FEED Business Worldwide - January, 2011
Merial - Driving innovation & excellence in animal health
by NG Zhongming
Evolving livestock diseases demand constant innovation from scientists working in universities, government institutions and companies. Recent years have seen Merial introduce innovative avian and swine vaccines and the going forward, the company intends to build on these advances.
Company history & challenges
A wholly-owned subsidiary of Sanofi-Aventis, Merial Limited was established in 1997. It currently has operations in over 150 countries, making it a true global partner for the animal health sector. With its extensive network of 16 manufacturing sites and eight R&D centres worldwide, Merial is committed to its drive towards excellence and constant innovation.
And today's livestock industry requires a constant stream of advances. For, despite many eradication efforts, classic swine diseases remain prevalent in Asia. At the same time, new diseases such as Porcine Circovirus 2 (PCV2) and Porcine Respiratory and Reproductive Syndrome (PRRS), which originated in Europe and North America, have since found their way to Asia, making matters more complicated.
Alongside such new threats, Classical Swine Fever, E. coli infections, Aujeszky's Disease, Actinobacillus Pleuropneumonia, Mycoplasma, and Foot and Mouth Disease continue to pose great threats to traditional pig farming. China and Indochina, in particular, have suffered from sporadic outbreaks of new, emerging diseases, such as PRRS. In South Korea, the emergence of Porcine Epidemic Diarrhea (PED) has impacted developed pig farms. More recently, PED has started affecting tropical countries such as Thailand, the Philippines and Vietnam.
Meeting Asia's livestock health challenges
In response to these challenges, "Merial has well-established products for classical diseases, such as PESTIFFA for Classical Swine Fever and Hog Cholera," said Andy Choy, Merial's director of business operations Asian countries. "We are also particularly well equipped to help with newcomers such as PCV2, a disease that seemed to come from nowhere in the mid-1990s. Merial scientists and veterinarians helped to identify the virus that causes the disease, which was killing up to 60% of some pig litters. Merial's CIRCOVAC was the first PCV2 vaccine for sows to protect piglets from birth to slaughter."
When it comes to poultry, Newcastle Disease, Infectious Bronchitis, and Infectious Bursal Disease (IBD) are still the most common diseases found in Asia. Various vaccination programmes are well established, but as infectious diseases evolve, they demand constant innovation from scientists working in universities, government institutions and companies like Merial.
An innovation here has been Merial's award-winning VAXXITEK HVT + IBD, a vector vaccine that tackles the two most prevalent avian diseases around the globe; IBD and Marek's Disease. Choi explains that, "VAXXITEK HVT + IBD has demonstrated conclusively that the best vaccines not only protect but make a big difference to lowering poultry production costs. This is, of course, a huge driver for producers,"
Furthermore, with the rise of modern Asian agribusiness, the nature of disease protection is also changing. Large Asian poultry integrators are moving vaccination from the field into the hatchery. They are looking for life-time protection from single dose vaccines that can be administered to day-old chicks or in-ovo [through the egg shell].
These new approaches carry advantages with them. Vaccinating in the hatchery is far less labour intensive and reduces the inevitable human errors that occur with vaccination in the field. Not only has Merial developed vaccines like VAXXITEK HVT + IBD to facilitate this move, the company also offers both qualified staff expertise and advanced equipment for in-ovo and subcutaneous vaccination.
Developing Asian R&D capability
To help livestock producers address emerging livestock health challenges, the company commits its strength to advancing vaccine technology through investments in research and development.
Merial takes pride in having a reputation that is second to none when it comes to developing new veterinary products. In recent years, innovative vaccines have been introduced in Asia for both the swine and avian sectors and there is every intention for the company to build on these advances. Choi confirms that, "Development of new swine vaccines against PCV2 and Mycoplasma are well underway."
He adds that, "A major investment to support our avian business will be a new R&D facility sited at the Merial factory in Nanchang, China. A state of the art laboratory is to be built that will be home to a team. By 2013, it will provide all the R&D support that is needed to get Merial products registered and manufactured in China. No other overseas animal health company is making such an investment. In the meantime, the R&D team will be working in a rented lab in the Shanghai area."
At the same time, given the diverse nature of livestock health, Merial also accepts that its own resources can never cover all possibilities. Besides internal R&D to generate and test new vaccine candidates, Merial has collaborations with external public and private institutions. For example, in China, Merial has an agreement with a leading national centre for swine diseases, located at Huazhong Agricultural University. The emphasis there is exploring the key factors associated with co-infections with various swine viral and bacterial pathogens.
Emphasis on Asian markets, joint ventures
With much to achieve up ahead, Merial recognises Asia to be one of the regions on which the company places great emphasis. "Driven by the rising human population and increasing disposable income, Asia is very important to Merial, especially when it comes to swine and poultry," said Choi. "Pork remains the most popular meat and (with) local production, a steady increase in demand has been seen in Vietnam, Philippines and Thailand."
In Asia's swine sector, a trend away from backyard farming and towards commercial and integrated operations represents a huge opportunity for Merial, as the company's swine vaccines are targeted towards commercial operators. Moreover, with AGP bans become more prevalent, vaccines are becoming a more acceptable solution to disease control than antibiotics.
Similar to pork, poultry production is consolidating, with farm sizes surging and full integration the order of the day. In this livestock line, Choi states that, "Merial is particularly strong in the broiler segment. Our high-technology vaccines, such as VAXXITEK HVT + IBD, are geared towards the hatchery, as poultry again offers great opportunities." He adds that, "The livestock picture in the region is of fewer, but larger, key accounts and Merial has to meet expectations on price and volume, not just quality."
Moving ahead, Merial is looking at an expanded market share via a proposed joint venture with Intervet/Schering-Plough, which could generate more than US$5 billion in annual sales before divestments. The formation of this new animal health joint venture is subject to the execution of final agreements, antitrust reviews in the US and EU, as well as customary closing conditions.
Regarding the upcoming merger, Choi explains that, "Merial and Intervet/Schering-Plough are largely complementary businesses both geographically and in product terms. The new joint venture, Merial-Intervet, will offer the broadest portfolio of animal health products and services. The combined R&D capabilities will lead to accelerated discovery of products and solutions for the unmet needs of veterinarians, pet owners and producers/farmers." He is confident that the new joint venture will have the ability to capitalise on growth opportunities in all fields and in all parts of the world.
With its successful history, strong R&D base, global network and technical collaborations, this company finds itself uniquely positioned: Merial's unique core competencies enable it to keep with and meet the transforming needs of Asia's fast growing livestock industry.
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