Patheon has entered into a five-year master supply agreement with Merck & Co., Inc. Patheon will provide commercial manufacturing and pharmaceutical development services, and Merck has also selected Patheon as one of the company’s strategic partners for commercial manufacturing and pharmaceutical development services.

The new master supply agreement is designed to facilitate the inclusion of additional products and projects as Merck implements a new strategic plan, which includes leveraging external capabilities and capacity. As a strategic partner for Merck, Patheon will be provided the opportunity to participate in future commercial manufacturing and appropriate product development projects.

“As Merck implements its new supply strategy, we look forward to working with top-tier manufacturers, such as Patheon, to more effectively leverage external manufacturing across a broad spectrum of capabilities,” said Willie A. Deese, president, Merck Manufacturing Division, Merck & Co.

Merck has awarded Patheon three new projects as the first step in this new relationship. One project is a late-stage development product for Patheon’s Caguas, Puerto Rico, facility. A second project involves activity at Patheon’s Cincinnati facility and a third project involves activity at Patheon’s Toronto Regional Operations in Mississauga, Canada. These projects are expected to generate commercial revenues for Patheon in fiscal year 2007, if regulatory approvals for these products are obtained within the planned timelines. Patheon is currently providing development services in connection with these projects.

“We are very pleased that we are building on the strong foundation established by Patheon’s subsidiary MOVA and look forward to the opportunity to deepen our relationship with Merck as a strategic supplier of commercial manufacturing and development services in the future,” commented Robert Tedford, chief executive officer, Patheon. “This agreement recognizes the value of Patheon’s full-service, value-added approach in satisfying our clients’ needs.”