Monday, July 14, 2014

As Predicted Right Here, Zilmax® Not To Return To US Market Until 2015 (At The Earliest).

It would seem that -- as I predicted, in March and April of 2014 -- Merck will NOT be able to reintroduce zilpaterol before 2015, in the US. It further seems that Tyson and Cargill have repeatedly indicated they won't buy (from the feedlots) the supposed 250,000 head of cattle which were to be fed Zilmax® -- as part of the reintroduction study. But candidly, that was pretty clear, even last Fall. [More background here.]

From tonight's online Wall Street Journal, then -- do go read it all:

. . . .Merck has delayed plans to begin its field evaluation because of continued unease among Cargill Inc., JBS SA, Tyson and other meatpackers about animal welfare, as well as some packers' reluctance to try to market the beef that would be produced during the research, according to people familiar with the matter.

Merck confirmed the study has encountered setbacks. "This has become more time-intensive than we anticipated," said David Yates, a Merck manager who helped design the planned study. He declined to discuss details of negotiations with meatpackers, but said: "We continue to work on the process to make sure we have alignment with all parties."

The research requires the support of feedlot operators, which fatten cattle for slaughter, and the meatpackers that buy and process them into steaks and ground beef. The three-largest U.S. beef processors — Tyson Foods Inc., Brazil-based JBS and Cargill — account for about 60% of total production, according to industry estimates. JBS also operates one of the world's largest feedlot operations in the U.S.

Mr. Yates declined to specify a new target time period to begin testing Zilmax on cattle. . . .

While the brand sold about $156 million in 2012 -- its last full year on-market in the US -- I'd not expect anything like that, should it come back in the US, in 2015. Even at double that -- or $300 million -- it would remain definitively immaterial to Mother Merck. So it may well be that Merck will concede this market to Lilly (via its Elanco Optaflexx® brands) -- as the clear No. 1 leader, in the US space, now.

No comments: