Drugmakers Target Man's Best Friend to Boost Growth: Spotlight
Bloomberg News
January 7, 1999, 6:52 a.m. ET
Drugmakers Target Man's Best Friend to Boost Growth: Spotlight
Paris, Jan. 7 (Bloomberg) -- When left alone, Plume would
chew on electric wires. He'd bark and howl. Sometimes, the 5-year-
old Shih Tzu would soil his owner's couch.
''He waged a war on my nerves,'' said his owner, a French
hairdresser named Mad Demandre. She tried scolding; she tried
sedatives. After a year, she gave in and looked for a job that
let her bring her pet to work.
At the time, a decade ago, Demandre had few other options.
Now, drugmakers have a name and a cure for Plume's problem. Like
an estimated 2 million dogs in Europe, he had separation anxiety,
an ailment that can be treated with drugs sold by Novartis AG of
Switzerland, the world's third-largest drugmaker, and Sanofi SA,
France's second-largest drugmaker.
The market for ''companion animal health'' products has
grown to $3.6 billion from almost nothing a decade ago. Merial --
a joint venture of Merck & Co., the world's biggest drugmaker,
and Rhone-Poulenc SA, France's biggest drug company -- said its
industry-leading sales of animal-health products grew 25 percent
last year. Overall drug-industry sales rose just 7 percent.
''It's nothing less than a revolution,'' said Jean-Louis
Foraz, a veterinarian and marketing director at Merial in Lyon,
France. Pet care, he added, ''is by far the fastest-growing, and
most promising segment'' of the $15 billion-a-year animal-health
market.
High Standards
While pet-health product sales are a small fraction of the
$244 billion in sales of prescription drugs for humans, analysts
at Wood-McKenzie, Bankers Trust International's research unit,
say the growth of pet drugs sales should continue to outpace
sales of both human drugs and traditional veterinary medicines.
''Companion animals are increasingly receiving the same
health care as their owners demand for themselves,'' said Bernd
Krueger, who heads the animal health division of Germany's Bayer
AG, the world's No. 3 maker of veterinary products behind Merial
and Pfizer Inc. of the U.S.
Many people think of cats and dogs as kin, surveys suggest.
A majority of 885 U.S. dog owners surveyed in April by the Gallup
Organization and Pfizer said they consider their pet a better
companion than some family members.
About half of the dog owners questioned said they would
''gladly'' pay several thousand dollars to care for a seriously
ill or injured dog, even if that meant borrowing money. Fully 70
percent said they were ready to pay more than they already did
for veterinary care and dog food.
Sales Growth
Some Europeans share those views. Elvire de Brissac, a
French novelist, figures she spends 2,000 French francs ($357) a
month for drugs and calorie-reduced food for her two Labradors,
Epic and Erou.
She says she would spend less if she didn't buy a Novartis
anti-flea drug called Program, which sterilizes fleas that suck a
dog's blood. But whenever she uses a cheaper, traditional spray,
the dogs run for the nearest pond and stay there until the
product has rubbed off.
Novartis's animal-health sales rose 11 percent in 1997 to
893 million Swiss francs ($660 million), boosted by Program and
Clomicalm, the treatment for separation anxiety. Clomicalm was
introduced in Europe last year and Novartis plans to roll it out
in the U.S. in 1999 after the U.S. Food and Drug Administration
this week said it had found the drug safe and effective.
Other drugmakers are looking to benefit from the trend.
Increased Interest
Bayer, which bought Pharmacia and Upjohn Inc.'s animal-
health division in 1997 for an undisclosed sum, last year said it
expects its sales of animal-health products to grow 20 percent to
2 billion deutsche marks ($1.2 billion) this year. The company,
Germany's second-largest drugs and chemicals maker, said it will
invest 1 billion marks in animal-health research over five years.
And Novartis, which ranks sixth in the world in veterinary
products sales, agreed in May to buy some of the animal-health
units of Grampian Pharmaceuticals Group of the U.K. Terms weren't
disclosed.
Though few drugs for humans can be directly used on pets,
drugmakers say research on the causes and cures of diseases in
people -- diabetes and osteoarthritis are two examples -- make it
easier to develop drugs for animals.
Clomicalm, for instance, is a serotonin re-uptake inhibitor
-- a class of drugs that includes Eli Lilly & Co.'s Prozac, the
world's best-selling antidepressant. Like Prozac, Novartis's
Clomicalm targets the actions of serotonin, a brain chemical
linked to feelings of well-being.
Cross-Species Synergy
As with humans, however, the drug is only part of the
treatment for dejected pets. It should be used to complement a
training program, veterinarians and regulators say. By easing
anxiety, Clomicalm '' makes the dog more receptive to learning
new, positive behavior,'' said Mark Hill, a Novartis spokesman.
''There's clearly a synergy between humans and animals and
we try to use that as much as we can,'' said a Pfizer spokesman,
Bob Fauteux. He added that the company was testing some of its
human cardiovascular drugs for use on animals.
Once the first stages of research are over, companies must
prove their pet drugs are safe and effective -- as they do when
they apply for sales clearance for human treatments.
There's one difference, however. Drugmakers must prove that
their pet products are safe and effective for every species for
which it will be prescribed.
''The advantage about drugs for humans is that you're
dealing with only one species: us,'' said Matthew Phillips, a
Wood-Mackenzie analyst.
--Marthe Fourcade in the Paris newsroom (331) 5365 5065/gi/jp/ms/
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