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IN THIS ISSUE

Welcome from the CEO's desk

Features

In the News

A Little Bit of Humour To Finish Off

CONTACT US

Stirling Products Limited (ASX: STI)

Level 11 The BGC Centre 28 The Esplanade PERTH WA 6000

P:	+61 8 9480 1480
F:	+61 8 9226 4144
E:	info@stirlingproducts.net
W:	www.stirlingproducts.net

Edition 2 - March 2006

Welcome from the CEO's desk

Hi there and welcome to the second edition of The Stirling Connection. It is always a good feeling when you get past the first edition of a newsletter and move on to the second edition.

The Stirling team has been hard at work, diligently developing both the technical and business aspects of our exciting range of products based on R-salbutamol for the animal and veterinary market. This will be an exciting year for Stirling.

The last issue of The Stirling Connection, invited readers to participate in a survey regarding processed meat. Unfortunately our system for info@stirlingproducts.net did not perform and as a result we did not capture any of the feedback from the first issue. The question we were asking is repeated below. If you would like to participate or re-enter your thoughts (as the case may be), please feel free to do so.

Similarly if you have any other feedback, we would like to hear from you through the info@stirlingproducts.net facility. Our apologies for technical problems with the first issue. If you want to write directly to me, my E-mail address is calvin.london@stirlingproducts.net. I would love to hear from you.

Hope you enjoy this edition of The Stirling Connection.

Features

Trying to Make Sense of European Bans on Growth Promotion
By Calvin London

The use of antibiotics as growth agents in animal feeds was actually started by accident. Jones and Ricke⁽¹⁾ describe accounts of adding dried fungal mycelia (much like dried mushrooms) to feed. Providing potent stimulation of growth originally thought to be vitamin B₁₂, it was later shown to be antibiotic. By the end of the 1940's it had become common practice in production animal husbandry across many countries.

Swann⁽²⁾ in a report to the British Parliament in 1969, provided the first real concerns about the development of antibiotic resistance in human pathogens and recommended the ban of sub-therapeutic use of antibiotics in animal feeds. Sweden and Denmark were the first European countries to subsequently ban antibiotics in 1986 and 1995 respectively, with the European Union evoking the first broad bans in 1997.

Effective from January 2006, the European Union's ban on antibiotic growth promoters removes the four remaining antibiotic growth promoters in the EU food chain. This ban not only affects animal production in the EU, but also prevents other countries exporting meat to Europe that has been raised using growth promoters (of any form, not just antibiotics).

Scientific controversy still rages over the use of antibiotic as feed supplements and both the nature and extent of their contribution to the increasing levels of antibiotic resistance. Of major concern is the fact that many classes of antibiotics used in animals also have human equivalents. The problem is complicated by the fact that there are many more food animals than humans, thus the potential size of the resistance reservoir is very large. Almost all intensively raised food animals such as chickens, pigs, and feedlot cattle are exposed to antibiotics during their growth, often for quite legitimate reasons. No matter what the opinion held, amplifying resistance to human antibiotics in food animals is inherently problematic. Facilities used for intensive farming act in much the same way as intensive care units in hospitals, cross infection is common, vulnerability to infection is high and antibiotic use is often prolonged.

The EU's bans are based on an attitude that banning the use of antibiotics is vital in combating antimicrobial resistance. It claims to have the widespread support of EU citizens. A number of scientific publications however do not support a reduction in antimicrobial resistance after initial bans in European countries in the 1990's were implemented. Others demonstrate that the removal of antibiotics in animal feeds can have deleterious effects on the welfare of animals.

Frequent claims have been made against the EU logic and that the basis for the widespread ban is politically based. These arguments gain momentum especially when one considers that if the main objective of the EU Commission is as stated to reduce antimicrobial resistance, why are products that have no antimicrobial activity also banned?

The EU antibiotic bans in combination with previous hormone bans have essentially shut US beef out of the EU. This market is worth over $100 million to US beef exporters alone, mostly in organ meats and offal that the Americans do not have much taste for, but EU consumers relish. For other countries including Australia, the bans also affect the export of beef, not necessarily due to the use of antibiotics, but for other forms of growth promoters as well.

Despite the success of the US in getting a ruling by the World Trade Organisation in 1998 for the use of hormone implants and several suggested systems for the intense monitoring of carcass quality, the bans remain in force and are unlikely to change in the near future.

In the US by comparison, the Food and Drug Administration is also reviewing the use of antibiotic growth promoters, but what many consider in a far more pragmatic and scientific way. The FDA is concentrating on those classes of antibiotics which are also used for humans and where there is an established and unsatisfactory risk profile. The latest antibiotic to be added to the US banned list was enrofloxacine (Baytril), which occurred last year.

Either way and while the scientific community debates the pros and cons of broad-based bans versus more conservative and precautionary bans, the short to medium term diagnosis for antibiotics as growth promoters is not good.

⁽¹⁾Jones, F.T. and Ricke, S.C. (2003). Poultry Science 82:613 - 617 (2003)
⁽²⁾ Swann, M.M. (1969). "Report of the Joint Committee on the Use of Antibiotics in Animal Husbandry and Veterinary Medicine." Her Majesty's Stationary Office, London.

Pampered Pets
By Calvin London

In describing the potential application for R-salbutamol as a treatment for companion animal obesity, many people seem to be totally bewildered by the concept that anyone could be concerned about "fat dogs and cats" and become even more bewildered that anyone would pay to provide some form of treatment for this disorder.

In a topic that will be covered in greater detail in a future issue (companion animal obesity), I decided to do some research on the attitudes of people to their pets. In the large majority of countries, pet owners spend billions of dollars on their pets. In the US alone, estimated total expenditure on companion animals is almost $24 billion, $3.8 billion is spent on pet medications, $4.5 billion is spent on pet foods of which an alarming $628 million is spent on cat and dog treats alone.

It doesn't stop there however; the hard-sellers of products and services for pets are pushing ice cream, massages, radio programs, day spas, bottled water and street-corner treat dispensers for dogs, not to mention the usual cashmere sweaters and psychoanalytical sessions. And people are buying, in record numbers.

Let's take an example of human behaviour - watching the TV. There is a growing industry based on TV programs specifically tailored to "man's best friend" and their timeless adversaries - the household cat. A survey conducted by the American Kennel Club and Iams Co. found that almost 50% of all dogs surveyed showed some interest in the small screen. "Animal Cops" on the cable channel, Animal Planet is very popular and "Fido" is regularly seen to be ready to defend his house from what he perceives to be an invasion by canine contestants on a TV dog show. The Couch Potato Kitty DVD, caters to feline predatory instincts with butterflies and hamsters in wheels, while canine entertainment, like the Pooch TV DVD, is filled with dogs playing and exploring. It also features the odd turkey for amusement, claim the producers of the show.

Just like humans, "Fido" or "Puss - puss" has to have a snack, so there are TV snacks for pets. Everything from Woofy Pop popcorn, Nachews (doggy tortilla chips), bacon-, peanut butter- or cheese-flavoured rawhide chips, ice-cream, canine yoghurt cups (strawberry flavoured), and old fashioned feline and canine treat packs, according to Sandy Roberts of MSNBC.

There is pet furniture that matches our living rooms. Right down to collars and leads that coordinate with human fashion accessories, pet products are increasingly a reflection of, and blending with, our own aesthetic preferences. There is even a Vuitton plush squeaky toy, a Tiffany water dish, and a wrought iron canopy bed.

As Robert Lypsyte from USA Today (December 15, 2005) puts it, "If we really cared about dogs, we would let them evolve naturally. We wouldn't neuter them (and surgically insert "neuticals" ( silicone testicles ) so they (or we) will feel better about their loss). We would create runs and parks where they could exercise and play with other dogs. We would treat them as a dignified species rather than as dolls that pretend to love us so we will take care of them".

If this all sounds too familiar, you are not alone. Many pet owners now see their pets as surrogate children and treat them accordingly. It is no wonder therefore that as controllers of what dogs and cats can and do eat, the numbers of obese cats and dogs are climbing in alarming proportions at rates similar to the expanding obesity in humans. If we cannot control our own obesity, it stands to reason that we will not be able to control that of dear little "Fido" or "Puss-puss" that is dependent on us. Hence the need for medications to treat obesity in companion animals.

In the News

Australian Feedlot Finishing on the Rise

A report in the Financial Review (February 28) pointed to the increase in the numbers of beef cattle being finished in Australian feedlots prior to slaughter. The article states there are now some 2.6 million head of cattle, up from 1.65 million 10 years before.

While most cattle in Australia are grazed in open fields there is a growing number that are fattened in feedlots prior to slaughter, especially on grain feeds. Grain-fed beef now accounts for more that 40% of the total exports, fuelled by increasing demand from countries especially Japan, which represents 80% of Australia's beef exports, the article states.

The Executive Director of the Australian Lot Feeders Association (Rob Sewell) commented "beef finished in a feedlot is adding to Australia's reputation for better quality which is extremely important against increased competition from South America".

Feedlot finishing is also recognised as an important development for the longevity of the beef markets in South America as producers recognise the significant premiums for finished cattle. These are still small compared to the United States where beef finishing feedlots account for over 14 million head of cattle according to the January reports from the United States Department of Agriculture.

This is good news for Stirling's future application as a growth agent for prime beef cattle. Recognition of increasing feedlots in Australia and other target markets indicates a growing market potential for safe and effective alternatives for growth agents. Published literature also indicates that significant gains are possible through better utilisation of feed and improved premiums for quality carcasses. Trials of R-salbutamol as a growth agent for cattle are planned for this year.

New drugs, deals to boost biotech in 2006

Australian Biotechnology News (21/02/06) reported the biotechnology sector may be set to grow again in 2006, helped by new drug approvals, a relative lack of generic competition and the eagerness of big drug companies to partner with - or acquire - those with products at early stages of development.

"I think this may be a year when small and mid-cap companies do well," said Daniel Omstead, chief executive officer of Hambrecht & Quist Capital Management. "You're starting to see big pharmaceutical companies do deals with the little companies for more than just late-stage products".

Global biotechnology sales are expected to rise 13 per cent to 14 per cent in 2006, driven by new product introductions and the growth of existing products, according to IMS Health, a pharmaceutical information and consulting company.

Stirling announced late last year (ASX Release December 6, 2005) that it had signed a Heads of Agreement with South African company Afgri for approval and subsequent market authorisation for R-salbutamol in South Africa. Stirling is also pursuing its feasibility plan with Equine HealthCare for the Joint Venture and development of a treatment and delivery system for the treatment of heaves in horses.

Click here to go to the announcements

Stirling's Press Releases in 50 words or less

Stirling Establishes Excellent Activity in Obesity Reduction Study (ASX: January 31, 2006): This announcement describes the first trial of R-salbutamol in a well-established animal model used for testing candidate drugs for the treatment of obesity. R-salbutamol showed significant potential to reduce the rate of weight increase in obese animals (almost 80% over two weeks). Click here to go to the announcement

New Water Delivery System Provides Excellent Results with Stirling Growth Promoter (ASX: February 6, 2006): Medications delivered by water are preferred by some poultry and swine producers. The ability of R-salbutamol to produce similar advantages in feed efficiency and similar improvements in carcass quality when administered in water, provides an alternate delivery system that may be better suited to intensively reared animals. Click here to go to the announcement

About Town

Calvin London conducted an interview with Talkback Radio Announcer Graham Maybury on the potential for R-salbutamol as an anti-obesity treatment.

Calvin London conducted an interview with Morning Magazine on RTR FM concerning the use of R-salbutamol as an anti-obesity treatment.

Transcripts of these interviews can be found on the Stirling website.

Managing Director, Calvin London has also been "spreading the word" about antibiotic usage and the problems associated with antibiotic resistance from the use of antibiotics in animal feeds. CL has given a number of talks to local Rotary Clubs during December through March including - Heirrison Rotary Club, Nedlands Rotary Club, Rotary Club of East Perth, Rotary Cub of West Perth, Dalkeith Rotary club. (See photo below).

Managing Director, Calvin London presents a talk to the Heirrison Island Rotary Club on "Antibiotic Resistance - Facts and Fiction". (Photo courtesy of Tom Murrell 8mmedia )

Upcoming Events

Once again Stirling Products will be part of the Western Australian contingent going to BIO 2006 , this year held in Chicago in April. Stirling will have a stand at the BIO conference as part of the Australian pavilion. BIO is the largest biotechnology conference in the world and this year will be of particular interest as it has a much stronger agricultural theme.

Have Your Say - The Stirling Connection Pulse of Public Opinion Poll

At the Biotech Public forum in November, we posed the following question to the audience:

In the year 2020 you could eat organic meat at a great cost, or eat meat grown by safe biotechnology processes, would you:

A Choose non-organic meat, if safe,
B Eat organic meat but less of it
C Become a vegetarian, or
D analyse the choices in more detail, looking at dietary needs and family budget?

Respond with your answer by clicking here . See the next edition for a discussion of public survey results and your results in the next edition.

A Little Bit of Humour To Finish Off

Bad News for Large Nappy Makers

The Sydney Morning Herald (December 9, 2005) reported that a magistrate in Malta has found that nappies breach the Animal Welfare Act after vets explained that a horse's tail had to be kept free to swat flies, the Malta times reported. The practice of putting nappies on horses was used as part of the regulations to control horse dung in the streets (These practices are still used in some European cities where horses pull carriages for tourists, but perhaps the horses are given fly-swats!).

Vegetarian Pate Anyone?

Hermie the Turtle's little defective beak made meal time a struggle. Unable to close his mouth completely, the tiny 20-gram reptile's very existence was at stake. The work of two dedicated (and obviously turtle-loving) vets have now given Hermie a new lease on life - they outfitted young Hermie with braces. Now, some are calling the orthodontic work a Christmas miracle.

After receiving Hermie in May, zookeepers at the New York State Zoo in Watertown's Thompson Park noticed the turtle was having difficulty eating. Medical exams then showed Hermie's lower jaw growing downward. Turtles, which are toothless, use their beaks to break food down before grinding it with the plates in their mouths.

Two rubber orthodontic elastics - the same kind use by children with braces - were fitted onto pins across the turtle's mouth. In keeping with the spirit of Christmas, the doctors chose red and green rubber bands for Hermie's beak. (So how much does a turtle orthodontist charge?)