Russian deal helps ease isotope shortage

Article Excerpt

MDS INC. $10 (Toronto symbol MDS; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 67.2 million; Market cap: $672.0 million; Price-to-sales ratio: 3.4; No dividends paid since October 2006; SI Rating: Extra Risk) supplies medical isotopes for research, detecting cancer and sterilizing surgical tools. The company gets most of its isotopes from the Chalk River nuclear reactor near Ottawa. In May 2009, Atomic Energy of Canada Ltd., which operates the reactor, shut down Chalk River to repair a water leak. Atomic Energy restarted the reactor in August 2010, but plans to permanently close it in 2016. That’s why MDS recently signed a new deal to buy isotopes from Rosatom State Corp., a Russian state-owned company. The deal gives MDS the exclusive right to distribute Rosatom’s isotopes outside of Russia until 2020. New suppliers help lower MDS’s reliance on the aging Chalk River reactor. However, it still needs to find more new isotope sources. MDS is a hold. hold…