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Shine Raises $30M, Could Add $150M More After Inking Deerfield Deal

Xconomy Wisconsin — 

[Updated 11/28/18 10:52 a.m. See below.] Shine Medical Technologies, a Janesville, WI-based company that’s working to resume domestic production of a vital medical isotope, said Tuesday that Deerfield Management, a New York-based investing firm, has agreed to pour up to $150 million into Shine’s coffers in the coming years.

Shine executives had previously told company shareholders it was on the verge of striking an agreement with Deerfield for up to $160 million in secured debt financing, as Xconomy reported earlier this week. A press release Shine put out Tuesday about the finalized deal did not say whether the money from Deerfield would be debt or equity funding, and a Shine spokesperson didn’t immediately return messages seeking comment. Deerfield’s investment will be doled out in stages, based upon Shine hitting certain milestones, according to the release. [Updated to indicate that Deerfield’s investment in Shine will be made in stages.]

Separate from its deal with Deerfield, Shine also said Tuesday that it had closed a $30 million-plus Series B funding round. The company did not name any of the participating funds or investors, but said some of them are based in Wisconsin. It’s not clear whether the round is exclusively equity or debt funding, or a combination.

Since launching in 2010, Shine has been developing particle accelerator technology to manufacture molybdenum-99. That isotope is used to produce technetium-99m, the most widely used radioisotope in medical diagnostic imaging.

Until recently, more than 25 years had passed without molybdenum-99 being manufactured in the U.S. That’s despite the fact that the U.S. accounts for about half of global consumption of the isotope, which can be used to detect cancer or to diagnose coronary artery disease, for example. The U.S. market for molybdenum-99 and technetium-99m is estimated to be worth between $350 million and $400 million annually.

A nuclear reactor in Ontario, Canada that for decades was used to produce molybdenum-99 was shuttered in March. Several Eastern Hemisphere nations, such as Australia, South Africa, and the Netherlands, also make molybdenum-99; however, importing the isotope is costly because about 1 percent of finished product is lost each hour due to its 66-hour half-life.

Shine said Tuesday it plans to use some of the money from Deerfield to build a 57,000-square-foot manufacturing plant near its headquarters in southeastern Wisconsin. Two years ago, the Nuclear Regulatory Commission gave Shine the green light to build the facility. Shine plans to start construction in early 2019, and begin commercial production of molybdenum-99 there in 2021. Before that can happen, Shine first needs to obtain an operating license from the commission, as Katrina Pitas, Shine’s vice president of business development, explained in 2016.

In February, Shine said it had finished building a prototype production facility that it plans to use to test its technology. According to messages and documents Shine executives sent to shareholders earlier this year, Deerfield indicated Shine would only receive the full nine-figure investment once the company constructs a “building shell” for the larger plant, proves that its process for producing molybdenum-99 works, and meets other pre-determined milestones.