Tom’s spotted a new investment trend.
Every couple of years, biotech suddenly changes direction and colonises a new industry. At first, biotech was confined to creating new and better medicines for people. But then it changed direction. Then scientists started applying what they’d learned to completely new areas, like crop science. And later, biotech was put to use in industry.
Tom’s spotted the next big industry about to be disrupted by biotech. He’s dedicating the next couple of issues of Breakthrough Biotech Alert to the topic (if you’re interested in what Tom has to say, click here to read more about Breakthrough Biotech Alert.
So for Penny Sleuth readers only, here’s a preview…
The next biotech boom will happen in animal health
A guest essay by Tom Bulford
When I was a child we spent our summer holidays in Guernsey where the milk was rich and yellow and creamy, not the insipid stuff of today. And my uncle had a farm in Oxfordshire, with dairy cattle. They were placid, timid creatures happy to chew the cud all day long while also providing a useful weather forecast – when they sit down it is going to rain. But these days of my youth have been long lost to factory farming. A dairy cow is just a link in that ‘teat to pipeline solution’.
And it is not just cows. All farm animals are no more than biological factories that turn feed into meat – or milk. With the growing world population wanting more and more meat the pressure is on to make pastoral farming as efficient as possible. We can improve the grasses that animals eat, making them more nutritious and digestible. We can invest all sorts of food supplements to make the animals fat and healthy. We can tinker with the animals’ stomach microbiome – the mass of bacteria that that determines the way in which food is digested and metabolised.
This is not pretty. Another of my youthful experiences was working in a battery chicken farm. There the birds were reared from chicks to full grown chickens in just four months before being taken off to prepare for a life on the supermarket shelves. My job was to clear the mess off the floor, before the next batch arrived. I can still recall the smell…..!
We don’t like to think of the conditions in which animals live. We would rather accept the nonsensical ‘farm-fresh’ advertising of the food industry. But we know that animals are just meat factories. We know that animal welfare means little. We know that animals are fattened by antibiotics. We know that factory farmers will push the boundaries of legality in this ruthless industry.
We know that this is big business, and that we all rely upon it. Animal health is a multi-billion dollar global industry. When you add the market for domestic pets you can add a few more noughts on the end. And this industry has one great advantage. If animals die in process nobody really minds.
For years I have had an investment in Dechra Pharmaceuticals, which makes drugs for animals. This business has two great attractions. It can piggy-back off the work done to find drugs for humans. And it can prescribe them for animals without having to spend fifteen years and $2bn on clinical trials. If it all goes wrong and we end up with foot and mouth disease or avian flu, we just slaughter the creatures – simple as that.
So the animal health industry offers the growth of the human health industry but with none of the risks. No wonder that the global pharma giants are pondering a move into this business. Already there have been some take-overs and mergers and more are likely.
For example, AvonRubber has just acquired the Italian company, InterPuls. The latter makes ‘specialist milking components, including pulsators, milk meters, automatic cluster removers and vacuum pumps for state of the art milking systems’. In addition it is developing ‘high-technology sensors and devices to monitor the life cycle of a cow, analysing milk production, reproduction and health data to provide critical management information to increase operational efficiency of the farm’.
This is a natural subject for my biotechnology newsletter. Biotechnology is all about our ability to manipulate living things. It is the new industrial revolution and I am determined to find the best investments in the world of animal health.