MDS Commences Arbitration against AECL over Cancelled MAPLE Project and Files $1.6 Billion Court Claim against AECL and the Gove
09 Luglio 2008 - 1:00PM
PR Newswire (US)
TORONTO, July 9 /PRNewswire-FirstCall/ -- MDS Inc. (TSX: MDS; NYSE:
MDZ), a leading provider of products and services to the global
life sciences markets, today announced that it has served Atomic
Energy of Canada Limited (AECL) with notice of arbitration
proceedings. MDS will be seeking an order to compel AECL to fulfill
its contractual obligations under its 2006 interim and long-term
supply agreement (ILTSA) and if not granted, seeking significant
monetary damages. MDS has concurrently filed a court claim for $1.6
billion in damages against AECL, for negligence and breach of
contract, and against the Government of Canada, for inducing breach
of contract and for interference with economic relations. "We have
had to resort to taking these steps to protect the interests of
patients, the nuclear medicine community, our shareholders and our
customers," said Stephen P. DeFalco, President and CEO, MDS Inc.
"We are disappointed that AECL and the Government decided to
abandon the MAPLE project without establishing a clear plan for the
long-term supply of critical medical isotopes." MDS's primary
objective through the legal proceedings is to have AECL honour its
long standing commitment to replace the National Research Universal
(NRU) reactor by bringing the MAPLE reactors into service, and
provide a 40-year supply of medical isotopes, required by patients
worldwide for serious medical needs. In 1996, MDS entered into an
agreement with AECL for the design, development and construction of
two new nuclear reactors and a processing facility, known as the
MAPLE project. The project was intended to replace AECL's NRU
reactor, which produces approximately 50 per cent of the world's
medical isotopes. AECL agreed to provide interim supply of medical
isotopes from NRU until the MAPLE project was operational. The
MAPLE project was to be completed by the year 2000 at a planned
cost to MDS of $145 million. By 2005, the project was not yet
completed and costs had more than doubled, with MDS's investment
exceeding $350 million. To address these issues, MDS entered
mediation with AECL that resulted in a new agreement reached in
2006. The 2006 agreement stipulated that AECL would bring the MAPLE
reactors into service commencing October 2008 and provide MDS with
a 40-year supply of isotopes. On May 16, 2008, AECL and the
Government of Canada announced their intention to discontinue the
MAPLE project without prior notice to or consultation with MDS.
AECL and the Government also made their announcements without
disclosing any long-term plan for the supply of isotopes beyond
extending the license of the NRU. Prior to their announcement, in
regular reviews with AECL to discuss the status of the MAPLE
project, AECL had consistently maintained that it would complete
the reactor project. AECL has stated that its decision will not
impact current supply of medical isotopes from the NRU, and the
Government has stated that it would like AECL to pursue an
extension of the NRU operation beyond its current license. While
MDS supports this decision, it does not adequately address
long-term supply. The Importance of Isotope Supply Medical isotopes
are used to diagnose potentially life-threatening conditions such
as heart disease and to treat serious diseases such as cancer.
Establishing a reliable supply of medical isotopes is an important
issue for patients worldwide. The NRU is one of only four reactors
in the world with the capacity to produce isotopes for commercial
use. It supplies isotopes to MDS Nordion who in turn processes them
into medical isotopes that are then distributed to
radiopharmaceutical companies. These companies manufacture
radiopharmaceuticals and distribute them to hospitals and
radiopharmacies around the world. About MDS MDS Inc. (TSX: MDS;
NYSE: MDZ) is a global life sciences company that provides
market-leading products and services that our customers need for
the development of drugs and the diagnosis and treatment of
disease. We are a leading global provider of pharmaceutical
contract research, medical isotopes for molecular imaging,
radiotherapeutics, and analytical instruments. MDS has more than
5,500 highly skilled people in 29 countries. Find out more at
http://www.mdsinc.com/ or by calling 1-888-MDS-7222, 24 hours a
day. Note to Editors: Learn more about the MAPLE project at
http://www.mdsinc.com/pdf/MAPLE_Backgrounder.pdf and medical
isotope supply at
http://www.mdsinc.com/pdf/Isotope_Backgrounder.pdf DATASOURCE: MDS
Inc. CONTACT: Media: Janet Ko, MDS Inc., (416) 213-4167, ;
Investors: Kim Lee, MDS Inc., (416) 675-6777 x34721,
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