The ALYX Market Survey Reporting. Series. Turning Data into Action. The Animal Health Industry s Leading Supplier of Actionable Business Intelligence

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1 The ALYX Market Survey Reporting The Animal Health Industry s Leading Supplier of Actionable Business Intelligence Series Turning Data into Action Chris Ragland, CEO Animalytix LLC

2 Animalytix Was Created to Address This Market Insight Gap for Manufacturers & Distributors The primary business objective for the development of the Animalytix business intelligence platform was to provide timely, geo-located sales information to make the market transparent for subscribing manufacturers and others with an interest in the animal health industry as well as the participating network of distributor data providers Market transparency is critical to allow markets to undertake rationale decision making, improve resource deployment and align compensation and resource investments with performance and opportunity Achieving this objective required the development of several novel methodologies one of which we will discuss today

3 * 500+ cow operations; major feed yard sand integrated pork producers The US Animal Health Market is Complex with More than 100,000 Points of Sale * Veterinary practitioners drive revenues exceeding $ 3.0 bln per annum while leading retailers drive substantial flea & tick sales Sales to beef, dairy and pork producers result in an additional $ 2.0+ bln in revenues primarily driven via OTC channels $ 450 mln in Equine purchases are split among OTC & vet channels On-line transactions total $ mln & growing Kmart, 1,327 Veterinarians*, 60,000 Livestock Producers*, 20,000 Target, 1,724 Tractor Supply*, 948 PetCo, 1,000 Pet Specialty, 6,450 Wal-Mart, 4,300 * Initial ALYX Target Markets Other Ag Retail*, 10,000 Pet Smart, 1,150 Property of Animalytix LLC / Copyright 2011 Animalytix LLC. All Rights Reserved.

4 Animalytix Uses Distributor Sales Data to Develop Market Insight Reports for Subscribers & Providers (Quarterly Share of Market by Segment per Territory) (Raw Transactions) (Aggregated Transactions) (Run Privacy Protocol) (Monthly Market Surveys with Privacy Rules Applied Dollars & Doses by Product ) Subscriber #1 Subscriber #2 Subscriber #3 Subscriber #4 Subscriber #5

5 The Animalytix Providers Network Include Sales Data from the Following Distributors: Animalytix Participating Distributors Animal Health International Miller Veterinary Supply 3 Valley Vet Supply Butler Schein Animal Health MWI Veterinary Supply Vet Med Center IVESCO 3 Nelson Laboratories 2 Veterinary Provisions, Inc. Jeffers Supply 1 Northwest Veterinary Supply Victor Medical Company Merritt Veterinary Supply PCI, Inc. 2 Webster Veterinary Micro Beef Technologies 2 PVP, Ltd. 4 Midwest Veterinary Supply Sioux Nation Ag Center 1 selected categories; 2 includes pre-acquisition history; 3 currently on-boarding; 4 data secured via bankruptcy auctio n Last updated March 27, 2013 Data transmissions provided daily or weekly by each Participant

6 The Animalytix Platform is Unique in its Ability to Deliver Geo-Located Business Intelligence 12,000+ Products 500 Manufacturers 400,000 + purchasers $42.0 b in sales transactions Published monthly

7 Animalytix Cattle Surveys Reflect $1.2+ b in Annual Sales to 75,000+ Cattle Production / Vet Locations Anti-parasitics - $ 156m 70,000 locations Anabolic Implants - $ 110m 12,000 locations Anti - infectives - $480m 58,000 locations - Intramammary Infusions - $81m 14,000 Locations Specialty Pharms - $58m 71,000 locations Vaccines - $ 260m 52,000 locations Reproduction Hormones - $ 88m 34,000 locations

8 Animalytix Small Animal Market Surveys Reflect $2.5+ billion in Annual Sales to 70,000+ Locations Syringes, Needles & Sutures - $ 255m / 68,000 locations NSAIDs - $160m 52,000 Locations Flea, Tick & Heartworm - $635m 68,000 locations Anti - infectives - $125m 40,000 locations Dermatologicals - $175m 89,000 locations Nutraceuticals - $180m 118,000 locations Specialty Pharms - $245m 63,000 locations Vaccines - $ 279m 49,000 locations Diagnostics - $395m 39,000 locations Human Label Pharma - $190m 71,500 locations

9 The Animalytix Smart Sort Methodology uses this Extensive Data Base to Support 4 Novel Outputs Customer Typing Purchasing profiles, including specific products as inclusion and exclusion criteria determine categorization among veterinary, retail and livestock production categories Animal Populations Inclusion and exclusion criteria above combined with purchase quantities and ratios among selected Sentinel products purchased are utilized to determine cared for animal populations (denominator) Market Potential & Penetration Cared for animal estimates are combined with animal practice assumptions per product category to define potential which is then combined with actual sales data to determine market penetration

10 ALX Utilizes its Proprietary Smart Sort Method for Segmentation of 400,000+ Purchasing Locations 400,000+ Market Consumption Points Non-Vet Vet Retail Non-Retail Species Specific Non-Specific Ag-Retail Swine Ruminant Equine Equine RUM Mixed Tack Shop Comp. An. Retail Ovid Dairy Bovine Beef Swine Sm. An. Lg. An. Comp. An. Heifer Grower Calf Ranch Feedlot Cow-Calf Property of Animalytix LLC / Copyright 2011 Animalytix LLC. All Rights Reserved.

11 Smart Sort Utilizes Defined Criteria within its Business Logic for Segmentation Species Specific: 67% or more of total purchases associated with a single species (RUM, EQ, SWI, SA, OTHER) Large & Companion Animal: 80% or more of total purchases for ruminant & swine (large) or of equine & small animal (companion) Mixed Vet: Total sales reflect less than 80% of either large or companion animal products Sub-Distributor: Driven by sales volumes & breadth of purchasing across all product categories Inclusion & Exclusion Criteria: presence or absence of soft goods, reproductive vaccines, beta agonists, terminal implants, mastitis treatments, scheduled drugs, and other specialized items are used as Sentinel Products to assist in segmentation efforts Property of Animalytix LLC / Copyright 2011 Animalytix LLC. All Rights Reserved.

12 By the Numbers A Few Findings from 2012 Smart Sort Industry Results

13 Sentinel Product Monitoring Show Marked Shifts in Cattle Populations from 2010 to ,000,000 12,000,000 10,000,000 8,000,000 6,000, ,000,000 2,000,000 - CA CO IA ID KS MN MO MT NE NM OK OR SD TX Doses of 7/8-way clostridial vaccines purchased in 2010 and 2012

14 While Total 7/8-way Clostridial Doses are Down 4%, Variance by State is Much Higher 1,000,000 20% 500,000 15% 10% - (500,000) CA CO IA ID KS MN MO MT NE NM OK OR SD TX 5% 0% -5% Dose VAR VAR % (1,000,000) -10% (1,500,000) -15% -20% (2,000,000) -25%

15 IBR Dose Consumptions Patterns Confirm the Trend in Declining 6% During the Same Period 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000, ,000,000 2,000,000 0 CA CO IA ID KS MN MT NE NM OK SD TX WA

16 Losses in Cattle Feeding Regions were Partially Offset by Gains in Some Cow/Calf & Dairy Markets 600, , ,000 - (200,000) (400,000) (600,000) (800,000) (1,000,000) (1,200,000) (1,400,000) CA CO IA ID KS MN MT NE NM OK SD TX WA Dose VAR VAR % 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% -25%

17 In 2012, Small Animal Specialty Practices Treated 75% of 32.5 million Cared For Dogs "Cared For" Dogs "Cared For" Dogs % Pet Retail is considered under-represented at 11% 2% 6% in the current ALX data set due to minimal 2% catalog and regional OTC distributor participation 4% 2% 6% 0.4% 11% 2% 4% 2% 75% 75% DVM - Mixed DVM - Mixed DVM - Comp. An. ( DVM - Comp. DVM An. - (SA Small & EQ) Anima DVM - Small Pet Animal Retail Pet Retail Other Other SA Rescue SA Rescue DVM - Other DVM - Other Cared For dogs defined as those receiving an annual DAP vaccination series

18 36% of Cared For Dogs were Located in the Top 5 States; 52% were Located in the Top 10 States 3,500,000 "Cared For" Dogs by State ,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 - TX FL NC OH PA MI VA IN WI WA AL LA MN MD NM MS AR CT NE WV MT HI WY SD ND DC

19 The Top 25 Major Metro Areas Represented 1/3 rd of All Cared For Dogs in ,500,000 "Cared For" Dogs Major Metro Areas ,200, , , ,000 -

20 AK DC NE NJ CT WA MN VT OR DE WY MD CO NH MA ME RI PA NY HI VA WI ND CA OH SD MI IL MT IA WV UT ID IN FL NV NC AZ GA MO LA AR KY TX TN SC KS AL MS OK NM Cared For Spending by State for a Defined Market Basket Varied from $12 - $45 per dog in 2012 AIF NSAID Sp. Pharms Derms Human Label $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $- Market Basket Includes: Anti-infectives, NSAIDs, Dermatologicals, Human Labeled Pharmaceuticals and Specialty Pharmaceuticals / Excludes vaccines, anti-parasitics, diagnostics and supplies

21 AK DC WY WA NJ CO ND VT OR ID CT SD MA NH PA MT RI ME DE MD NY VA UT CA OH NV MI HI AZ IL WI WV KY NC IN MN AR GA TX MO NE FL AL TN IA LA OK SC KS NM MS Average Surgical Expense per State Varied Nearly 4-Fold from $ $15.50 per Cared For Dog $18.00 Surgical Expense per "Cared For" Dog $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $- Surgical Suite Sentinel Basket Includes: Anesthesia, Fluids & Sutures

22 WY VT MT ND NH ME ID WA OR PA CO SD NJ OH MA UT CT RI DE MI VA MN NY MD AZ WV WI IN DC GA NV IL KY CA MO SC IA NC AK AR OK NE LA AL NM TN KS TX MS FL HI The Euthanasia Drug-Related Expenses per Cared For Dog varied 4-fold from $ $0.90 $1.00 Euthanasia Expense per "Cared For" Dog $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $-

23 For More Information Contact Brad Holen

24 The ALYX Market Survey Reporting The Animal Health Industry s Leading Supplier of Actionable Business Intelligence Series Turning Data into Action Chris Ragland, CEO Animalytix LLC