Dechra Pharmaceuticals

A.1.1. In 2022, Dechra acknowledged that increasing regulations restricting the use of antibiotics in food-producing animals and shifting consumer preferences represent some risk to the business. However, the company has updated its disclosure to state that it does not believe the risks arising from AMR will have a material impact on its business. 
A.1.2. In 2022, Dechra did not disclose a strategy for reducing its exposure to antibiotic use. The company has since updated its ESG Report to state that it designs its products and services to support responsible antibiotic use. The company highlights that it does not have in-feed additives for blanket treatment, it offers water-soluble products for the treatment of targeted groups and injectables for individual treatment to minimise use, and it offers diagnostics to support veterinarians in calculating the correct dose of antibiotics. However, the company has still not published a strategy to reduce its exposure to antibiotics sold for non-therapeutic purposes. 
A.1.3. In 2022, Dechra did not provide a breakdown of revenue from antibiotics. The company has since updated its reporting to disclose that gross sales of FAP antimicrobials, both as a proportion of all FAP sales and total group sales, have decreased between the years 2015 and 2023, from 69% to 52% and 10% to 6% respectively. The company further details that in 2023, water-soluble antibiotics represented 36% of its FAP revenue (£32 million), and its ‘other’ antimicrobial products represented 18% of FAP revenue (£16 million). The company’s total net revenue in 2023 was £761.5 million. The company does not provide a breakdown for shared-class and animal-only antibiotics.

A.2.1. In 2022, Dechra did not have a publicly available strategy for responsible antibiotic sales and marketing, offering only high-level statements about matching region-specific current best practice prescribing habits. The company also did not provide a strategy in its 2023 reporting. A.2.2. Previously, Dechra did not clarify if it had removed indicators for growth promotion and prophylaxis from labels. In 2023, Dechra updated its disclosure to clearly state that it has never marketed antibiotic usage for the purposes of growth promotion anywhere in the world. Therefore, such indications have never been on the labels of any antibacterial products sold by the company, including in territories where these practices are still legal. A.2.3. Dechra has not disclosed who is responsible for senior oversight and enforcement of the company's strategy for the responsible sale and marketing of antibiotics in its 2022 or 2023 reporting. Promotional compliance is monitored by the company’s country and regional sales managers; Dechra reports having an internal audit team that regularly conducts a review of compliance processes and implements corrective actions to address issues. It can be assumed that this review process includes promotional compliance around antibiotics, but further clarity is needed. A.2.4. Previously, Dechra provided no information on sales incentives associated with antibiotics. It has since clarified that it does not incentivise sales representatives or third-party distributors specifically on sales of antibiotic products.

B.1.1. In 2022, Dechra released its first standalone Sustainability Report. However, it did not include an EHS strategy that addresses antibiotic residues in manufacturing. The company has since provided an update, sharing that it has started a Pharmaceuticals in the Environment (PiE) project to help gain greater visibility over its manufacturing discharges. It’s unclear, however, what the project will consist of, or timelines related to the project. B.1.2. In the company’s updated reporting, Dechra shares that its FAP water-soluble antibiotics are manufactured in-house at either its Bladel or Zagreb facilities. The company also sells a limited amount of injectable antibiotics largely manufactured in-house with a small amount manufactured at a third-party Contract Manufacturing Organisations (CMO) site. The company does not disclose where they sites are located. B.1.3. Dechra reports that all of its sites perform local monitoring of process effluent to remain compliant with any permits or licenses. It is unclear how often monitoring takes place and who is responsible for overseeing the audits. B.1.4. Although Dechra states that its water-soluble antibiotics are manufactured in-house at its Bladel or Zagreb facilities, the company does not clarify where its CMO sites are located.

C.1.1. Dechra has not updated its disclosure since 2022 and still does not specifically define alternatives to antibiotics. C.1.2. Nevertheless, Dechra continues to disclose that it offers alternatives to antibiotics. This includes Solacyl, a water-soluble anti-inflammatory product that improves calf health and reduces the risk of infection, thereby reducing the need for antibiotics. In 2022, Dechra reported that it was also expanding its FAP vaccine product portfolio and had eleven new vaccines in its product pipeline – an increase of seven from FY21. In 2023, the company disclosed that it is continuing to grow its vaccine portfolio but does not disclose if its vaccine expansion is part of a strategic plan to use vaccines as antibiotic alternatives. C.1.3. Dechra’s product portfolio clearly includes items that could be classified as alternatives, such as anti-inflammatory medications and vaccines. However, as the company does not provide any detail about its portfolio or revenue breakdown, investors can't determine how its exposure to alternatives is changing year-on-year.

C.2.1. In 2022, Dechra reported £32.4m ($43.84m) spent on pharmaceutical research and development (R&D). In 2023, the company invested a record £57.5 million into R&D, representing 7.6% of revenue. However, Dechra has not yet provided a breakdown that identifies R&D spending on alternatives to antibiotics. C.2.2. In FY22 Dechra made two acquisitions: Piedmont Animal Health and Med-Pharmex. Neither acquisition discloses a focus on developing alternatives to antibiotics, alternatively, the company discloses that Med-Pharmex Holdings has a small FAP portfolio containing antimicrobials. C.2.3. In 2022 and 2023, Dechra did not disclose its marketing spend on alternatives to antibiotics.

D.1.1. In 2022, Dechra did not disclose its involvement in any stewardship activities designed to reduce non-therapeutic antibiotic use in animal agriculture. In 2023, Dechra highlighted that to encourage the responsible use of antibiotics, the company provides support to employees and veterinarian customers that include: • Solustab Support Tool – used by its sales team when visiting customers. • Solustab training module for its employees on the company's internal education platform, Delta; solustab.eu website for use by veterinarians and farmers; and • Dechra Academy module for veterinarians promoting an integrated approach to mastitis (herd management, early detection, and targeted treatment) that includes the importance of proper diagnosis and sensitivity testing. D.1.2. In 2022 and 2023, Dechra did not disclose any stewardship efforts to improve AMR surveillance.

D.2.1. In 2022 and 2023, Dechra only disclosed its lobbying spend where legally required and did not publish this in its annual reporting. Dechra does not provide any updated disclosure in its 2023 reporting to clarify the company’s approach to lobbying and political expenditure regarding regulation related to AMR.

E.1. Dechra acknowledged the engagement but did not provide a written response to the questions in the letter sent in July 2023 and declined to participate in a FAIRR-facilitated dialogue with investors.