How a Wisconsin company figured out how to make nuclear isotopes — a vital component of heart scans

Each day in the United States, roughly 56,000 patients have a test that can help diagnose heart problems, cancer progression in bones and other medical conditions.

The most common version is a nuclear stress test that shows images of blood flow to the heart. Each test, or scan, uses a nuclear isotope that must be shipped from Europe, Australia or South Africa. It is not made in large quantities in the Western Hemisphere, and its supply — which comes from aging nuclear reactors — is increasingly precarious.

A Janesville company founded by a physicist who grew up in Brookfield is on track to change that.

Shine Medical Technologies began construction last spring on a plant — projected to cost more than $100 million — that could supply two-thirds of the U.S. demand for the isotope.

The company, which employs about 110 people and is growing, has raised an estimated $350 million so far, including a $150 million investment last November and a $50 million investment announced this month.

It hopes to begin commercial production in 2022, potentially beating several competitors to the U.S. market.

The plant will use technology developed by Phoenix, an affiliated company, that enables the isotope — called molybdenum-99, or Mo-99 — to be made commercially in a device about 4 feet across instead of in a nuclear reactor. 

Idea sprang from a house party

The idea for the technology came to Greg Piefer, the founder and CEO of Shine Medical and the founder of Phoenix, during a party at his house while he was earning a doctorate in nuclear engineering at the University of Wisconsin-Madison.

“The first drawing was on the back of an envelope, and it seemed like it would work,” Piefer said. “I did the math literally at that party. I pulled my laptop out.”

The revelation may have been the easy part. Piefer still had to figure out how to build the device — known as a gas-target neutron generator.

He also had to find the money to do it.

With the help of dozens of others, Piefer would overcome the technical and financial challenges. Both were abundant. 

“It was just hurdle after hurdle,” said Dick Leazer, the retired managing director of the Wisconsin Alumni Research Foundation and an early investor.

Money from family, friends

In 2005, Piefer founded Phoenix Nuclear Labs, now Phoenix LLC, to develop the neutron generator. He raised $100,000 from friends and family.

“I learned really good skills in grad school,” Piefer said. “Number one, I learned how to live on $15,000 of disposable income a year.”

Three years later, the company raised $200,000 from Wisconsin Investment Partners — an investment conservatively worth $5 million today.

Phoenix and later Shine would need tens of millions of dollars more, first to develop the technology and then to win regulatory approval for the isotope to be used in medical tests. And then it would need to raise more than $100 million to build a plant that could produce the isotope at a commercial scale.

For years, the company scraped together money. Piefer estimates that Phoenix and Shine Medical have more than 400 investors, most of whom live in Wisconsin. Some invested as little at $25,000 — the venture capital equivalent of holding a bake sale.

In its early days, the company bought much of its scientific equipment on eBay. The purchases included a specialized radiation detector that no longer worked. Phoenix paid $50 for the detector, which would cost about $50,000 new, and figured out how to fix it. The company still uses it. 

Phoenix started with four people. The fourth was Katrina Pitas, a physics major whom Piefer described as an extraordinary technical writer.

“Shine would not exist were it not for her efforts in the early days,” he said.

Piefer and Pitas, now vice president and general manager of Shine Therapeutics, a new division, ended up getting married. 

By 2008, Piefer realized that the technology could work. The young company also got lucky. 

That year, Atomic Energy of Canada shut down two reactors built to produce Mo-99, the nuclear isotope used in imaging tests, because their design was determined to be unsafe.

Atomic Energy of Canada had a long-term contract with a company that distributed the isotope. That would have prevented Phoenix from breaking into the market even if its technology was cleaner and less expensive.

The shutting down of the Canadian reactors suddenly opened a large and promising market for Phoenix’s technology.

Shine sets new focus

In 2010, Shine Medical was spun off from Phoenix to focus solely on producing Mo-99, the isotope required for roughly 80% of all nuclear medical tests and procedures.

(An isotope is a form of an element — think of the periodic table last seen in high school for most of us — that contains the same number of protons but a different number of neutrons in its nucleus.) 

Mo-99 deteriorates into technetium‑99m — a light-emitting isotope, known as Tc-99m, used in SPECT scans as well as other tests that show how certain organs work.

SPECT scans — for single-photon emission computerized tomography — produce images that show how blood flows to and through a heart and that diagnose and track the progression of cancer that has spread to the bones. 

The scans also are used for images of the liver, the respiratory system, thyroid and kidneys. And they can diagnose hidden bone fractures and show what areas of the brain are more or less active.

Millions of imaging scans per year

More than 20 million imaging tests in the U.S. and more than 40 million worldwide a year are done using Tc-99m.

“A nice rule of thumb is there is more than one patient treated every second around the world,” Piefer said.

UW Health in Madison does about 250 tests a week that use Tc-99m, said Scott Knishka, manager of nuclear pharmacy services at the UW School of Medicine and Public Health. Its Mo-99 comes from nuclear reactors in Europe.

Large hospitals, such as Froedtert Hospital, typically get weekly shipments of Mo-99 in so-called generators that produce Tc-99m. Other hospitals use commercial pharmacies that deliver scheduled doses of Tc-99m each day.

Mo-99 has a half-life of 66 hours — meaning that half of a shipment decays every 66 hours. After five and a half days, only a quarter remains. After a bit longer than eight days, only an eighth remains, and so on. 

By comparison, Tc-99m has a half-life of only six hours. That it ideal for medical tests, because it doesn't linger in the body, but impractical to ship. 

Security concerns lead to domestic push

The Department of Energy recognized the potential supply problems. The existing reactors that produce Mo-99 also needed highly enriched uranium — the form used to make nuclear bombs — that had to be exported. That presented a security risk.

In 2009, the National Nuclear Security Administration, a semi-autonomous agency within the department, began working with companies to encourage the development of technologies to produce Mo-99 domestically without highly enriched uranium.

In 2010, Shine partnered with the Morgridge Institute for Research at UW-Madison and was awarded a $25 million federal grant. NorthStar Medical Radioisotopes, a competitor based in Beloit, and other companies also received federal grants.

The grants were contingent on raising matching funds, and Shine was perpetually strapped for money. In 2014, it was millions of dollars in debt and out of money. Shine wouldn’t raise its share of the matching grant until 2016, but by then, two events had put the company on its way.

In 2015, GE Healthcare — with the help of Argonne National Laboratory — showed that Mo-99 produced using Shine’s technology could be substituted for Mo-99 produced in nuclear reactors. And in 2016, Shine received approval from the Nuclear Regulatory Commission to build a pilot demonstration plant.

Understanding how Shine produces Mo-99 may feel a bit like landing in physics class. At its simplest, Shine produces Mo-99 by using a so-called accelerator to create a beam of hydrogen isotopes that smash into a different hydrogen isotope at about 10 million miles per hour. 

This creates helium and free neutrons. The neutrons are passed into a tank of water that contains low-enriched uranium. The neutrons hit the uranium, splitting the atoms in a low-level nuclear reaction and creating multiple elements, including the isotope Mo-99.

The solution is drained after several days and run through a filter that extracts the Mo-99 and other isotopes, which also have medical uses, but allows the uranium to pass through.

The uranium and liquid is then reused, reducing waste and the amount of uranium needed.

All eight neutron generators planned for the new plant combined will produce 0.03% of the radioactivity that a nuclear power plant generates, Piefer said.

Puzzled by early failure

Piefer had worked on producing large quantities of medical isotopes from a neutron generator as a graduate student at UW — without success.

“There were reasons to believe that the device would work,” he said. “But it took a lot of scientific study to realize just why it wasn’t.”

The insight that he had that night during the party at his house was that they were trying to accelerate particles to a high speed and collide them with targets in the same physical space.

He realized that the particles couldn’t reach the necessary speed because they kept bumping into the targets.

“In hindsight, it seems obvious,” Piefer said. “Yet it took us quite a while to realize that.”

His solution: “Why don’t you accelerate over here and collide over there? And that is Phoenix’s technology in a nutshell.”

The challenge was figuring out how to do that.

“That is where the real trick is,” Piefer said, “and that’s why what Phoenix is doing is quite hard, actually.”

It required accelerating a beam of particles in a vacuum in one area and then moving the particles to another area that was at high pressure. And it required finding a way to do that without a physical barrier, because the beam was of such high power and intensity that it would burn a hole through one.

“I had a scheme in my head on how to do it,” Piefer said. “It was harder than I thought it would be.”

Phoenix, based in Monona, found a way to do this through a proprietary configuration of pipes, pumps and what is known as beamline geometry.

“That is a fundamental foundation of the intellectual property on which Phoenix was built,” said Evan Sengbusch, president of Phoenix, who has a doctorate in medical physics from UW-Madison.

Refining the technology that makes the beam “really small and well behaved” was the biggest challenge.

“That’s the black magic,” Piefer said.

“That’s where a lot of the true science comes in,” Sengbusch said.

New effort, new nuclear fusion record

This summer, Phoenix and Shine broke the world record for the strongest sustained nuclear fusion — essentially the first key step in the process of making Mo-99. The record had been in place since 1978 and previously was held by Lawrence Livermore National Laboratory in California.

Phoenix, which will make the eight generators for Shine's new manufacturing plant, employs 78 people, and has raised about $35 million from investors. The company designs and makes neutron generators for other applications, such as testing and imaging, for the military, nuclear and other industries. It has revenue of about $20 million a year and is close to breaking even. 

“We don’t believe that either of these companies are anywhere near close to our ceiling,” Sengbusch said

Phoenix now is overseen by Ross Radel. Piefer had tried to recruit Radel, who also has a doctorate in nuclear engineering from UW-Madison, when he started the company and had no money.

“I had a bunch of crazy dreams,” Piefer said, “and he had kids.”

Radel went to work for Sandia National Laboratories instead but joined Phoenix in 2010. 

Customers line up

Shine has agreements to supply Mo-99 with GE Healthcare, Lantheus Medical Imaging and HTA Co., the largest Chinese producer and distributor of radio-pharmaceuticals.

The global market for Mo-99 is estimated at $650 million. And Shine now is in a race with several competitors, including NorthStar in Beloit, to produce a domestic supply.

NorthStar Medical Radioisotopes began shipping small quantities of Mo-99 last November, becoming the first U.S. supplier in three decades.

The company, a subsidiary of NorthStar Medical Technologies, is backed by Hendricks Holding Company Inc., the investment arm of Diane Hendricks, the owner of ABC Supply Co. Inc. in Beloit and one of the state’s richest residents.

In April, Oberland Capital Management invested $75 million in NorthStar Medical Technologies. The company can draw on an additional $25 million before the end of next year at its option.

NorthStar doesn’t disclose how many customers it has, said Lisa Holst, vice president of sales and marketing.

The company’s Mo-99 is produced in a research reactor at the University of Missouri in Columbia and processed there.

NorthStar is installing equipment in Beloit to process the Mo-99 produced in Missouri. It also broke ground last month on a manufacturing plant in Beloit that would produce Mo-99 using a different technology.

Both the processing plant and manufacturing plant still must win approval from the Food and Drug Administration and the Nuclear Regulatory Commission.

NorthStar’s technology produces a diluted end-product that must be processed in equipment that its customers will need to have on-site and be trained to use.

Shine’s Mo-99 works in the existing supply chain, and the company is betting that this will give it a competitive advantage.

NorthStar is just one of several potential competitors, and Shine’s success isn’t guaranteed. But Piefer is confident the company has a good head start.

Scientist, and a good business mind

Without question, the people that Shine and Phoenix have been able to recruit account for much of the companies' success so far.

But Leazer, the former managing director of the Wisconsin Alumni Research Foundation, attributed a large share to Piefer.

“Any way you look at it, Greg Piefer is a very, very unusual guy,” he said.

Leazer praised his people skills and lack of ego.

Thomas “Rock” Mackie, professor emeritus at UW-Madison, co-founder of TomoTherapy and an early in Phoenix investor, did the same. And he noted that Piefer also was able to become a good businessperson.

“He was willing to get good advice and take the advice,” said Mackie, who is on Shine’s board.

Shine and Phoenix also benefited from an “ecosystem” — UW-Madison, its Morgridge Research Institute, Wisconsin Investor Partners — that exists in Madison.

“One of those pieces not there, you can imagine it not coming together,” Mackie said.

Piefer agreed that was all-important — though he said the company still often stumbled.

“We made plenty of mistakes,” he said.

The Wisconsin Alumni Research Foundation, or WARF, will get a royalty once Shine begins commercial production. And the company’s website acknowledges the university’s role, with a page titled “The Wisconsin Idea In Action.”

“The university is really important to me,” Piefer said. “It’s in my soul.”

This week, Shine filed plans with the Securities and Exchange Commission to raise an additional $41.5 million.

The company has begun preliminary planning to build a plant in Europe, where the biggest producer is expected to stop production in the mid-2020s because of the age of its reactor.

It also plans to sell other isotopes used in medical imaging and therapy produced in its generators. The isotopes include Iodine‑131, widely used to treat thyroid cancer, and Lutetium-177, used for targeted therapy.

Shine — which has openings for positions ranging from staff accountant to an array of engineers — expects to employ 150 to 200 people in Janesville when its plant is completed.

Former House Speaker Paul Ryan, a native of Janesville, joined the company’s board in August.

Shine recently had a career fair for engineers at UW-Madison. One of the students who attended was the son of the woman who cuts Piefer’s hair.

Last week, she told him that her son said, “Wow, for the first time, I want to go back to Janesville and work.”