Ensuring proper poultry health
Lohmann Animal Health’s president and CEO explains how the company is addressing poultry health and other issues.
Dave Zacek has been involved in the U.S. poultry industry since 1962 when he managed a broiler producing company on the West coast. He has been involved with poultry biologics and pharmaceuticals since 1965 in progressively more demanding positions of responsibility. He resides in Maine where he is president and CEO of Lohmann Animal Health.
Egg Industry: Dave, please share with us your background and extensive participation in the U.S. poultry industry.
Dave Zacek: In 1962, I managed Randall’s Poultry, at that time the largest broiler integration in Washington state. In 1965, I moved into selling vaccine, feed additives and pharmaceutics for the industry leader Salsbury Laboratories located in Charles City, Iowa, covering the mid-West and the West coast. In 1985, I was appointed as the poultry business director of Salsbury Laboratories. When the company was acquired by Solvay Animal Health in 1990, I moved to Minneapolis in the same position, responsible for all functions of the poultry business worldwide. In 1995, following the sale of the division by Solvay, I became President of Megan Health which was established as an R&D company with a strong focus on molecular biology. The lead poultry product was Megan Vac which is still used to protect flocks against Salmonella. In 2000, I was appointed as president of Lohmann Animal Health International. This required efforts to consolidate and restructure Vineland Laboratories, Maine Biological Laboratories and incorporation of the TAD brand into the Lohmann AviPro product range for worldwide distribution.
EI: What challenges currently confront the U.S. biologics industry?
DZ: Market demands are changing from strictly prevention of disease to incorporate food safety. We must appreciate that public perceptions of intensive animal production are not entirely favorable. Our industry mindset must adapt to current realities in order to progress.
EI: What changes have you observed over your 40 year career in the animal health industry?
DZ: Big Pharma has spent the last three decades shedding veterinary businesses including poultry biologics manufacturers. The trend now is back to ownership by the major multinationals. This bodes well for the availability of funds for R&D and future expansion. The downside is that our industry must show a return to corporate managers and shareholders who have little concept of the scope and competitiveness of the poultry industry. This could present challenges relating to resource allocation and recognition.
EI: Are there any benefits from the trend towards consolidation?
DZ: Increased availability of resources and personnel will speed the development of a wider range of genetically-engineered vaccines. This will improve safety of biologics compared to conventional live attenuated vaccines which create problems of reversion and emergence of variants. New products will hopefully enhance immunity.
EI: What challenges face the biologics industry through regulation?
DZ: Currently we have two global regulatory controllers, the USDA and the EU GMP system. While the products controlled under both regulatory regimes are difficult to differentiate in terms of type and function the processes by which they are manufactured differ significantly. Despite years of attempting to harmonize regulations we have made little progress in two decades. This inhibits access to potentially beneficial products for the world’s poultry producers and the cost of developing avian vaccines is increased as a result of complying with two sets of standards. Many in the industry consider the differences are primarily barriers to trade and cannot be justified by either science or technology.
EI: What trends have you observed in vaccination technology over the past twenty years?
DZ: During the past two decades, aerosol and in ovo application techniques have been successfully introduced to the poultry industry, especially for broiler production. Mass application of effective vaccines is now a reality. We should be able to simultaneously administer multiple vaccines which stimulate and maintain immunity to prevent re-handling flocks.
EI: How is your company responding to escalation in production costs?
DZ: Recently we have experienced significant increases in the costs of SPF eggs, sterile oil, packaging materials, energy and transport costs. We have attempted to raise our average selling prices by addressing specific segments of our market. We have withdrawn from countries with extreme competition or historically low prices. We have deleted vaccines from our range that generated low returns or which represent small volumes.
EI: You noted trends towards consolidation previously. What are the advantages of ownership by a multinational?
DZ: Higher critical mass usually means more economical production. Larger enterprises support higher R&D budgets and provide access to a pool of highly trained specialists. Large companies can support relatively higher R&D budgets especially long- range projects and have more sophisticated marketing capabilities.
EI: What are the disadvantages?
DZ: A poultry biologics subsidiary may be in a disadvantageous position within a large multinational company since it must compete with more profitable and faster growing companion animal businesses. Poultry biologics subsidiaries are expected to generate cash in the short term. These funds are frequently diverted into the development of products for companion animals which have a higher potential market demand and profitability.
EI: What future products do you envision?
DZ: We will see more bacterial-based recombinant products for food safety. These may include effective vaccines to suppress multiple stains of salmonella, campylobacter and E.coli. We may also see a new range of recombinant bacterial vaccines to prevent pasteurellosis, colibacillosis and mycoplasmosis. Recombinant viral vaccines are undergoing refinement and improvement. Now that some products have been introduced onto the market, it is expected that the range will expand. We will also see improvement in vaccine production using cell lines to replace SPF eggs. Perhaps we will make greater use of bioreactors for faster and more efficient vaccine production.
EI: What is your long-term vision for the biologics industry in the U.S.?
DZ: Most significant disease challenges have been successfully addressed by existing biologics. The future will see refinement and improvement in safety, efficacy and production cost. The growth area for avian vaccines will shift from disease control to food safety. Coccidiosis vaccines will gain market share at the expense of feed additive synthetics and ionophores. More effective control of clostridial enterotoxicities including necrotic enteritis and botulism will facilitate adoption of both conventional and precocious oocyst vaccines.
EI: Is there any message that you would like to convey to our readers?
DZ: Many participants in the present poultry biologics businesses have recently been subject to acquisition or are take-over candidates in the near future. There is a high degree of anxiety based on job tenure, reporting responsibilities and changes in corporate culture. If our specialists in vaccine development, production and marketing have the courage to remain in the industry and adapt to new regimes, they will prosper. In many cases fear will be replaced by relief as resources become available and greater support is provided within more efficient corporate structures.
EI: Thank you.