January 26, 2009 at 07:00 AM EST
B&W and Covidien to Develop U.S. Source of Key Medical Isotope

Babcock & Wilcox Technical Services Group, Inc. (B&W TSG), a major operating unit of The Babcock & Wilcox Company (B&W), has signed an agreement with Covidien (NYSE:COV, BSX: COV) to develop technology for the manufacture of molybdenum-99 (Mo-99), the parent isotope of technetium-99m (Tc-99m), the most widely used radioisotope in the world for molecular imaging and nuclear medicine procedures. The program has the potential to supply more than 50 percent of U.S. demand for Mo-99. B&W is a subsidiary of McDermott International, Inc. (NYSE: MDR).

Under the agreement, B&W TSG and Mallinckrodt Inc., a subsidiary of Covidien, will collaborate on the development of solution-based reactor technology for medical isotope production. The agreement combines Covidien’s expertise in radiopharmaceutical production and global regulatory approvals with B&W’s patented liquid phase nuclear technology. This reactor technology uses low enriched uranium (LEU) and generates only about 1 percent of the radioactive waste compared to spent fuel and processing wastes generated by current reactor production of Mo-99, most of which uses highly enriched uranium (HEU).

This collaboration is an initial step toward establishing a large-scale U.S. supply of medical isotopes. Currently, the U.S. imports 100 percent of the Mo-99 supply, which is manufactured at a handful of aging nuclear reactors. Unplanned shutdowns of these reactors for maintenance needs or safety-related issues have led to periodic shortages of medical isotopes. Because Mo-99 has a half-life of only 66 hours, shortages have an almost immediate impact on the ability of physicians to perform critical patient procedures. Besides providing a reliable, domestic supply of the medical isotope, the program will support the U.S. National Nuclear Security Administration’s nonproliferation efforts.

“For more than 50 years, B&W has been a leader in developing and deploying technologies that contribute to the nuclear industry through government initiatives and commercial endeavors,” said S. Robert Cochran, President of B&W TSG. “This is a significant advancement in technology that B&W is proud to lead. Working in concert with Covidien, we believe this achievement will have a great impact on the medical and nuclear industries.”

“Our agreement with B&W is another demonstration of how Covidien’s commitment to innovation is laying the foundation for significant advances in medical imaging,” said Timothy R. Wright, President, Pharmaceutical Products and Imaging Solutions, Covidien. “We’re focused on delivering the critical solutions clinicians need to provide insightful diagnoses and quality treatments for patients. With technology advances such as this, we hope to improve the reliability of medical isotope supply, which is of vital importance to the nuclear medicine industry.”

Approximately 16 million U.S. patients benefit annually from nuclear medicine procedures that are performed to diagnose heart disease or to detect and treat cancer and other medical conditions. Tc-99m, which is derived from Mo-99, is used in approximately 80 percent of these medical imaging procedures.1 Current production methods for imported Mo-99 involve extraction from HEU targets that have been irradiated in a reactor. Mo-99 is used to manufacture generators, which are distributed to hospitals and radiopharmacies as a source of Tc-99m.

1. Arlington Medical Resources, Diagnostic Imaging Market Guide, 2008

About B&W

The Babcock & Wilcox Company (B&W), a major operating subsidiary of McDermott International, Inc., is a leader in advanced energy technology innovation and service, primarily in nuclear and fossil power. Providing quality products and technical services to commercial and government customers, B&W is focused on issues such as energy efficiency, clean air, global market competitiveness, and safe and secure resolution for nuclear waste. B&W has locations worldwide and employs more than 20,000 people. The company is headquartered in Lynchburg, Va., and located on the Internet at www.babcock.com.

About Covidien

Covidien is a leading global healthcare products company that creates innovative medical solutions for better patient outcomes and delivers value through clinical leadership and excellence. Covidien manufactures, distributes and services a diverse range of industry-leading product lines in four segments: Medical Devices, Imaging Solutions, Pharmaceutical Products and Medical Supplies. With 2008 revenue of nearly $10 billion, Covidien has more than 41,000 employees worldwide in 59 countries, and its products are sold in over 140 countries. More information about Covidien is available at www.covidien.com

FORWARD-LOOKING STATEMENTS

Any statements contained in this communication that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on management’s current beliefs and expectations, but are subject to a number of risks, uncertainties and changes in circumstances, which may cause actual results or company actions to differ materially from what is expressed or implied by these statements. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, the failure of Covidien and B&W TSG to work together effectively, failure to develop the proposed technology, complex or costly regulation, intellectual property issues, safety concerns, supply or distribution costs of complications or competition from third parties. We disclaim any obligation to update these forward-looking statements other than as required by law.

Contacts:

B&W / McDermott:
Jud Simmons, 434-522-6462
B&W Public Affairs Manager
hjsimmons@babcock.com
or
McDermott
Jay Roueche, 281-870-5011
Vice President, Investor Relations
jroueche@mcdermott.com
or
Covidien:
Eric Kraus, 508-261-8305
Senior Vice President, Corporate Communications
eric.kraus@covidien.com
or
Coleman Lannum, 508-452-4343
CFA, Vice President, Investor Relations
cole.lannum@covidien.com
or
Bruce Farmer, 508-452-4372
Vice President, Public Relations
bruce.farmer@covidien.com
or
Wayde McMillan, 508-452-4387
Director, Investor Relations
wayde.mcmillan@covidien.com
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