Merial expands NexGard plant in Brazil with $25M infusion

The animal health industry is seeing robust activity in Brazil these days.

Merial, Sanofi's ($SNY) animal health company, announced it is pouring $25 million into its Paulínia, Brazil, plant to increase the production of NexGard, the chewable flea and tick treatment for dogs introduced this year. It has already launched it in the U.S., Europe and Japan but is preparing for a global rollout. The plant in Paulínia will make products for 100 countries.

Just weeks ago, Brazilian veterinary product manufacturer Ouro Fino Saúde Animal Participações S.A. filed for an initial public offering. Ouro Fino didn't disclose the date or size of its filing with securities regulator CVM. If it goes through, it would be the first successful IPO in Brazil this year.

NexGard, which was approved by the FDA in 2013 to prevent and kill fleas and ticks and works for up to a month, contributed to Sanofi's strong second-quarter earnings reported last month. In the U.S., Merial's sales growth jumped 14%, up to $311 million, and first-half sales for the animal health business increased by 2.2%, up to $1.4 billion.

Merial will triple the current manufacturing capacity to include 1,950 square meters of additional production space and add new equipment. With work expected to be completed by early next year, the company plans to add 85 jobs, bringing its total workforce to more than 450, said Jorge Espanha, country manager of Merial for Brazil, Paraguay and Bolivia. "Merial is currently the largest exporter of veterinary products in Brazil," he said in a statement.

- read the release

Special Report: Top 10 animal health companies of 2013 - Merial