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IN THIS ISSUE
Welcome from the CEO's Desk
From the Barn to the Boudoir
In the News / Upcoming Events
A Little Bit of Humour to Finish Off

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Stirling Products Limited
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Issue 7, May 2007 
Welcome from the CEO's Desk

I have a question for you:

 "Who is Tia? - Tia where are you?"

The answer .... well, you will have to read this Newsletter to find out!

Welcome to the second edition of the Stirling Connection for 2007. As we are already well into the second quarter, I often find myself saying "where is the year going?"

While time flies by, I am pleased to report that Stirling continues to make excellent progress with our various projects. We anticipate completion of several key milestones this quarter, which we set ourselves at the start of the year - so stay tuned to Stirling!

This edition has a decided theme to it - "companion animals".  This is due to the upcoming release of the results from Stirling's first trial on overweight dogs. Many people that I speak to in my travels are also amazed at how significant the pet industry has become, so it seemed an appropriate time to have a look at the fastest growing sector in animal health.

I invite all followers of Stirling to visit the website, which has recently been revised, and look at our company presentation which we announced to shareholders this month.  Even better, get your name on our mailing list to receive all our announcements and company information the same day that they hit the ASX. Happy reading and to all of those who have been avid readers since the first edition, thanks for your support - you keep the Newsletter flowing.

 "Do you know who Tia is?"

From the Barn to the Boudoir

 

Today we have progressed to a lifestyle where many pets are considered by their owners as anything but a possession; they are most definitely integral parts of our families or in some cases they are our family. These feelings are reflected in the statistics provided in the sidebar opposite. 

The true humanisation of pets has spawned a multi-billion dollar industry, which, just like the human equivalent, fosters a whole load of things that we (sorry, they) just can't do without. Let's start with the humble meal. Dog and cat food is now valued at US$60 million for dry food, US$40 million for wet food and a further US$20 million for all those in-between meal snacks.

Once upon a time, dogs and cats were fed table scraps. If the family ate well, the dog didn't! We now find all the big players in the pet food industry are becoming more specialised in their diets which are taking on stronger similarities to human-type meals complete with a range of specialised sauces to put on dog or cat food. Others have seized on the opportunity to provide treats and why not? If pets are now children, why shouldn't Fido have Frosty Paws Icecream or some Snausages Fortune Snookies?

The organic age has also not been overlooked. For the low-carb, no artificial, environmentally-minded folks, there are now kits that you can purchase for BARF (would you feed your dog barf?). BARF is a combination of bone and raw food, supplemented appropriately with yoghurt enrichments.

What about medical care for pets? When I was young if a pet fell ill or got hit by a car, the question was "do we have him put down or not?" Today the question is more likely to be "that's too bad, how much did it cost?" For many pet owners having their pet put down is the absolute last resort. A lady in Washington State, USA, recently paid US$38,000 for treatment on her sick pet with an autoimmune disease. You would probably think she was one of those wealthy, well-to-do socialites with money to burn. Wrong, she was a schoolteacher who took out a second mortgage on her house to do so.

Animal health, especially relating to new medicines and veterinary services for our companion animals, is one of the fastest growing sectors. Large animal pharma companies are re-focusing their businesses in the battle to get a foothold in this sector. For example, Eli Lilly recently announced that it was opening a new animal health division with the aim of introducing new animal drugs derived from human usage.

Are we killing them with kindness? Some 40% of all dogs over the age of four are considered to be overweight; vets are seeing an increasing number of cases related to diabetes, joint problems and other health issues very similar to those of their heavy human friends. Expert opinions say that we are changing the natural diets of our cats and dogs too much, loading them up with treats too often and not exercising them frequently enough because just as humans do, it is much easier to watch a program on TV (yes, there are specific DVDs for your dog or cat!).  

 
  • There are more than 61 million dogs and 73 million cats in the US.
  • In Australia there are almost 4 million dogs and 2.5 million cats.
  • Australia has one of the highest incidences of pet ownership in the world (64% of households own a pet, the same as in the US).
  • Last year Americans spent an estimated US$38 billion on pets, including over US$9 billion on vet care.
  • The fastest growing segments of pet care are in pet supplies and services which increased 27% last year to almost US$80 million.
  • 91% of pet owners report their pet is a "very close friend" and integral part of the family.
  • 56% of 8000 pet owners surveyed had their dogs sleep in bed with them.
  • Pet products now account for more than half of the animal health market.
  • Half a cup of milk can add 50% to a small cat's calorie intake.

Pet owners expect kennels to do more than house their dog or cat these days. They want their pets treated like children. As a result we now see pet spas where you send your pet while humans enjoy their holiday. Some of these are very elaborate, right down to the provision of room service. Yes that's right; in Colorado Springs in the US you can pre-order room service for your dog. A hand-delivered 12-ounce fillet mignon dinner at US$125 a night delivered right to your dog's carpeted suite (so how do they open the door?). The steak, of course, is lightly grilled, sliced and served on a platter for a mere US$22.

We even dress our pets for going out. If you are a fashionista (is Tia a fashionista in the making?), you can easily spend a minimum of US$100-$200 per outfit. Some owners reportedly spend almost US$800 dollars on that little extra something each month so their pet will look the part when out on display.

Further evidence of how far pets have distanced themselves from the old rug on the laundry floor (with a lot of help from their human friends) comes from the most recent fad to sweep the US - "Hounds of Music". For a meagre US$1600, your dog can be limousine driven to a private recording studio where a voice coach will help bring out the best in them to be later recorded with an accompaniment of guitar, karaoke beat or orchestra. Lodging is included (because after such an ordeal, well it would be only thing to do!).

You may well be sitting back gloating and having a quiet chuckle to yourself about how ridiculous this all sounds, but to many people it is a very serious topic. A recent national public radio interview reported that "telling people that their pets are worth only what a chair or a sofa is worth is offensive and inaccurate". Why?  Because the demographics of pet ownership have changed dramatically. Once dominated by parents, often with small children, who did not have either the time of the money to coddle their pets, it is now the domain of childless people who have the money, and in some cases the time, to pamper their pets as if they were their children.

Dan Murphy (Meatingplace.com), who always seems to have these issues in hand, commented in a recent article, "The obsession over pets is partly a product of lifestyle. We have more money to spend and lavish on our "furry little time-wasters" who share our lives, our beds. It is also due to the almost total removal that our society now has from farm life and agriculture. The idea that animals are anything other than our canine or feline friends is to many people a foreign thought."

So whether our adoration for pets is part of the succession of human society, whether it is due to our increased affluence and our need for companionship because of the absence of children or to provide someone to greet you when you come home, it is big business.

Successful results for Stirling's R-salbutamol product in the treatment of weight gain will provide an entrée into this sector of animal health. Stirling is also looking at other opportunities to be part of this growing market. (What would Tia think of this?).

 

In the News / Upcoming Events

Ponce Dee Pinot Noir......

An editorial in the Wall Street Journal reported that a new discovery has been made by scientists that could swing the age-old debate that drinking red wine is good for you. A substance found in red wine, grape skins and some other plants called resveratrol, protects mice from obesity and the effects of ageing, and perhaps could do the same for humans.

Could this be the reason why French women are so thin or why the French have fewer heart attacks than Americans and Australians? While mice are the only mammals that have been tested so far, the researchers are confident that they will find similar results in other tests. (When they sober up enough to conduct the tests!).

Not Enough Corn on the Cob......

While it may be music to the ears of Stirling, because R-salbutamol has shown to have significant reductions on the feed cost associated with raising livestock meat-producing animals, there is no doubt that the current "ethanol boom" is bad for business if you are a farmer. In somewhat of a paradox, the biotechnology that has led us to be able to produce biofuels, is causing significant shortages of feed for livestock, especially in countries such as the US where the majority of meat-production is dependent on grain feeding.

A recent report in a trade journal (WATT Pig Newsletter, February, 2007) reports that crops at the end of the 2006/2007 harvest would be at a 23-year low; 30% below last year's levels. Increased consumption for biofuel production (principally ethanol production) has resulted in a drop of more than 10% in the corn available to farmers. As a result, farmers now more than ever are searching for additives to feed that can improve the feeding efficiency.

Don't Feed Your Dog Chinese Food......

American press over the last month has been preoccupied with the spate of recalls in pet food and pet treats from China which have caused the confirmed deaths of 16 pets. The FDA has now traced the cause to wheat glucan imported from China which contained levels of melamine. The recall has now spread to over 100 different brands of pet food and leading pet hospitals and pet databases claim that the extent of the pets affected are much greater than the 16 deaths confirmed and place the incidence rate at 0.03%.

Melamine is used as a fertilizer and in the manufacture of plastic. It causes diarrhoea, lethargy, vomiting and changes in water consumption which ultimately lead to kidney failure. Although the flow-on effects are unknown at this stage, various US Senators are calling on the FDA for tighter security in screening raw materials from China and there are now some 2000 people taking legal action in class suits.

Upcoming Events

May : Stirling will be attending BIO 2007 as part of the Australian Pavilion and through the assistance of the Western Australian Government, Department of Industry and Resource. This is one of the biggest ever representations of WA's talent at BIO. BIO is now regarded as the largest Biotechnology conference in the world.

September : Stirling will be at the Agricultural Biotechnology International Convention (ABIC) to be held in Calgary, Canada. It was at this event last year where we first heard about PBI. Stirling and PBI are currently in discussion for a strategic alliance (see Press Releases).

Stirling's Press Releases in 50 Words or Less

January 18 :  First study of Stirling's R-salbutamol in horses produces a significant effect on lung function and eased breathing in horses with heaves. No side effects were observed at any of the doses used.

February 1 : Stirling and Progressive BioActives Incorporated (PBI) announce their intention to form a strategic alliance. The opportunity provides Stirling with new products that complement R-salbutamol, a North American presence and development opportunities in Canada. The MOU specifies a review period of 180 days during which time due diligence will be conducted.

February 8 : Boardroom Radio broadcast where Calvin London provides an update on the Company's recent activities and future plans.

February 16 : R-salbutamol produces excellent clinical effects from a single dose administered to horses with heaves. Administration significantly improved breathing and relieved distress in treated horses at low doses of R-salbutamol.

February 28 : Stirling signs exclusive agreement for development and manufacture of specialised metered dose inhalers. The Agreement with the US-based company Xemplar is for the formulation of specific CFC-free canisters that can be used with the unique delivery system as part of Stirling's joint venture - Pulmovet ApS.

April 11 and 13 : Stirling appoints a new non-executive Director, Mr Gary Waters, to the Board. This coincided with Dr Gunnar Aberg's resignation from the Board to pursue other interests. Gary brings an extensive career in licensing, business development and manufacturing.

April 24 : An updated company presentation is released to the market and CEO Calvin London discusses the presentation and future direction of Stirling in a Boardroom Radio interview.

A Little Bit of Humour to Finish Off

Four Little Animals......

A teacher asked her class, "What do you want out of life?" A little girl in the back of the class raised her hand and said, "All I want is four little animals." Intrigued the teacher asked, "Really, and what four little animals do you want?" expecting the usual a little dog, a little kitten etc. The little girl replied, "I want a mink on my back, a jaguar in the garage, a tiger in the bed and a jackass to pay for it all!" at which point the teacher fainted.

Too Much Gas......

An American Airlines flight made an emergency landing recently when a passenger started striking matches to disguise a bad case of flatulence. The flight from Washington to Texas was forced to change flight plans and land in Nashville when passengers alerted staff of a strong smell of sulphur. All 99 passengers and baggage were off-loaded and an unlucky canine team was sent on to investigate (see they are man's best friends and don't always get all the good jobs!).

After intense questioning from FBI agents, the women admitted to striking the matches to cover up her embarrassment (we're in trouble on the long haul flights!). She has now been banned from taking any American Airline flights for a long time (they gave her free flight passes on Delta I think!).

To God, From the Dog......

Dear God: When we get to heaven, can we sit on your couch or is it the same old story?

Dear God: More meatballs less spaghetti please.

Dear God: Is there a mailman in heaven? If so, do I have to apologise in advance?

Dear God: When I get to heaven, may I have my testicles back if I promise to be good?

WHO IS TIA ????????

Tia (see photo) is the latest member of the London family. She is the most beautiful little puppy I have ever seen (I am not biased at all!) and she knows it (and intends to use her charm to secure all the good things that dogs are now entitled to). She has already got both my wife and I completely smitten. In future issues, Tia is going to help me from the companion animal side and will have her own opinion about the things I write. She wanted me to ask you this -

"When I got to my new home they made me do wees on the paper. I am trying really hard to get the sequence right, but hey I am only human, I make mistakes. I said sorry for going on the paper before you had read it - I never really liked the West Coast Eagles anyway! Maybe you could get me one of those fancy outdoor Pet Loo's that I noticed on page 5 while doing my business?"


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