MDS Inc. of Mississauga, Ont. announced its financial results this morning. MDS is the parent company of MDS Nordion, the Kanata, Ont.-based company which buys all of the medical isotopes produced by Atomic Energy of Canada Ltd.'s at the Crown corporation's Chalk River Laboratory.
For the three months ending April 30, MDS Nordion had an operating profit of US$23 million and net revenue of $65 million. That was down from the same quarter last year of $24 million and $80 million. MDS also had this to say in its press release this morning:
After the end of the quarter, in May 2009, Atomic Energy of Canada Limited (AECL) announced that its National Research Universal (NRU) reactor would be out of service for at least three months. Based on historical EBITDA trends related to NRU-supplied isotopes, MDS expects the financial impact of this shutdown to reduce MDS Nordion's adjusted EBITDA by approximately $4 million for every month the NRU is out of service. MDS is assessing plans to reduce costs over the extended shutdown period. MDS Nordion continues to deliver positive EBITDA from sterilization technologies and radiopharmaceutical product and service lines.
MDS continues to work to secure a long-term reliable supply of medical isotopes. In 1996, MDS Nordion contracted with AECL to complete and commission the MAPLE reactors, which were intended to replace the NRU. In May 2008, this project was unilaterally discontinued by AECL and the Government of Canada. MDS invested over $350 million in the MAPLE project, and believes that the completion of the MAPLE reactors is the best solution to provide global medical isotope supply. More recently, MDS Nordion urged the AECL and Canadian Government to consult with international experts and obtain their assistance to activating the MAPLE project to address the current medical-isotope supply shortage. In addition, MDS Nordion is examining longer-term supply alternatives and announced in the second quarter its collaboration with TRIUMF, Canada's national laboratory for particle and nuclear physics, to study the feasibility of producing a viable and reliable supply of photo fission-based Molybdenum-99.
This will have some relevance today. Last night, we reported: Prime Minister Stephen Harper says Canada plans to leave the production of medical isotopes to other countries — despite the fact that for a time last year, this country was producing nearly all such isotopes in the world.
“Eventually, we anticipate Canada will be out of the business,” Harper said Wednesday.
AECL -- again, it's a Crown corporation so taxpayers stand behind its obligations -- signed a deal with MDS Nordion guaranteeing a 40-year supply of medical isotopes. The MAPLEs were to produce that 40-year supply. MDS is suing AECL and Canada for $1.6 billion for cancelling the MAPLEs. What now will AECL and Canada owe MDS Nordion now that the prime minister has rather abruptly announced that Canada is out of the business altogether and will not -- MAPLEs or no -- honour its word to MDS Nordion to provide it with medical isotopes for the next 40 years?
MDS Nordion executives, as it happens, had already been scheduled to testify today at the House of Commons Standing Committee on Natural Resources (hashtag #RNNR for you Twitterers) where executives are expected to make the case for the MAPLEs. Both Liberal and NDP MPs are pushing the government to at least have international experts review AECL's decision to kill the MAPLEs.
Why is all this important? The medical isotopes at Chalk River help 2 million Canadian cancer and heart disease patients every year.
http://communities.canada.com/shareit/blogs/onthehill/archive/2009/06/11/MDS-tells-PM-hes-wrong.aspx
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