Nordion Inc. (TSX: NDN) (NYSE: NDZ) announced today that it has been granted special permission by The Open Joint Stock Company “Isotope” (Isotope), the authorized subsidiary of Russia’s State Atomic Energy Corporation “Rosatom” (Rosatom), to enter into a negotiation directly with the Research Institute of Atomic Reactors (RIAR) for supply of Molybdenum-99 (Mo-99). Nordion and Isotope have jointly agreed that the current Mo-99 supply agreement structure was no longer appropriate and have terminated their Mo-99 supply agreement effective Oct. 26, 2012. The 2010 framework agreement with Isotope, to explore and define areas of collaboration for the supply, marketing and sale of isotopes produced in Russia is expected to remain in effect.
With confirmation that the MAPLE facilities will not be commissioned, Nordion is now reassessing sources of long-term Mo-99 supply. Nordion intends to enter a negotiation directly with RIAR for the supply of Mo-99 to potentially reach an agreement that better fits the current production capabilities and market dynamics.
Similar to the Isotope supply agreement, the negotiations with RIAR are intended to focus on the supply of Mo-99 to Nordion for the processing, distribution and sale of Mo-99 outside of the Russian Federation. This supply of Mo-99 would be produced by RIAR’s reactors in Dimtrovgrad, Russia. If an agreement is reached with RIAR, Nordion expects that such an agreement could establish, following required regulatory approvals, a supplemental supply of Mo-99 which could potentially meet a portion of Nordion’s long-term supply requirements. The Mo-99 volume associated with supply from RIAR would be anticipated to be significantly lower compared with the original agreement that Nordion had with Isotope.
“These supply discussions directly with RIAR provide an important opportunity for Nordion and our customers. This negotiation comes at a time when our customers, and in turn the nuclear medicine community, are looking for greater stability and long-term reliability in their supply network,” says Steve West, CEO, Nordion. “We continue to work towards contributing to an improved global supply chain and securing a supplemental supply source for medical isotopes so important to physicians and patients worldwide.”