June 18, 2009

Canada’s Dragging Medical Isotope Project Up For Grabs

The Canadian government stood by its recent decision to abandon the Maple isotope reactor project, but made very clear that they hope to have the project picked up by private groups to take over the latent nuclear program.

The chief executive of MDS Inc-- the Canada based international health and science company that provides products and services for the development of drugs and the management of disease-- reflected on comments made by Prime Minister Stephen Harper that Canada would eventually quit making medical isotopes is saying they were "curious" and "confusing."

"Our perspective is that the only viable solution is the Maples in dealing with the current situation. The Maple project was built explicitly to avoid the current situation the Canadian government finds itself in," he said.

Ottawa put off construction of the project last year due to cost overruns and technical issues, which prompting MDS to file a $1.5 billion claim against AECL (Atomic Energy of Canada Ltd.) and the Canadian government.

The project was intended to serve as a replacement for the aging 50-year-old Chalk River unit. The Chalk River unit produces about a third of the world's supply of medical isotopes, however the problematic facility was shut down nearly a month ago due to a leakage of heavy water used in the nuclear reaction process.

The isotopes are used for diagnosing cancer, heart disease and other medical conditions. They have a short shelf life and hospitals are already reporting supplies are running low.

"There may be groups of individuals and groups of companies out there that want to revisit the Maples and the calls for information and expressions of interest may very well point that out, because there are pieces that are not the reactor that are still utilizable, with still good infrastructure," Natural Resources Minister Lisa Raitt, told reporters.

"So we are hoping to get some interesting proposals coming out in the calls for information," Raitt said.

The minister's comments came on the heels of a Toronto meeting with representatives from an international taskforce examining the medical isotope shortage.

MDS chief executive Stephen DeFalco said the supply of these isotopes is "scarce" after the Chalk River reactor was taken out of commission. Government-owned AECL, which runs the facility, says it will not be up and running for at least three months.

MDS's Nordion unit that markets the isotopes worldwide was pressing the government and AECL earlier this month to confer with international experts in hopes of revitalizing the Maple project.

MDS also cautioned Thursday that the current isotope situation could have a "negative effect" on its revenue, EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) and cash flow and could result in a breach of the financial covenant related to a U.S. dollar note sometime in 2010.


Image Caption: The inside of one of the twin MAPLE reactors at Chalk River, which are designed to produce isotopes for medical diagnoses and treatment. MDS Nordion


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