Draxis Health selected by Johnson and Johnson Consumer Companies, Inc. for major contract manufacturing relationship
05 Septembre 2007 - 2:00PM
PR Newswire (US)
Multi-year outsourcing agreement for non-sterile products valued in
excess of US$120 million MISSISSAUGA, ON, and MONTREAL, Sept. 5
/PRNewswire-FirstCall/ -- DRAXIS Pharma, the contract manufacturing
division of DRAXIS Health Inc. (TSX: DAX); (NASDAQ:DRAX), has
expanded its existing contract manufacturing relationship with
Johnson & Johnson Consumer Companies, Inc. DRAXIS Pharma has
entered into a definitive supply agreement to provide commercial
manufacturing services for a broad portfolio of multiple
non-sterile specialty semi-solid products currently marketed in the
United States. The new multi-year contract runs to the end of 2013.
It includes approximately two years of manufacturing site transfer
and process validation activities followed by five years of
commercial production, which is scheduled to begin in 2009.
Commercial production is expected to generate incremental revenues
in excess of US$120 million over the five year period of 2009
through 2013. The transfer of equipment and production
technologies, which is in progress, is expected to generate
additional cumulative revenues during 2007 and 2008 of
approximately US$6 to US$8 million. The contract also contemplates
optional extensions beyond 2013. "The signing of this contract is a
reflection of the solid business model at DRAXIS," said Dr. Martin
Barkin, President and CEO of DRAXIS Health. "We are honoured to
have been selected from more than 80 international contract
manufacturers under a rigorous and comprehensive global selection
process conducted over an extended multi-year period." Dr. Barkin
added, "This contract includes prescription and non-prescription
products and will significantly improve capacity utilization in the
semi-solids section of our non-sterile operations. The confidence
shown in DRAXIS demonstrates our ability to deliver top quality,
market leading products in a highly regulated industry, which
supports our efforts to build shareholder value." Manufacturing
Site Transfer Activities The process of transferring these products
to DRAXIS Pharma and validating manufacturing procedures for each
new product was initiated in late 2006 and will continue through
2007 and 2008. Improvements to the existing semi-solid
manufacturing facilities were undertaken during the recent regular
shutdown of operations for preventative maintenance during June and
July of 2007. Some compounding rooms were enlarged and supplied
with required services to accommodate new equipment and additional
floor space was created through the construction of a new mezzanine
within the existing DRAXIS facility. Capital costs for facility
improvements and new equipment specific to this contract will be
recovered through a financing agreement. Commercial production of
the products is scheduled to start as soon as late 2008 and ramp up
to achieve near full utilization of existing capacity for
non-sterile semi-solid products by mid-2009. The contract will
result in the creation of approximately 80 to 100 new positions at
DRAXIS operations in the Montreal area. Additional DRAXIS Facility
With the signing of this contract, a second DRAXIS facility in the
Montreal area will be required in order to meet increased logistics
and secondary packaging activities. This is due to the large number
and wide range of finished product formats represented by this new
business. All products will be formulated and filled in the
existing facility in Kirkland, Quebec. The new secondary facility
will be used for operations such as labeling, assembling different
product configurations for different markets, cartoning, shipping
etc. This new facility is expected to open during the summer of
2008 and will initially be staffed with approximately 50 DRAXIS
employees. This second facility marks the first expansion by DRAXIS
Health beyond its existing 247,000 square-foot, FDA-approved
production facility in Kirkland. Conference Call DRAXIS will hold a
conference call to discuss this announcement at 11:00 a.m. (ET) on
September 5, 2007. This call can be accessed by dialing
1-866-904-6251 (Access Code 6849080) and will also be presented as
a webcast live with slides through the Company's website at
http://www.draxis.com/. The conference call will also be available
in archived format on the website for 30 days following the
conference call. About DRAXIS Health Inc.: DRAXIS Health, through
its wholly owned operating subsidiary, DRAXIS Specialty
Pharmaceuticals Inc., provides products in three categories:
sterile products, non-sterile products and radiopharmaceuticals.
Sterile products include liquid and freeze-dried (lyophilized)
injectables plus sterile ointments and creams. Non-sterile products
are produced as solid oral and semi-solid dosage forms.
Radiopharmaceuticals are used for both therapeutic and diagnostic
molecular imaging applications. Pharmaceutical contract
manufacturing services are provided through the DRAXIS Pharma
division and radiopharmaceuticals are developed, produced, and sold
through the DRAXIMAGE division. DRAXIS employs approximately 500
staff in its Montreal facility. For additional information please
visit http://www.draxis.com/ Caution Concerning Forward-Looking
Statements This news release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act") and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and as
contemplated under other applicable securities legislation. These
statements can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "anticipate,"
"estimate," "continue," "plan," "intend," "believe" or other
similar words. These statements discuss future expectations
concerning results of operations or financial condition or provide
other forward-looking information. Our actual results, performance
or achievements could be significantly different from the results
expressed in, or implied by, those forward-looking statements. You
should not place undue reliance on any forward-looking statement,
which speaks only as of the date made. These statements are not
guarantees of future performance. By their nature, forward-looking
statements involve numerous assumptions, known and unknown risks,
uncertainties and other factors that may cause the actual results
or performance of the Company to be materially different from such
statements or from any future results or performance implied
thereby. Factors that could cause the Company's results or
performance to differ materially from a conclusion, forecast or
projection in the forward-looking statements include, but are not
limited to: - the achievement of desired clinical trial results
related to the Company's pipeline products; - timely regulatory
approval of the Company's products; - the ability to comply with
regulatory requirements applicable to the manufacture and marketing
of the Company's products; - the Company's ability to obtain and
enforce effective patents; - the non-infringement of third party
patents or proprietary rights by the Company and its products; -
factors beyond our control that could cause interruptions in our
operations in our single manufacturing facility (including, without
limitation, material equipment breakdowns); - reimbursement
policies related to health care; - the establishment and
maintenance of strategic collaborative and commercial
relationships; - the Company's dependence on a small number of key
customers; - the disclosure of confidential information by our
collaborators, employees or consultants; - the preservation of
healthy working relationships with the Company's union and
employees; - the Company's ability to grow the business; - the
fluctuation of our financial results and exchange and interest rate
fluctuations; - the adaptation to changing technologies; - the loss
of key personnel; - the avoidance of product liability claims; -
the loss incurred if current lawsuits against us succeed; - the
volatility of the price of our common shares; - market acceptance
of the Company's products; and - the risks described in "Item 3.
Key Information - Risk Factors" in the Annual Report Form 20-F
filed by the Company with the United States Securities and Exchange
Commission and which is also filed as the Company's Annual
Information Form with Canadian securities regulators. For
additional information with respect to certain of these and other
factors, and relating to the Company generally, reference is made
to the Company's most recent filings with the United States
Securities and Exchange Commission (available on EDGAR at
http://www.sec.gov/) and the filings made by the Company with
Canadian securities regulators (available on SEDAR at
http://www.sedar.com/). The forward-looking statements contained in
this new release represent the Company's expectations as at
September 4, 2007. Unless otherwise required by applicable
securities laws, the Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. DATASOURCE:
DRAXIS Health Inc. CONTACT: DRAXIS Health Inc., Jerry Ormiston,
Executive Director, Investor Relations, Phone: 1-877-441-1984
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