FSI ANNOUNCES CAPEX EXPENDITURE TO ACQUIRE A VIAL FILLING LINE FOR INJECTABLE DRUGS SUCH AS GLP1 FOR WEIGHT LOSS
June 05 2024 - 10:58AM
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
International6001 54th
Ave, Taber, Alberta, CANADA T1G
1X4
Company Contacts
Jason BloomToll Free: 800.661.3560Fax:
403.223.2905Email: info@flexiblesolutions.com
To find out more information about Flexible
Solutions and our products please visit
www.flexiblesolutions.com
If you have received this news release by
mistake or if you would like to be removed from our update list
please reply to: info@flexiblesolutions.com
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