Embrex Inc. announced today that Tyson Foods, the leadingproducer of broiler chickens worldwide, will convert 23 of itslargest hatcheries from vaccinating newly hatched chicksmanually to inoculating them in ovo via Embrex's automatedegg injection system Inovoject.

Initially, Tyson Foods will inoculate its broilers with a vaccineagainst Marek's disease, which is a viral affliction common inthe U.S. poultry industry. If left untreated, it causes nervoussystems tumors that make the birds unmarketable.

Inovoject can inoculate 20,000 to 30,000 fertile eggs per hour.It's used on the 18th day of a broiler egg's 21-day incubationperiod. It can also be used to deliver different vaccines --either generic or proprietary -- to the embryos.

Today's announcement extends the three-year leasing andlicensing agreement between the two companies, reached inSeptember 1992. Since then Tyson has converted twohatcheries to automated egg injection. The conversion of theadditional 23 hatcheries, which is expected to take 12 months,will begin in June.

If all goes according to plan, Tyson Foods should be injecting 18million broiler birds weekly by the end of 1993, and could beup to 24 million birds by the end of May 1994. Tyson Foodswill pay Embrex a fee for each egg injected via Inovoject, and ifquarterly injected volumes fall below a specified target, the feepaid per egg injected will increase as volume decreases.

To put this in perspective, about 18.5 billion broiler chickensare hatched per year, one-third of them in the U.S. And Tysonhas cornered about 21 percent to 22 percent of that market,giving it a production level of close to 1.3 billion chicksannually.

For Embrex (NASDAQ:EMBX), which "by the end of 1994 will beinoculating well in excess of 90 percent of Tyson's totalproduction," this translates into its Inovoject being used tovaccinate 20 percent of all the U.S. broiler chickens, accordingto Randall Marcuson, president and chief executive officer ofthe Research Triangle Park, N.C., company.

The broiler chicken business generates worldwide revenues of$55 billion annually. In terms of what this means to Embrex'srevenues, "you don't get much per dose, but the multiplier withchickens is incredible," Marcuson told BioWorld.

Embrex's stock was down 50 cents a share on Tuesday, closingat $8.

-- Jennifer Van Brunt Senior Editor

(c) 1997 American Health Consultants. All rights reserved.

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