UPDATE 1-Cardinal Health warns clients of isotope shortage

* Shortage this week was "most significant" yet - company

* Cardinal canceled all July 7-8 bulk orders of isotope

* Company cut customers' usual orders by half

* Shares down 0.34 percent (Adds background, details, stock move)

By Julie Steenhuysen

CHICAGO, July 9 (Reuters) - Cardinal Health Inc (CAH.N) warned customers it was "critically short" of a medical isotope used in scores of nuclear imaging tests due to the shutdown of a reactor in Canada that makes a third of the world's medical isotope supply.

In a July 7 letter to customers obtained by Reuters, the company's Nuclear Pharmacy Services unit in New York warned that on July 7-8 it would experience "the most significant shortage we have seen to date."

Nick Tucker, a supervisor in the Bronx, New York unit confirmed the shortage, which stems from the May 17 shutdown of a nuclear reactor in Canada that produces the large isotope supply.

Only five aging nuclear reactors produce molybdenum nuclear isotopes used in medical imaging tests.

Atomic Energy of Canada Ltd said on Wednesday it expects its Chalk River nuclear reactor to be off line until late 2009, knocking out a key supplier of medical isotopes to North America. The United States has no domestic supply.

Cardinal distributes the isotopes to a national network of nearly 160 nuclear pharmacies. The company offers several heart imaging agents including Myoview and Cardiolite, which rely on a byproduct of nuclear isotopes called Technetium.

Cardinal told clients in the letter it hoped the supply situation would ease this week.

For July 7-8, it canceled all bulk orders of Technetium, and limited bulk doses of Cardiolite and Myoview.

The company also said it was forced to limit the number of doses for each customer to about half of their usual order.

Cardinal's shares slipped 10 cents to $29.73 in Thursday afternoon trading on the New York Stock Exchange. (Reporting by Julie Steenhuysen; editing by Leslie Gevirtz, Bernard Orr)