Vectra flea and tick preventives made by Summit VetPharm soon will be sold under the brand name CEVA, but the line still will be sold exclusively to veterinarians. Company officials pledge to continue aggressively guarding against diversion of the product to outside channels.
Summit VetPharm LLC was acquired this week by the veterinary pharmaceutical company CEVA, headquartered in France. Summit, a start-up in 2007, had been a subsidiary of Sumitomo Corp. of Japan. Sumitomo retains a 30-percent interest, while CEVA owns 70 percent. Officials declined to disclose the purchase price.
In the hotly competitive topical parasiticide market for dogs and cats, Summit made a name for itself within the veterinary community by not only promising to sell Vectra solely to licensed practitioners but by backing up that promise through its use of tracking technology. Summit deployed a system known as “Bloodhound” to ensure that Vectra isn’t sold through outlets such as online pharmacies and big-box retailers.
That won’t change, according to Brad Butler, chief of operations for CEVA Animal Health, Inc.
“We are committed to the Bloodhound technology and committed to supporting products that require and enhance the veterinarian-client-patient relationship,” Butler said.
Julia Stephanus, president and CEO of Summit VetPharm, said the same in a letter dated Aug. 26 to veterinary hospitals that carry Vectra products. “Every package of the Vectra brand products are, and will continue to be, protected by Bloodhound Technology to ensure veterinary exclusivity and product authenticity,” the letter reads in part. “The marketing programs, pricing, pharmacovigiliance and customer support services currently in place will remain...”
Stephanus told the VIN News Service that a relationship between Summit VetPharm and a multinational animal health partner was envisioned and pursued from the company’s earliest days.
That’s because Sumitomo, a conglomerate with vast interests including energy, metals, minerals, real estate, food, agriculture and telecommunications had entered the animal-health realm only in 2004 with the purchase of The Hartz Mountain Corp. Summit was born three years later, following the development for veterinary use of the compound dinotefuran, the signature insecticidal ingredient in Vectra.
“We were (Sumitomo’s) first exposure to the animal-health world,” Stephanus recounted, “and they absolutely love it ... but realized we would do better with a partner. They really needed someone who was dedicated to the animal-health arena and had a presence globally in these other markets.”
The alternative, to start new companies in other countries to sell the single product line, would take too long and be too expensive, Stephanus said. “Once they realized that, they had me look for partners. CEVA was the best.”
Butler said Vectra’s fast-growing market share was a big attraction for CEVA. Vectra has 6 percent of the $1 billion wholesale U.S. companion animal parasiticide market, according to Stephanus.
Like other “spot-on” treatments designed to prevent infestations of fleas and other disease-carrying insects on cats and dogs, Vectra is applied to the skin of the pet once a month. Vectra comes in three formulations: Vectra 3D for dogs, which kills fleas, ticks, mosquitoes, lice, mites and sand flies; and Vectra for dogs and puppies, as well as Vectra for cats and kittens, both of which kill fleas.
The same product line is sold by Banfield, The Pet Hospital, the nation’s largest veterinary hospital chain, under the private label name First Shield.
Hartz, which markets a variety of pet supplies, including old-fashioned flea collars, directly to pet owners, is not part of the transaction; it remains under Sumitomo ownership.
The sale of Summit VetPharm to CEVA appears to follow a recent pattern of consolidations within the veterinary pharmaceutical industry — 2009 saw the merger of Pfizer with Wyeth/Fort Dodge and Merck with Schering-Plough/Intervet, for example. But Stephanus said this transaction was motivated by different reasons.
“This acquisition comes from wanting to do more for animal health rather than as a consequence of big pharmaceutical parents merging to improve their overall bottom lines. At CEVA we are 100-percent dedicated to animal health,” she said.
CEVA, which identifies itself as the ninth largest veterinary pharmaceutical company worldwide, is privately held and largely employee-owned. According to the company website
, CEVA was founded as a subsidiary of Sanofi-Aventis and originally named Sanofi Sante Nutritional Animale. In 1999, the management conducted the first of three leveraged buyouts and renamed the company CEVA Sante Animale. With the completion of the latest leveraged buyout in 2007, management and employees gained a majority share.
Stephanus said CEVA has been growing rapidly, having made 14 acquisitions since 2000. In the United States, Summit VetPharm is CEVA’s third acquisition, bringing its total U.S. workforce to about 300. CEVA’s first and second purchases in the United States were Biomune, a poultry vaccine manufacturer, in 2005; and Butler Sales Associates, a distributor of companion-animal products, in 2007.
Because the American side of the company is relatively small, Stephanus said she anticipates that the merger will entail few or no layoffs.
Specifically, Summit VetPharm will be folded into CEVA US, based in Lenexa, Kan. “We were a growing company and they were a growing company and we need each other,” Stephanus said. “We can easily integrate the ... organizations.”