BWX Technologies said Wednesday it has pushed back to mid-2022 its schedule for beginning commercial output of the medical isotope molybdenum-99 (Mo-99), partly due to supply issues created by the COVID-19 pandemic.
Discussing the company’s latest earnings in a conference call with financial analysts, BWXT President and CEO Rex Geveden reaffirmed comments he made in February that progress in standing up the program has been slower than anticipated due to “programmatic challenges.”
Those issues have been exacerbated by delays in obtaining certain parts from manufacturers in Europe and Canada, according to Geveden.
“We have now completed a comprehensive rebaseline of the program considering the foregoing factors and other risks that could manifest, and we now project to reach commercial readiness in midyear 2022,” he said. “Despite the delays challenges, we remain very enthusiastic about the new product line, the business case and our competitive position in the market.”
Lynchburg, Va.-based BWXT is best known as a federal contractor, with clients including the Department of Energy and the Pentagon. But it also intends to be a player in the burgeoning domestic industry for production of Mo-99, which decays into the widely used medical imaging isotope techntetium-99m.
The company’s neutron-capture production process would not use weapon-grade uranium, avoiding proliferation concerns. It is also intended to reduce waste levels and manufacturing expenses relative to the competition.
Molybdenum-99 would be generated at the Darlington nuclear power plant operated by Ontario Power Generation, then processed into techntetium-99m at a Kanata, Ontario, facility that BWXT owns via its 2018 acquisition of Sotera Health’s Nordion medical isotope business.
As of June 2018, management had forecast beginning production by the end of 2019. By March 2019, the company had previewed initial sales by the first quarter of 2021. Commercial readiness will be the point at which BWXT can manufacture and sell its technetium-99m generators, spokeswoman Natalie Cutler said by email Thursday.
“The re-baselining effort took into account a detailed review of all cost, schedule and risk management elements of the project, including the impact COVID-19 is having on the completion of our Tc-99m processing and manufacturing facilities in Kanata, Ontario,” Cutler wrote, without citing the previous baseline date.
The current supply issues specifically involve hot cells to be used in processing at Kanata, along with autoclaves and other components for the hot cells, Geveden said. Those goods are provided by two Italian suppliers and a German supplier, he said.
“And some of those factories slowed down or shut down during the peak of the pandemic crisis,” according to the CEO. ”They are more or less back to normal now. But we factored those delays into the product launch date.”
Geveden attributed one-quarter of the overall program schedule slip to “COVID effects,” with the rest from separate issues. He characterized the latest schedule as conservative, with some reserve, suggesting that BWXT might claw back part of that time.
“So we can completely envelope what we perceive as any uncertainty in that timeline. We have also accounted for and costed from a schedule and dollar perspective, any technical risk that relates to the conversion of design and into manufacturing and ultimately, integration into our factories,” Geveden told investors. “And so we’ve laid out, for ourselves, a pretty conservative timeline here, and I think appropriately so because we certainly need to have this one right as we rebaselined the program for our investors and for our board and for our team.”
A number of U.S. companies aim to reconstitute the domestic supply of molybdenum-99, which was absent for decades starting in 1989. NorthStar Medical Radioisotopes was first out of the gate with production.
The Beloit, Wis., company says it has maintained its full manufacturing output under federal classification as an essential business, with isotope processing through the University of Missouri Research Reactor in Columbia, Mo. Construction of a new on-site production facility also continues without pause, with commercial operations scheduled to begin in 2023, CEO Steve Merrick told the Beloit Daily News.
SHINE Medical Technologies is building its production plant in Janesville, Wis. The company did not respond by deadline Friday to a query regarding any impacts on its schedule from the COVID-19 pandemic.
BWX Technologies has estimated the value of the technetium-99m generator market at about $400 million. Its initial focus will be on the North American market, which it has valued at $160 million.
