Draxis Extends J&J Supply Pact

Draxis Pharma has expanded its existing contract manufacturing relationship with Johnson & Johnson Consumer Companies, Inc. to provide commercial manufacturing services for multiple non-sterile specialty semi-solid products currently marketed in the U.S.
    
The new contract runs to the end of 2013 and 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 during this five-year period is expected to generate more than $120 million in revenues. The transfer of equipment and production technologies is expected to generate approximately $6 to $8 million in revenues during 2007 and 2008.  
    
“The signing of this contract is a reflection of the solid business model at Draxis,” said Dr. Martin Barkin, president and chief executive officer of Draxis Health. “We are honored 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.”
    
Commercial production of the products is scheduled to start in late 2008 and ramp up to achieve near full utilization of existing capacity for non-sterile semi-solid products by mid-2009. A second Draxis facility in the Montreal area will be required to meet increased logistics and secondary packaging activities and is expected to open during the summer of 2008. All products will be formulated and filled in the existing facility in Kirkland, Quebec.