DRAXIS Breaks Ground For Its Second Facility

DRAXIS Health Inc., has initiated construction of a 77,000 square foot new secondary packaging and warehousing facility in the Montreal area to aid DRAXIS in fulfilling its obligation under its recently announced contract to produce a broad portfolio of multiple non-sterile specialty semi-solid products for Johnson & Johnson Consumer Companies, Inc. The new facility is expected to be completed by mid-2008, after which equipment will be installed and validated to ensure compliance with applicable regulatory requirements.

The new facility has been custom designed by and is being built by Montreal based developer Broccolini Construction Inc. specifically to meet the needs of DRAXIS Health with respect to this major new contract but will be owned by the Broccolini Group of Companies and leased to DRAXIS under a 7 year agreement with options to renew. The facility will be situated in the Montreal area in the community of St-Anne-de-Bellevue close to major highway access and within 10 kilometers (6 miles) of the main DRAXIS production facility in Kirkland, just outside Montreal.

Initially, DRAXIS plans to have approximately 50 employees located at this second facility; part of the 80 to 100 new employees that are expected to be hired for this contract. Activities to transfer the manufacture of products from existing locations to DRAXIS have been ongoing during 2007 and will continue through 2008, leading to the planned start of commercial production early in 2009.

The contract to produce semi-solid specialty products calls for commercial production to start in 2009 and initially run for five years to the end of 2013. The contract is expected to generate at least $120M in revenues during the first five years of commercial production. Prior to commercial start up, approximately $6 to 8M of cumulative revenues is expected during the two year period of 2007 through 2008 related to manufacturing site transfer and process validation activities.

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.

SOURCE: DRAXIS Health Inc.