim Vetmedica, Inc., announced Sept. 22 that it has entered into an agreement with Pfizer, Inc., to acquire “certain assets” of Wyeth Pharmaceutical’s Fort Dodge Animal Health. The deal will take place after the closing of Pfizer’s merger with Wyeth, which is expected in the fourth quarter of this year. Financial terms of the BI-Fort Dodge deal were not disclosed.
Under the proposed agreement, BI will take ownership of a “significant portion of the Fort Dodge product portfolio,” including part of its pet vaccine product line in the U.S. and Canada. The company was not specific about which products they would be acquiring.
“If approved, Boehringer Ingelheim will acquire several, but not all, of the pet vaccines currently manufactured and sold by Fort Dodge Animal Health in the U.S., Canada, and Australia,” said BI spokeswoman Amy Kunkel. “In addition, we will acquire a portfolio of pet pharmaceutical products current sold by Fort Dodge Animal Health in the U.S.”
Ron Brakke, CEO of animal health consulting firm Brakke Consulting, Inc., said that veterinarians are unlikely to see many changes in the product line as a result of the deal, but they will probably see one change.
“We think it will have little or no actual impact on the veterinarian,” Brakke said. “The biggest change will be that Fort Dodge as a company and organization will no longer exist.”
Under the deal, BI will take over manufacturing and research facilities in Ft. Dodge, Iowa. Kunkel said if the deal goes through, the company will “implement a comprehensive integration strategy that includes a full review of manufacturing capacities at all sites.”
If the deal is approved, Fort Dodge products will most likely be sold under either the BI or Pfizer brands. Brakke said the deal will be good for the Germany-based BI.
“It vaults them into one of the leading suppliers of companion animal products where they have been growing, but relatively small related to market share,” Brakke said. “We’re assuming that BI will pick up products with sales in excess of $300 million in the transaction.”
Fort Dodge Animal Health pet vaccines currently include Duramune Max, for treatment of canine parvovirus, canine distemper, canine adenovirus, and canine parainfluenza; and Feline Immunodeficiency Virus vaccine Fel-O-Vax FIV. Fort Dodge also makes vaccines to treat canine giardia, leptospirosis and Lyme disease.
Boehringer Ingelheim produces the non-steroidal anti-inflammatory drug (NSAID) Metacam and canine congestive heart failure drug Vetmedin.
This year has seen several mergers and buyouts from major drug companies, seeking a larger share of the $19 billion global animal health market. But that is a drop in the bucket compared to $773-billion-dollar global human pharmaceutical market.
“We’re of the opinion that all of these deals are driven only by the human pharmaceutical parent needing growth in revenues because current large products are going generic,” Brakke said. “None of these large transactions are being completed because of the animal health division.”
Sanofi-Merial buyout development
The European Union recently approved the sale of animal-drug-maker Merial to sanofi-aventis, and the deal has gone through. Sanofi and Merck and Co., each owned half of Merial, but under the deal, sanofi paid $4 billion in cash for Merck’s 50 percent of the company.
Merck had to sell its share of Merial in order to avoid anti-trust issues, due to its planned $41 billion merger with Schering-Plough Corp. Schering-Plough also owns a large animal health operation, Intervet/Schering Plough.
As part of the sanofi-Merial agreement, after the Merck deal is closed, sanofi has the option to merge Merial with Intervet, which would create a gigantic new company in the animal drug world. In a recent article from Reuters news service, sanofi CEO Chris Viehbacher said “there is a likelihood” that he would exercise this option.
2009: Year of the drug deals
Pfizer to buy Wyeth: $68 billion