Shine, NorthStar Spar as Medical Radioisotope Race Continues

The quest to become the first domestic producer in decades of a crucial medical radioisotope is heating up, as the industry tries to avert a looming potential shortage when a key supplier in Canada begins winding down production next year.

The interesting, and apparently coincidental, twist is that two of the companies leading that competition, NorthStar Medical Radioisotopes and Shine Medical Technologies, are based in the same city—Madison, WI.

“We’ve been racing each other for a while,” says Shine founder and CEO Greg Piefer. “Looking at when other companies have submitted license materials to the [Nuclear Regulatory Commission], the nearest competitor is two or three years behind.” (Others jockeying for position in this market include Coral Gables, FL-based Coquí RadioPharmaceuticals, Atlanta-based Perma-Fix Medical, and more.)

As we’ll see later, the Madison neighbors can get chippy when defending their competing methods for producing molybdenum-99, the material that decays into technetium-99m, the most widely used radioisotope in medical diagnostic imaging.

It’s been more than 20 years since molybdenum-99 was last manufactured domestically, despite the U.S. accounting for about half of global demand for medical isotopes. According to a World Nuclear News report, molybdenum-99 is used in about 20 million procedures in the U.S. annually. It allows clinicians to assess blood flow and determine whether a cancer has spread through a patient’s bones, among other uses.

Molybdenum-99 represents a big business opportunity—the global market for the isotope is about $600 million per year, Piefer says. The Canadian government has said the Chalk River nuclear reactor in Ontario, which Piefer says supplies about one-third of the world’s molybdenum-99, will cease regular production in late 2016 and go offline in 2018. That’s the same year Shine plans to begin producing the isotope at a facility in Janesville, WI, on which construction has not yet started.

NorthStar chief science officer James Harvey says his company will start making the isotope in mid-2016. “NorthStar will be first to market by more than a year,” he says.

Production will initially take place at the University of Missouri Research Reactor Center in Columbia, MO, though NorthStar plans to eventually produce molybdenum-99 at a new facility under construction in Beloit, WI, near Janesville. (For the record, Harvey calls NorthStar’s geographic proximity to Shine “pure coincidence.”)

Harvey says the Beloit facility currently comprises about 50,000 square feet, and the company plans to add another 35,000 in the next year. NorthStar is readying that facility and its space within the Missouri reactor for inspection by FDA officials, he says, a requirement to begin production.

But it’s possible that the demand for the radioisotope in healthcare is so great, and the supply chain so fragile at the moment, that reaching commercial-scale production first might not make a difference in the long run. Both companies have a shot at carving out a piece of the market if they can effectively execute their plans for building up their manufacturing capabilities.

Piefer says that even if Shine isn’t the first to start producing the isotope in the U.S. this century, the company’s price point will be attractive to the product’s distributors, two of whom have already signed supply agreements with Shine. Those contracts with GE Healthcare and Lantheus Medical Imaging are one reason Piefer feels confident Shine will see a return on the nearly $50 million pre-revenue investment it has made to date.

“This is not a first-to-market scenario,” Piefer says. “I believe very thoroughly that Shine’s technology provides a cost advantage, and once we get the plant built, our low-cost dynamic will allow us to succeed, essentially no matter what.”

Meanwhile, Harvey says NorthStar’s approach will also have cost advantages that could help it attract customers. The company has signed prospective supply agreements with GE Healthcare and Triad Isotopes.

Reactor vs. accelerator

Outside of Canada’s Chalk River reactor, virtually all molybdenum-99 is made in the Eastern Hemisphere, in countries like Australia, South Africa, Belgium, and the Netherlands. Most major reactors are at least 50 years old, according to research by Shine. Importing molybdenum-99 from across an ocean is expensive because the isotope’s 66-hour half-life means about 1 percent of finished product is lost every hour.

NorthStar plans to start making the isotope next year using the same method favored by U.S. scientists three decades ago, which is known as neutron capture. With this approach, the core of a nuclear reactor fires neutrons into a molybdenum-98 target to produce molybdenum-99. Harvey says neutron capture gave way to the current standard, a fission process that uses highly enriched uranium, because fission was “extremely efficient and cheap.”

Since then, concerns have grown regarding the risks of highly enriched uranium falling into the wrong hands. In an effort to prevent unauthorized development of a nuclear weapon, the U.S. will no longer export highly enriched uranium, Nature reported in 2013. Starting in 2020, reactors will only be able to use low-enriched uranium.

NorthStar and Shine seem to agree that one drawback of the move from highly enriched to low-enriched uranium is that more nuclear waste will be created. Where they disagree is on the question of how much waste new production methods create. Both were quick to point the finger at the competition.

“The cost of waste disposal is significant and naturally goes up when the market is converted from using highly enriched uranium to low-enriched targets,” Harvey says. “NorthStar is going to have a tremendous strategic advantage in cost profile related to waste. Our waste stream is extremely benign and low in cost compared to any producer who uses the fission route.”

Piefer says he disagrees, at least when considering the amount of waste produced on a “full cycle” basis. That means not only counting waste byproducts from targets, but also those from the reactor itself. And since Shine creates neutrons using particle accelerators, rather than going the reactor route, the company’s overall waste stream will be smaller than that of NorthStar, he claims.

“In the case of [Chalk River in] Canada, the reactor itself is producing approximately 300 times more waste than the targets,” he says. “Eliminating that big, nasty reactor cuts the environmental footprint massively.”

Shine’s approach to making molybdenum-99 starts with the accelerator, where deuterium ions and tritium gas are injected into a plasma chamber with a magnetic field, producing helium and neutrons. Then, there’s a fission process: The neutrons are fired into low-enriched uranium salts—rather than the uranium plates typically used in reactor-based isotope production—and the end result is useful isotopes.

NorthStar is also developing an accelerator-based manufacturing process for molybdenum-99, Harvey says, but those efforts are “a couple years behind” the company’s work using the neutron capture approach.

The accelerator technology Shine uses was developed by Phoenix Nuclear Labs, which Piefer started in 2005 before spinning out Shine five years later. Phoenix and Shine share a facility south of downtown Madison, though Phoenix president Ross Radel says his company probably won’t follow Shine when it moves to Janesville.

Piefer says Shine expects to get the construction permit it needs from the Nuclear Regulatory Commission by next March, and to break ground sometime in 2017.

Shine’s investors have been cautious so far. A year ago, the company raised a funding round worth up to $125 million, but that was a combination of equity and debt, with the debt financing being provided in phases based upon Shine hitting certain undisclosed milestones. Piefer says Shine has technically raised about $45 million to date.

He expects investors will feel more comfortable backing Shine once it has the construction permit in hand. “They’re wanting to see that regulatory risk retired before they dump a lot of money into the company,” he says.

Meanwhile, Harvey says NorthStar has raised over $60 million, and the company “is fully funded through the start of production.”

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