Phoenix Nuclear Labs Looks to Diversify in Defense, Energy

In the race to start domestic production of molybdenum-99, a crucial medical radioisotope used in diagnostic imaging, Shine Medical Technologies is betting big on neutron-generating accelerator technology developed by Phoenix Nuclear Labs.

Yet Phoenix, a 10-year-old company, is about more than isotopes. It’s also working on applications in military imaging and solar-cell production.

Greg Piefer, who founded both companies, is now involved with Phoenix only as a customer and board member. But the two companies operate out of a shared facility in Madison, WI, so it figures that he runs into Phoenix employees at the water cooler.

Piefer, Shine’s CEO, says the company has invested over $50 million in its quest to produce the isotope, which is used in about 20 million procedures in the U.S. annually. Shine hopes to begin making molybdenum-99 by 2018, he says, and start bringing in revenue after that.

Several other firms are jostling with Shine to grab a piece of the molybdenum-99 market, which Piefer says is worth about $600 million per year globally. They include Coral Gables, FL-based Coquí RadioPharmaceuticals, Atlanta-based Perma-Fix Medical, and NorthStar Medical Radioisotopes, which by coincidence is also headquartered in Wisconsin.

One or more of Shine’s competitors getting to market faster—or at a lower price point—might spell its demise, though the company does have supply agreements in place with GE Healthcare and Lantheus Medical Imaging, two distributors of the isotope.

However, even if Shine flounders in the coming years, that would not necessarily spell doom for Phoenix, says Ross Radel, the latter company’s president. He points to other applications for its accelerators in fields like defense and renewable energy.

“If Shine is successful, that’s fantastic for Phoenix,” Radel says. “If Shine’s not successful, Phoenix still has a viable business in these other market sectors. We’ve recognized that it’s important for us to be as diverse as possible.”

Another reason Phoenix’s long-term outlook appears positive is that unlike Shine, it’s been able to fund some of its research and development efforts with payments from customers. Sales at Phoenix were $4.5 million in 2014, a figure that Radel expects to be “a little lower” this year. He also expects the company, which has received more than $16 million in grants and equity investments since Piefer started it in 2005, to become profitable in the next couple years.

About a year ago, Phoenix won a $3 million contract from the U.S. Army to build a neutron radiography device to detect voids in artillery shells and other munitions; a misplaced charge can lead to a weapon detonating the moment it’s fired. Neutron radiographs use a high-performing imaging technology that works similar to X-rays. However, while both technologies can “see” through metal material without interacting with it, Radel says only neutron radiographs can detect non-metal materials buried under heavier metals. Phoenix has so far delivered two demonstration neutron generator systems: one to Shine, and one to an Army facility in New Jersey.

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