News Release

For Immediate Release
December 3, 2004

Introducing Cape Breton’s New Pharmaceutical Industry

North Sydney, NS –– Two exciting projects that will lay the groundwork for a pharmaceutical cluster on Cape Breton Island were announced today by the Honourable Joseph McGuire, Minister for Enterprise Cape Breton Corporation (ECBC), the Cape Breton Growth Fund (CBGF) and ACOA, as well as Nova Scotia Premier John Hamm.

Keata Pharma Inc. (Keata), a contract pharmaceutical manufacturing company is establishing a manufacturing operation in the Northside Industrial Park. Anticipated to bring up to 165 new jobs over three years to the Cape Breton Regional Municipality, the project is receiving financial assistance from the CBGF, ECBC, ACOA and Nova Scotia Business Inc. (NSBI).

In a related project, the University College of Cape Breton (UCCB), in partnership with the company, will launch a new Biotechnology and Pharmaceutical Technology Certificate Program to train potential employees. This project is being supported through ECBC.

PharmEng Technology Inc. (PharmEng), the parent company of Keata, will also establish a pharmaceutical consulting office in Cape Breton employing an additional 12 professional staff. PharmEng is an established pharmaceutical and biotechnology consulting firm based in Toronto, with offices in Montreal, Winnipeg, Vancouver and China.

“These exciting projects will build on the existing strengths of our workforce and bring a new industry to Cape Breton,” said Minister McGuire. “The joint venture with UCCB will enable Keata to recruit and train locally, resulting in a pool of highly skilled pharmaceutical personnel. With this investment, Keata is demonstrating its belief in the power of Cape Breton. I would like to recognize the efforts of the CBGF in recruiting this company to the community.”
“This project is a great example of how partnership is working to create local opportunity by attracting growth-oriented, export-driven companies like PharmEng to Nova Scotia,” said Premier Hamm. “Led by our business arm, Nova Scotia Business Inc., the province is proud to be part of the team that is injecting new dynamism and diversity into the Cape Breton and Nova Scotia economies. Initiatives such as this represent an evolution of business thinking and business development.”

Keata’s move to Cape Breton will better position the company to diversify its products and services. Over the next year, the company will acquire equipment and necessary approvals to provide formulation development, testing services and to manufacture and package products in solid and liquid dosage forms. Keata’s long-term goal is to produce more technologically challenging products and develop capabilities in other dosage forms, such as suppositories, topicals and injectables.

UCCB’s Biotechnology and Pharmaceutical Technology Certificate Program will be taught jointly by PharmEng and UCCB. Up to 25 students will be accepted into the program annually. It is anticipated that PharmEng will offer employment to at least 60% of the first graduating class.

“UCCB’s coordination of a Biotechnology and Pharmaceutical Technology Certificate Program will provide the necessary skills training for these positions,” said John Harker, President of UCCB. “With Keata PharmEng’s commitment to hire students of this innovative program, it is refreshing to know that many of these graduates will be employed right here at home. We see UCCB as an emerging force in the advanced technology transfer and the future for UCCB and the Island will be built on announcements of the kind we are celebrating today.”

The PharmEng consulting office will initially provide the technical support for the Keata plant during construction and start up. Over time the office will provide consulting services to clients in Atlantic Canada, the Eastern United States and other international markets.

“We feel that our Cape Breton location will provide us with significant long-term cost advantages and access to a highly skilled labour force,” says
Alan Kwong, Managing Director of PharmEng. “Our new location on the Island will help us better serve the growing global pharmaceutical manufacturing market that is valued at $50 billion annually.”

The total start up cost of the Keata project is $12.5 million, and includes construction of a new 35,000 square foot facility, equipment, regulatory compliance and marketing. The plant will be operational early in 2006. To assist with costs, the CBGF and ECBC are investing a total of $6.25 million by way of repayable loans.

NSBI will assist the company in the creation of new jobs through a payroll rebate of up to $3,590,800. Performance based, the NSBI payroll rebate will be paid annually over a period of five years as job creation goals are achieved. The agreement provides for incentives for up to 300 jobs.

The total cost of launching the UCCB certificate program is $500,000. UCCB will receive a non-repayable contribution of $375,000 through the Atlantic Canada Opportunities Agency’s Business Development Program (BDP). In addition, PharmEng will receive a non-repayable contribution of $125,000 through ECBC.

-30-

FOR BROADCAST USE ONLY:

TWO EXCITING PROJECTS THAT WILL LAY THE GROUNDWORK FOR A PHARMACEUTICAL CLUSTER ON CAPE BRETON ISLAND WERE ANNOUNCED TODAY BY ECBC MINISTER, JOSEPH MCGUIRE AND NOVA SCOTIA PREMIER JOHN HAMM.

KEATA PHARMA INC., A CONTRACT PHARMACEUTICAL MANUFACTURER, IS LOCATING IN THE NORTHSIDE INDUSTRIAL PARK, CREATING AN ANTICIPATED 165 NEW PHARMACEUTICAL JOBS.

IN A RELATED PROJECT, UCCB, IN PARTNERSHIP WITH THE COMPANY WILL LAUNCH A NEW BIOTECHNOLOGY AND PHARMACEUTICAL TECHNOLOGY CERTIFICATE PROGRAM TO TRAIN POTENTIAL EMPLOYEES.

IN ADDITION, PHARMENG TECHNOLOGY INC., KEATA’S PARENT COMPANY, WILL ALSO ESTABLISH A PHARMACEUTICAL CONSULTING OFFICE IN CAPE BRETON EMPLOYING AN ADDITIONAL 12 PROFESSIONAL STAFF.

THE TOTAL START UP COST OF THE KEATA PROJECT IS $12.5 MILLION, AND INCLUDES CONSTRUCTION OF A NEW FACILITY, EQUIPMENT, REGULATORY COMPLIANCE AND MARKETING. THE PLANT WILL BE OPERATIONAL EARLY IN 2006. TO ASSIST WITH COSTS, THE CBGF AND ECBC ARE INVESTING A TOTAL OF $6.25 MILLION BY WAY OF REPAYABLE LOANS.
NSBI IS PROVIDING A PAYROLL REBATE OF UP TO $3.5 MILLION OVER THE FIVE YEAR AGREEMENT.

THE TOTAL COST OF LAUNCHING THE UCCB PROGRAM IS $500,000. ECBC WILL PROVIDE UCCB WITH A NON-REPAYABLE CONTRIBUTION OF $375,000. IN ADDITION, PHARMENG TECHNOLOGY INC. WILL RECEIVE A NON-REPAYABLE CONTRIBUTION OF $125,000 THROUGH ECBC.

FOR ADDITIONAL INFORMATION CONTACT:

Alan Kwong, Managing Director
PharmEng Technology Inc.
(416) 618-3218

Valérie Poulin
Director of Communications
Office of the Honourable Joseph McGuire
Minister of Atlantic Canada Opportunities Agency
(613) 941-7241

Patricia Field
Communications – NSBI
(902) 424-6124

D.A. Landry
Communications – CBGF/ECBC
(902) 564-3617

Paula MacNeil
Communications – UCCB
(902) 563-1638