Thank you.
Good afternoon. My name is Steve West, Chief Operating Officer of MDS Inc. and President of MDS Nordion. Accompanying me is Jill Chitra, Vice-President of Strategic Technologies for MDS Nordion.
Today, I would like to focus my remarks on the current status of the medical isotope supply shortage, the future of long-term medical isotope availability and Canada's critical role in the nuclear industry.
In order to better appreciate the industry in which we are a global leader, MDS Nordion often works with its market and its customers to understand the perspectives of the medical community. Recent market intelligence has led to a better comprehension regarding the impact of the medical isotope shortage on the North American and European technetium end-users. Although our work is qualitative and directional, it does provide relevant observations of the impact of the shortage, and we believe that further quantitative research would validate these findings.
From our research, we learned the following.
Not surprisingly, the NRU shutdown has resulted in a significant decrease in technetium supply to hospitals and clinics. Hospitals have been able to alter their behaviour to mitigate the effects of the shortage, but not in ways perceived by the clinical community to be sustainable in the long term. Based on our review, we estimate there has been a 15% decline in technetium administered in doses across North America and Europe due to the shortage.
The actual impact of the medical isotope shortage, however, is greater than this estimation. But due to changes in patient scheduling, longer work hours, greater efficiencies of preparation and administration to patients, the medical community has been able to reduce the impact. However, many end-users we have spoken to really don't believe this is a sustainable activity in the long term. In addition, and of critical importance, is our discussions and research indicate that Canada has been the hardest hit across North America and Europe, where we estimate the shortage in technetium to be greater than 35%. This is significantly greater than the impact we're hearing about in the U.S., which is estimated to be approximately 20%, and in Europe, where the impact has been negligible. Based on expected supply scheduling in the global supply network, the outlook for 2010 is not any better and in fact has the potential of being much worse.
The HFR reactor in Petten, in the Netherlands, will require an estimated shutdown of 26 weeks starting in mid-February. That means that potentially there will be a six-week time period when both the HFR reactor and the NRU are scheduled to be out of service, which represents about 70% of the global medical isotope supply. This assumes that there will be no issues with the NRU and HFR restarts. Any delays in NRU will only magnify the impact of the severity and increase the period of the shortage.
The impact becomes critical, both here in Canada and globally, of course. In addition, specifically in the timeframe from April to September of 2010, there's also the potential of only one or two reactors operating. And this is due to schedule-direct and maintenance shutdowns. As well, the new supply entrants, which were expected to be online earlier this year, continue to be delayed. So the completion of the NRU repairs are imperative. The CNSC has granted the NRU a licence until 2011; the government has asked AECL to apply for an extension of that licence. This will assist in furthering the life of the NRU reactor.
We strongly support these efforts. However, the extension of the NRU licence is not, in our view, a long-term solution for medical isotope supply. It does not preclude future issues with NRU, or provide a solution for the supply beyond the extension period.
This brings me to my second point regarding future outlook and the plan for long-term medical isotope supply beyond 2011.
At the end of July, expressions of interests were submitted to the Government of Canada's expert review panel on medical isotope and technetium generator production. MDS Nordion submitted a proposal and collaborated on several others. To date we have not been approached by the panel or by the expert consultant for any details or clarification of these highly technical and industry-specific proposals. At this time we are not aware of what decisions and/or actions will be forthcoming from the panel's report designed to address the medical isotope supply issue here in Canada.
We are also unaware of any definitive plan or timeline as to what occurs in November, once the proposals are reviewed. It's not clear what the recommendations to the government will entail or how long it will be before we have an implemented solution.
In the meantime, the Netherlands has publicly stated that it has no intention of giving up its European leadership role in the nuclear industry, with the announcement of its PALLAS reactor project, intended to replace the Petten reactor. The United States is moving forward with funding for domestic supply, and Australia is making an entrance into this market.
Canada, the longtime global leader and one of those hardest hit by the shortage, appears to be sacrificing its leadership position to rely on foreign countries to supply its medical isotope needs. This does not equate to a reliable long-term supply solution. If the Netherlands or the U.S. had MAPLE assets available to them today, I am sure they would be willing to evaluate and invest in a solution to bring those reactors online.
For us, as a global health science company headquartered here in Ottawa, assurance of secure long-term isotope supply has been and continues to be a fundamental focus at MDS Nordion. It is essential for the global nuclear medicine community, the patients they serve, and the future of innovation in health care.
We believe the role of government is critical. Governments provide biomedical infrastructure for research through hospitals and universities. Health is an investment that produces economic wealth and creates a better economy and a better world.
Canada has been a leader in isotope production and has fostered an innovative industry that creates high-value Canadian jobs, research and development opportunities, and economic value creation. Other nations will benefit from investing in this innovative and growing industry, an industry that started here in Canada.
To foster health care technology for Canadians, we need medical isotope production capacity to advance innovation and maintain our global leadership.
Thank you.