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A Canadian reactor that is a vital producer of medical isotopes will likely be unavailable until the end of July, stretching a repair outage that is contributing to serious shortages and snarling the supply chain.

This is months longer than recently expected, which means the Canadian outage will now overlap for several months with an outage at the world's other key reactor, which is in the Netherlands, and sidelining more than half the globe's production capacity for material used in important medical scans. Covidien PLC (COV) and Cardinal Health Inc. (CAH) are among the companies affected by supply shortages.

These shortages are acute in the U.S., which depends heavily on these two reactors for a product used commonly in scans for heart problems, bone cancer and other issues. The longer outage will lengthen an already serious situation.

This week's shortages have been "the most critical in history," with only 10% to 20% of demand being met, said Jeffrey Norenberg, who directs the National Association of Nuclear Pharmacies trade group.

The National Research Universal reactor in Ontario, run by Atomic Energy of Canada Ltd., shut in May last year due to a heavy water leak. There were originally fears the more than 50-year-old plant would never restart, and while Atomic Energy of Canada did launch a repair plan, the schedule has been stretched multiple times.

It was recently hoped the plant would restart this May. But in reviewing certain repair work that is still needed, Atomic Energy of Canada projected on Thursday the reactor "will resume isotope supply by the end of July."

"The new schedule has built in prudent contingency reflecting the difficulty inherent in these final repairs," the reactor operator said in a press release.

The facility produces a material called molybdenum-99 that decays into technetium-99m, which is the world's most commonly used medical-scanning isotope. MDS Inc.'s (MDZ, MDS.T) Nordion unit performs additional processing of the material and then two companies--Covidien and privately held Lantheus Medical Imaging Inc.--make generators that produce the medical isotope.

Cardinal Health is a major operator of nuclear pharmacies that distribute this material.

Because these products have a very short life span, they can't be stockpiled and must be continuously produced. But the production line has been hit multiple times in recent years by outages among the small fleet of aging reactors that supply the global market.

The Canadian outage is exacerbated by the fact that the Dutch plant, the world's other major producer, shut for a repair outage in February that is expected to last until August. These two plants traditionally provide about 65% of the world's medical isotope supplies.

Covidien recently announced it found a way to plug some holes by tapping a reactor in Poland. It received permission from U.S. and Canadian health authorities earlier this month to bring in material from that plant.

According to Norenberg, who also has multiple positions at the Society of Nuclear Medicine and is a radiopharmaceutical scientist in New Mexico, doctors have been scrambling to find other ways to conduct scans. There is an older material available for heart scans, for example, but it doesn't work as well as technetium-99m, Norenberg said.

The shortages drive up product prices throughout the supply chain. The price pharmacies pay for generators has quadrupled in the last couple years, Norenberg noted.

"We're forced to accept the fact that there are no immediate solutions that will totally fix this problem," he said.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

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