MDZ Mds

A Canadian reactor that is a vital producer of medical isotopes will likely be unavailable until the end of July, stretching a repair outage that has caused headaches for patients, doctors and suppliers.

This means the Canadian outage will overlap for several months with an outage at the world's other key reactor, in the Netherlands, sidelining more than half the globe's production capacity for material used in important medical scans. Covidien PLC (COV) and Cardinal Health Inc. (CAH) are among the companies affected by snarls in the supply chain.

The National Research Universal reactor in Ontario, run by Atomic Energy of Canada Ltd., shut in May last year due to a heavy water leak. There were originally fears the over-50-year-old plant would never restart, and while Atomic Energy of Canada did launch a repair plan, the schedule has been stretched multiple times.

It was recently hoped the plant would restart in May. But in reviewing certain repair work that is still needed, Atomic Energy of Canada projected on Thursday the reactor "will resume isotope supply by the end of July."

"The new schedule has built in prudent contingency reflecting the difficulty inherent in these final repairs," the reactor operator said in a press release.

The facility produces a material called molybdenum-99 that decays into technetium-99m, which is the world's most commonly used medical-scanning isotope. MDS Inc.'s (MDZ, MDS.T) Nordion unit performs additional processing of the material and then two companies--Covidien and privately held Lantheus Medical Imaging Inc.--make generators that produce the medical isotope.

Cardinal Health is a major operator of nuclear pharmacies that distribute this material.

Because these products have a very short life span, they can't be stockpiled and must be continuously produced. But the production line has been snarled multiple times in recent years by outages among the small fleet of aging reactors that supply the global market.

The Canadian outage is exacerbated by the fact that the Dutch plant, the world's other major producer, shut for a repair outage in February that is expected to last until August. These two plants traditionally provide about 65% of the world's medical isotope supplies.

Covidien recently announced it found a way to plug some holes by tapping a reactor in Poland. It received permission from U.S. and Canadian health authorities earlier this month to bring in material from that plant.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

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