Draxis Health selected by Johnson and Johnson Consumer Companies, Inc. for major contract manufacturing relationship



    Multi-year outsourcing agreement for non-sterile products valued in
    excess of US$120 million

    MISSISSAUGA, ON, and MONTREAL, Sept. 5 /CNW/ - 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 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 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 www.sec.gov) and the filings made by the
Company with Canadian securities regulators (available on SEDAR at
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.

    %SEDAR: 00004049EF




For further information:

For further information: DRAXIS Health Inc., Jerry Ormiston, Executive
Director, Investor Relations, Phone: 1-877-441-1984

Organization Profile

DRAXIS SPECIALTY PHARMACEUTICALS INC.

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