Pigs are thirsty animals. Adult sows drink up to 20 liters of water a day in hot weather and even piglets drink 1 to 2 liters a day. Farmers need to closely monitor these habits, not only to ensure herds stay hydrated, but also because more and more medications are being administered into the water of farm animals.
Aivlosin is one of those products. The antibiotic treats pigs and chickens suffering from respiratory and intestinal diseases and is manufactured by companies listed on the AIM stock exchange. Organic Animal Health.
Eco Animal Health traces its origins back to the early 1970s and joined Aim almost 30 years ago. Since then, there have been many ups and downs, but today the company is running at full capacity, under the capable leadership of David Hallas, a qualified vet with three decades of experience in the animal health market.
The industry is considerable. Sales of animal health products, already worth almost £50bn a year, are forecast to rise by around 9 per cent a year between now and 2030, driven by growing attention to animal welfare, fears about the spread of diseases to humans and the launch of new and improved medicines.
The market is also expanding as people around the world eat more meat, especially chicken and pork. Poultry and pigs are Eco Animal Health’s main areas of focus, both with Aivlosin and a number of other products, including several expected to go on sale starting next year.
Swine news: Eco Animal Health has developed an antibiotic for swine respiratory diseases
Aivlosin is a leading drug in its field, well known in agricultural circles and sold in about 70 countries, including China, Japan, Canada, the United States and Mexico. The drug also counters concerns about overuse of antibiotics among animals, a key factor in the rise of resistance in humans. According to the World Health Organization, about 80 percent of the antibiotics animals take promote healthy growth, rather than treating disease.
Aivlosin belongs to a different category. The drug is administered only for a short period, in minimal doses and only when animals are really sick.
Pigs and chickens, like children, often catch colds in winter or when the temperature changes suddenly. They stop eating, behave apathetically, and have a fever. They also cough.
Sophisticated farmers can install AI-powered microphones in barns that transmit information when coughing increases beyond a certain level. There is also infrared technology to check the temperature of animals if they appear unwell.
Most farmers tend to simply watch their livestock, knowing from experience when antibiotics are needed. As a highly effective, low-dose drug, Aivlosin has been gaining market share against older rivals and is expected to continue in that vein, particularly as the drug improves intestinal health and is also believed to boost immunity in animals.
Eco Animal Health isn’t limited to just one trick, though. Preventive medicine is a growing trend in the animal world, and Eco’s rich portfolio of medicines fits into this category, including two vaccines due to hit the market in 2025.
The first is designed to prevent hens from contracting a disease that affects their joints and ovaries, causing them to move less freely and lay fewer eggs. Farms can house thousands of chickens, disease can spread quickly through a flock and hens produce up to 500 eggs in their lifetime, so laying problems can prove ruinous for farmers. Many have already expressed interest in Eco’s work and demand is likely to grow from here.
The second drug is intended to prevent chickens from contracting pneumonia or other serious respiratory infections, which can have devastating consequences.
Combined sales of these vaccines should reach £30m annually and others, for both chickens and pigs, are likely to be manufactured between now and 2030.
Hallas and his team are also working on high-tech targeted drug therapies, including treatments for porcine reproductive and respiratory syndrome (PRRS), a respiratory disease that can cause infertility in sows. The disease is one of the most damaging to have hit the pig community, and if Eco finds an effective cure, sales could prove transformative for the group.
Group sales for the year to March 2024 are forecast at almost £90m, rising to £93m this year and more than £100m in 2026. Profits are also rising and the pace of growth should increase as new drugs come on stream.
Midas Verdict: Eco Animal Health has been through some tough times, but the long-term outlook is strong as CEO David Hallas has ambitious growth plans and is on track to deliver on them. At £1.23, the shares are a buy.
Listed in: Aim Heart: Echo Contact: ecoanimalhealth.com