September 5, 2013 / 11:59 AM / 5 years ago

Isotope maker Nordion's profit jumps on sale of unit

(Reuters) - Nordion Inc, a provider of isotopes used in medical imaging, reported a big jump in quarterly profit on Thursday after recording an after-tax gain of about $182 million on the sale of its targeted therapies business.

The Canadian company’s results beat market expectations and its shares climbed 1.8 percent to C$8.39 on the Toronto Stock Exchange.

Nordion completed the $200-million sale of its targeted therapies division to British health care company BTG Plc in July. The business’s sole product was the liver cancer therapy TheraSphere.

Nordion Chief Executive Steve West said the company will retain the net cash proceeds of $190 million from the sale. He said the company had rejected distributing the cash to shareholders because of the tax implications. Nordion is also awaiting the completion a strategic review of its operations, which might set spending priorities.

West said Nordion has no current plans for the cash, after analysts asked on a conference call if the strategic review could result in acquisitions.

Net profit rose to $180.4 million, or $2.91 per share, in the company’s third quarter from $12.3 million, or 20 cents per share, a year earlier.

On an adjusted basis, Nordion’s profit fell 19 percent to $12.6 million, or 20 cents per share, in the quarter.

Revenue rose 7 percent to $71.7 million.

Analysts were expecting Nordion to earn 18 cents a share, on revenue of $61.1 million, according to Thomson Reuters I/B/E/S.

Nordion is one of the world’s leading producers of molybdenum-99, used in medical imaging, and also designs and constructs commercial gamma sterilization systems.

It is a leading supplier of cobalt-60, the isotope that produces gamma radiation used to destroy harmful micro organisms.

Revenue at the company’s sterilization technologies business increased 14 percent, while it rose 9 percent at the medical isotopes business.

For raw material for its isotopes, the company depends on an aging nuclear reactor operated by state-owned Atomic Energy of Canada Ltd (AECL) in Chalk River, Ontario.

Nordion said in August it had settled a five-year-old lawsuit with AECL, receiving C$15 million in settlement of its C$244 million claim.

That settlement opens the door for Nordion to discuss agreements with alternative isotope suppliers once its deal with AECL expires in 2016, West said.

“If you’re married, and you’re going through an ugly divorce, there aren’t many people who want to date you,” he said. “We’ve finalized the settlement terms and now we’re open for dating.”

Reporting by Rod Nickel in Winnipeg, Manitoba and Bhaswati Mukhopadhyay in Bangalore; Editing by Joyjeet Das and Peter Galloway

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