The animal vaccine agency all set for income enhance: MIDAS SHARE TIPS

Pigs are thirsty creatures. Adult sows drink up to 50 pints of water a day in hot weather and even piglets down three or four pints daily.

 Farmers need to monitor these habits closely, not just to make sure herds remain hydrated but also because medicines are increasingly administered in farm animals’ water.

Aivlosin is one such product. The antibiotic treats pigs and chickens suffering from respiratory and gut diseases and it is made by Aim-listed Eco Animal Health.

Pig news: Eco Animal Health has developed an antibiotic for porcine respiratory diseases

Eco Animal Health can trace its roots back to the early 1970s and joined Aim almost 30 years ago. 

There have been many ups and downs since then but today the company is firing on all cylinders, under the capable leadership of David Hallas, a qualified vet with three decades of experience in the animal health market.

The industry is sizeable. Already worth almost £50billion a year, sales of animal health products are projected to increase by around 9 per cent annually between now and 2030, driven by growing attention to animal welfare, fears about diseases spreading to humans and new, improved drug launches.

The market is also expanding as people around the world eat more meat, particularly chicken and pork. Poultry and swine are Eco Animal Health’s main areas of focus, both with Aivlosin and a string of other products, including several expected to go on sale from next year.

Aivlosin is a leader in its field, well known in farming circles and sold in some 70 countries including China, Japan, Canada, the US and Mexico. 

The drug also counters concerns about excessive use of antibiotics among animals, a key factor in rising resistance in humans. According to the World Health Organisation, some 80 per cent of antibiotics taken by animals promote healthy growth, rather than treat disease.

Aivlosin is in a different category. The drug is administered only for a short period, dosage is minimal and it is only given when animals are truly sick.

Pigs and chickens, like children, often develop colds in winter or when the temperature changes suddenly. They go off their food, behave in a lacklustre fashion and become feverish. They will also cough.

Sophisticated farmers can install AI-powered microphones in barns that relay information when coughing increases beyond a certain level. Infrared technology exists as well to check animals’ temperatures if they seem unwell.

Most farmers tend simply to observe their livestock, knowing through experience when antibiotics are needed. As a low-dose, highly effective medicine, Aivlosin has been gaining market share from older rivals and is expected to continue in that vein, particularly as the drug improves gut health and is thought to boost animals’ immunity too.

Eco Animal Health isn’t a one-trick pony, however. Preventative medicine is a growing trend in the animal world and Eco’s rich pipeline of drugs fits into this category, including two vaccines due on the market in 2025.

The first is designed to prevent hens from catching a disease that affects their joints and ovaries, which causes them to move less freely and lay fewer eggs. Farms can house thousands of chickens, disease can spread rapidly through a flock and hens produce up to 500 eggs in their lifetime, so laying issues can prove ruinous for farmers. Many have already expressed interest in Eco’s work and demand is likely to increase from here.

The second drug aims to stop chickens from catching pneumonia or other severe respiratory infections, which can have devastating consequences.

Combined sales of these vaccines should approach £30million annually and a number of others are likely to come on stream between now and 2030, for both chickens and pigs.

Hallas and his team are working on high-tech targeted drug therapies too, including treatments for PRRS, a respiratory disease which can cause infertility among sows. The illness is one of the most damaging to hit the porcine 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 £90million, rising to £93million this year and more than £100million in 2026. Profits are increasing too and the pace of growth should increase as new drugs come on stream.

Midas verdict: Eco Animal Health has been through tough times but long-term prospects are robust, as CEO David Hallas has ambitious plans for growth and is on track to deliver them. At £1.23, the shares are a buy.

Traded on: Aim Ticker: Eco Contact: ecoanimalhealth.com