FSI ANNOUNCES CAPEX EXPENDITURE TO ACQUIRE A VIAL FILLING LINE FOR INJECTABLE DRUGS SUCH AS GLP1 FOR WEIGHT LOSS
VICTORIA, BRITISH COLUMBIA, June 05, 2024 (GLOBE NEWSWIRE) -- FLEXIBLE SOLUTIONS INTERNATIONAL, INC. (NYSE-AMERICAN: FSI), is the developer and manufacturer of biodegradable polymers for oil extraction, detergent ingredients and water treatment as well as crop nutrient availability chemistry. Flexible Solutions also manufactures biodegradable and environmentally safe water and energy conservation technologies. FSI is increasing its presense in the food and nutrition supplement manufacturing markets.
Today the Company announces the acquisition of a production line capable of filling large numbers of vials with injectable drugs.
The CAPEX disclosed in this news release is material. Furthermore, the Company believes that it should disclose FSI's potential advancement into drug compounding operations in order to prevent accidental partial disclosure during the course of our investigations and due diligence in the business of sterile drug compounding.
Mr. Dan O'Brien, CEO, comments, "The drug compounding industry is a logical progression for FSI. But, it is a capital intensive, high risk, high reward business. We hope to de-risk our possible entry by securing sales prior to further expenditure and by looking for partners." Mr. O'Brien continues, "Only if we can de-risk sufficiently, will we proceed."
FSI has progressed from good manufacturing practice to food grade certification and production over the last 3 years. The next, relatively small, step of certification is advancing to a 503B sterile drug compounding clean room. We have developed the skills to operate in clean room environments as part of our food/nutrition division and are comfortable that our skills are transferable to 503B drug operations.
FSI has identified a very large revenue and profit opportunity in injectable diabetes/weight loss drugs. These drugs and many others are in short supply. If possible, we would like to expand into this market. This does not mean that we will, only that we see it as the most profitable expansion of our business that might become accessible in the next several years. Diabetes/weight loss drugs represent a market place of many tens of billions, dominated by major drug companies, but still with transformational revenue streams available to small companies like FSI.
Clean room production of injectable drugs requires a fully automated production line. Currently, wait times for such lines are in the range of 18 months and the cost for a line capable of 150 vials per minute is $13 - $15 million. As part of our due diligence in this business, FSI found a complete, nearly unused line of this size for US$2.5 million. Because this represented a saving of $10 million or more and a saving of many months – should we decide to expand – we bought it and take possession in July. This purchase is the CAPEX announced by this news release.
This production line can only realistically operate a maximum of 10 hours a day 250 days a year using two shifts. Even so, this represents 22.5 million vials per year.
Once again, we caution you that the purchase of this line, combined with our skill set and a market need for more injectable drugs, does not mean that this project will proceed. It's an option; not a given. Management will continue its diligence program and only move forward if the reasonably expected reward to the shareholders is judged to be far higher than the risk.
Our time frame for this expansion, should it take place, is one to three years. No revenue is possible for one year after a decision is made to proceed. The minimum time of one year to production is not guaranteed because of regulatory approval requirements.
Risk must be controlled – substantial additional capital will be needed if we proceed and significant management time will be redirected from our other growth opportunities. If the cost in capital or management is too high, an expansion in this market will be delayed until conditions are favorable.
Sales: An expansion of this magnitude by FSI must be backed by sales in order to reduce risk. Efforts to obtain firm sales, subject to delivery, are underway. Obtaining firm purchase orders are not certain and lack of sales may delay expansion or cause us not to proceed. It may be prudent to find a joint venture partner with sales experience in the industry if, such a partner can be shown to reduce risk more than they reduce reward.
About Flexible Solutions International
Flexible Solutions International, Inc. (www.flexiblesolutions.com), based in Victoria, British Columbia, is an environmental technology company. The Company's NanoChem Solutions Inc. subsidiary specializes in biodegradable, water-soluble products utilizing thermal polyaspartate (TPA) biopolymers. TPA beta-proteins are manufactured from the common biological amino acid, L-aspartic and have wide usage including scale inhibitors, detergent ingredients, water treatment and crop enhancement. Along with TPA, this division started producing other crop enhancement products as well. In 2022, the Company entered the food and nutrition markets by obtaining FDA food grade approval for the Peru IL plant. The other divisions manufacture energy and water conservation products for drinking water, agriculture, industrial markets and swimming pools throughout the world.
Safe Harbor Provision
The Private Securities Litigation Reform Act of 1995 provides a "Safe Harbor" for forward-looking statements. Certain of the statements contained herein, which are not historical facts, are forward looking statement with respect to events, the occurrence of which involve risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. Information concerning potential factors that could affect the company is detailed from time to time in the company's reports filed with the Securities and Exchange Commission.
Flexible Solutions International
6001 54th Ave, Taber, Alberta, CANADA T1G 1X4
Company Contacts
Jason Bloom
Toll Free: 800.661.3560
Fax: 403.223.2905
Email: [email protected]
To find out more information about Flexible Solutions and our products please visit www.flexiblesolutions.com
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