COVID-19 - Animal health companies react to unfamiliar and tough circumstances

Read below an article taken from our Animal Health platform dated 23/03/20.

Many animal health businesses around the world are complying with local government recommendations for social distancing with flexible work arrangements.

Myriad questions remain unanswered regarding the impact of COVID-19 on the purchasing power of pet owners and farms, as well as the coronavirus' influence on the pork industry's recovery from African swine fever. In the meanwhile, the animal health industry is focused on maintaining an unbroken supply of products.

Candioli Pharmaceuticals is an animal health business based in northern Italy - an area heavily impacted by the coronavirus crisis. The company's pharmaceuticals and nutraceuticals for companion animals are available in around 50 countries globally.

Managing partner Luca Cravero Candioli told Animal Pharm the firm has been impacted by the ongoing COVID-19.

He said: "The Italian market has slowed down significantly. Clients probably prefer to use their actual stock - in particular, wholesalers - lowering their level before re-ordering. International markets do not seem to have slowed down."

Candioli recently drew up a plan to let most of its office-based employees to work from home, while the company's manufacturing workforce remain at its production site near Turin.

Mr Candioli remarked: "We check the body temperature of each of us on a daily basis. If somebody is above 37.5°C, he/she will not be let in. Everybody is wearing face masks if the distance among people is less than one meter. We strictly implemented and follow the guidelines released by our authorities."

The company has also asked its colleagues at Vetark - its UK subsidiary - to adhere to measures regarding COVID-19 vigilance, even though these guidelines have not yet been implemented in UK.

Mr Candioli said the businesses is still persisting with its R&D work, although projects involving local academia universities are "slowing down due to the fact all universities have closed". He also pointed out the major domestic animal health companies in Italy - including branches of the multinational players - have been coordinating their tactics to maintain business as normal.

CZ Vaccines is headquartered in Spain - another country on lockdown.

The firm's corporate business development manager Jorge Rodríguez-Quintana Sández said to Animal Pharm: "The government of Spain decreed a state of alarm last week motivated by the epidemiological situation. Our company must abide by the regulations established by the pertinent authorities, always prioritizing the health of our workers.

"Our priority is to guarantee the commitments acquired with our clients, while maintaining the continuity of our activity."

He said the firm is trying to minimize the effects on its daily activity, such as production and R&D, "to do everything possible to keep our commitments". A large part of the CZ Vaccines team has adopted teleworking.

"Given the uncertain situation that we are suffering, we are reviewing the situation day by day to act accordingly in the event of any significant changes," Mr Rodríguez-Quintana Sández added.

HealthforAnimals: "Ensuring a stable supply of safe, nutritious food and protecting the pets sharing our homes during this crisis is vital. Veterinary medicines and required tools for livestock production, such as animal identification products, are necessary to achieving this goal."

Marc Prikazsky - chairman and chief executive of France's Ceva Santé Animale - stated: "We face together an extraordinary situation where the world is going into lockdown to face the very real threat posed by COVID-19.

"I wanted to assure you Ceva is taking every contingent step possible, to firstly protect our own employees (and ensure they don't contaminate others) and then to make sure we continue to provide you our customers with the products, equipment and services essential to your operations.

"Our global manufacturing and supply chain is fully engaged in managing resources and shipments to and from our facilities. Thanks to our robust inventory planning, so far, we have had no impact on product availability. For our strategic vaccines and pharmaceutical products, we always carry several months of safety stocks.

"All our global manufacturing plants continue to run as normally as possible with the health and wellbeing of our workers being our primary concern. I would like to publicly thank them for their sense of civic duty in continuing to produce the animal health products our customers rely on."

Vet meds should be 'essential goods'

Global industry body HealthforAnimals has urged governments to support food supply by designating veterinary medicines as 'essential goods'.

It stated: "Ensuring a stable supply of safe, nutritious food and protecting the pets sharing our homes during this crisis is vital. Veterinary medicines and required tools for livestock production, such as animal identification products, are necessary to achieving this goal.

"HealthforAnimals and its members urge governments to confirm these products are 'essential goods' that can continue to cross borders even when restrictions or closures are implemented. This designation strengthens the global food system and our households as pet companionship will be crucial, especially for older, more vulnerable populations, during long periods of self-isolation."

HealthforAnimals said its member companies are working to ensure veterinary medicines continue to reach veterinarians, farmers and pet owners during the crisis.

The European Medicines Agency and the US FDA have yet to report any shortages of veterinary medicines.

AnimalhealthEurope commented: "As a responsible industry, our priorities are to stand by our customers - that is to say vets farmers and companion animal owners - and to support our members and their employees in taking all precautionary measures to ensure the health and safety of our people and their families.

"Our members continue to connect with veterinary and other customers, while following all relevant precautions to help reduce the spread of the virus, including phone and online technologies and avoiding face-to-face interactions and travel when non-critical."

US picture

The Animal Health Institute - the industry body in the US - stated: "Member companies are in contact with the US FDA's Center for Veterinary Medicine to keep the agency informed of any shortages or delays in production. At this time, no member companies have reported significant disruptions or shortages related to COVID-19."

Zoetis said there is currently no direct impact on its supply of products. The firm is closely monitoring the situation with distributors.

The company stated: "If the situation evolves, we have a robust 4-6 months inventory on key products. Border controls are evolving along with the situation, region by region. Zoetis has a well-established process to assess and act quickly on these developments and restore operations to normal levels and mitigate further impact to the business.

"Zoetis is monitoring all cargo movements and transportation lanes to ensure successful movement of goods throughout our network.

"All of our manufacturing sites around the world remain open. With the health and safety of our colleagues as our top priority, we are taking great care to ensure continuity at all our manufacturing sites. If we need to close a site, Zoetis will leverage its global network and work proactively to ensure manufacturing capabilities meet customer needs."

The firm has plans to bolster its inventory and product availability through:

• Increased inventory positions for all aspects of our supply chain - finished goods, active ingredients and supporting components;
• Deployment of inventory from regional hubs to market-specific warehouses; and
• Enabling field sales and technical representatives to be available remotely.

From the perspective of a smaller company, Kindred Biosciences gave its point of view on COVID-19 during a recent analyst call.

"We haven't seen any disruption just yet," commented founder, president and chief operating officer Denise Bevers. "However, it may impact some of our clinical trial enrollment and potentially some temporary sales with owners sequestering and not going to the vet as often."

Elanco advice for pet owners

Elanco said its manufacturing network is fully operational. The company is taking extra precautions to protect its team and continuity of supply.

The company remarked: "We have contingency measures in place, we maintain safety stock supplies and, in some cases, have secondary sourcing options in place if needed to help prevent supply disruptions.

"Ensuring the health and safety of our employees is our top priority. We are following all government regulations and taking appropriate measures to keep our employees safe and preventing the spread of COVID-19, including restricting travel and instituting remote working arrangements for those beyond the labs and manufacturing sites."

The firm also said its R&D pipeline "continues to move forward and plans are progressing".

Tony Rumschlag - Elanco's director of consulting veterinarians for companion animals - allayed fears regarding pets missing their latest vaccines.

He noted: "Vaccine protection doesn't suddenly expire when they are due for renewal. So, while it's not ideal, the risk of delaying a vaccine renewal by a few weeks or even a couple of months is minimal.

"If you were intending to place your pet in a boarding facility or travel with them, it would be more critical to have documentation that the vaccines are current but in the pandemic environment, that should not be the concern. Just ensure that your pet's protection gets updated once businesses resume normal operation."

Dr Rumschlag also recommended: "Any routine medications, food and supplies are the most important items to have on hand. For instance, ensure your pet won't run out of monthly heartworm or intestinal parasite products. This would include flea and tick medications, as the weather is starting to warm up in many geographies.

"If your pet has any chronic or recurrent condition, such as diabetes, persistent allergies or recurrent ear infections, you should ensure that you have medications on hand to manage these conditions through the next several weeks."

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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.