Annual Report & ACCOUNTS for the year ended 30 June 2014

HYR 2014

Osphos Case Study

Case Study: Osphos

Pipeline Delivery Icon

Osphos (clodronate injection), a novel equine product, has received approval from the US FDA and the UK Veterinary Medicines Directorate (VMD) and is expected to be launched at the beginning of our new financial year.

The product is an intramuscular injection used to control the clinical signs of navicular syndrome, estimated to cause a third of all forelimb lameness in horses. There are several benefits to the product relating to its efficacy, safety and relative ease of administration by the veterinarian.

The opportunity was first identified by our Business Development team who developed a relationship with a German veterinarian, the inventor. He had an excellent proof of concept study, enabling us to feel confident that the drug would be both safe and efficacious.

After evaluating the market potential, our Marketing teams decided that this product represented a strong addition to our equine portfolio. On this basis we reached a commercial agreement and designed the development project.

Following the dose characterisation study, we conducted a multi-site clinical field study to evaluate the effectiveness of Osphos. After completing all our development activities and preparing a registration dossier, we filed successfully in the UK and US.

However, in Europe, where horses are considered a food-producing animal, we required additional information about the product's maximum residue limit (MRL) to establish the safety of the product for a human consuming horse meat. The approval application for the EU has now been submitted.

Manufacturing presented the single greatest challenge for the approval of Osphos. As neither of our manufacturing sites has FDA approval for manufacturing aseptic fill products, manufacturing has been contracted to an outside firm.

Osphos is one of many projects that show our strategic focus on pipeline delivery, as well as demonstrating our ability to work effectively with the authorities to deliver products with clinical benefits that complement our existing portfolio.

Our launch plans in the US and UK are ready and Osphos will be available in the first half of our 2015 financial year. We are eagerly anticipating the launch of this new major product.

Vetoryl Case Study.jpg

Case Study: Vetoryl

Portfolio Focus Icon

Vetoryl (trilostane capsules) is the only licenced product for the treatment of canine hyperadrenocorticism or Cushing's syndrome. It is sold internationally and recognised globally for its efficacy. With the possibility that Vetoryl may experience increased competition in the future, and due to a slow down in growth in a number of countries, it became important to strengthen our current global market position.

In order to do this, a new international marketing campaign has been developed to reposition Vetoryl, aiming to create a higher emotional engagement with veterinarians, and strengthen Dechra's position as the leading experts in endocrinology.

The campaign's theme reflects the key end benefit of Vetoryl: restoring life at every level. The positive effects of the treatment are often felt by the owner as well as the dog, helping to restore life and vitality whether they are on four legs or two.

The integrated campaign delivers a range of support for the vet, pet owner and Dechra's sales teams. It includes advertising, flowcharts for diagnosis and treatment, sales aids, and pet owner booklets. Case studies are also included that have been developed with several European key opinion leaders.

The campaign will be launched across all European markets over the forthcoming months.

We have a clear campaign strategy. Our objective is to be seen as the experts in endocrinology. Vetoryl gives veterinarians and pet owners complete control. It can turn back time as a dog recovers its vitality and its life is restored.

The values attached to the brand are very clear: efficacy, control and innovation. This is supported by scientific and technical excellence.

The campaign is targeted at veterinarians who place high importance on quality of life and see endocrinology as a satisfying discipline.

Our customers will feel informed and empowered. And our people will feel proud and motivated.

Cardisure Italy Case Study

Case Study: Italy

Geographical Expansion

By 2013, DVP EU had a sales and marketing organisation in every major European market with the exception of one, the c.€650m Italian market. Dechra's product portfolio was already established in Italy, with over 20 product licences covering multi-species in both CAP and FAP which were exported to and sold by eight distribution partners.

However, to deliver on our strategic pillar of geographical expansion, we recognised that this market offered unexploited potential. We believed that with our own sales team focusing solely on our own portfolio, we could increase sales and capture the whole margin.

The Italian system sees independent, self-employed sales agents work with product manufacturers and distributors, receiving commission as a percentage of sales. This meant that only a small 'back office' team, led by a country manager, would be needed. The costs of establishing this team would be more than covered by the increased sales we believed our team could generate and the higher margins achieved by cutting out the distribution middle man.

We recruited a country manager and a number of staff who had previously worked for Janssen Pharmaceutica, a company that had distributed Dechra products for a number of years in Italy.

These new members of the Dechra Italian team have excellent experience (selling Dechra products for over ten years) and vital knowledge of the local market, ensuring the establishment of the new entity was a smooth process.

Dechra's sales and marketing team in Italy began selling on 1 March; the phasing out of the eight distribution partners is ongoing.

Phycox Case Study

Case Study: PSPC Inc.

Acquisition Icon

In May 2014 Dechra acquired the trade and assets of PSPC Inc., a Florida US based business, to enhance our product portfolio. As is often the case in business development, the first contact was made 15 months earlier. We started the initial discussions to acquire the business at a world veterinary congress (NAVC) in January 2013 as we had recognised that PSPC's principal product would be an excellent addition to our portfolio and add further critical mass to our US business.

The principal product of the business, Phycox, is a patented nutraceutical prescribed by veterinary surgeons as a supplement for dogs and horses with osteoarthritis and poor joint health. Phycox contains glucosamine, MSM, creatine, antioxidants and phycocyanin. Phycocyanin is an extract from blue-green algae that has a patent which supports its use as a COX-2 selective agent that alleviates pain and inflammation without the side effects which occur with NSAID that are not COX-2 selective. The use of phycocyanin is unique to Phycox and provides us with a significant marketing advantage in a market estimated to be US$55 million.

Phycox is available in a range of formulations suitable for dog breeds of all ages to support healthy joints as well as muscle and bone health. There is also a pack presentation indicated for horses, which is complementary to our equine product sector. Our initial marketing objective will be to increase the adoption of the product by new veterinary practices. Historically the product was sold through approximately 3,000 practices. By including Phycox in our basket of marketed products, we could potentially access most US veterinary clinics.

We were also keen on acquiring the business as it had other products in development, including a chewable canine product which is comparable to our European market leading brand, Forthyron, for the treatment of endocrine disorders in dogs. The product, to be branded Levocrine™ in the US, will be launched in the second half of our 2015 financial year and will be an excellent complementary product to our successful endocrine range.