SHINE signs agreement with first customer, medical division of General Electric
JANESVILLE—The company that plans to build a medical isotope production plant in Janesville said Thursday it has signed a long-term deal with its first customer, a significant milestone in bringing the Janesville operation to fruition.
SHINE Medical Technologies signed the agreement with GE Healthcare, a division of the General Electric.
It is the first announcement of a major supply agreement with a U.S.-based producer of molybdenum-99, a medical isotope used in more than 30 kinds of diagnostic imaging procedures and more than 40 million medical imaging tests each year.
“This is very significant, and we feel very good about it,” said Greg Piefer, SHINE's founder and chief executive officer. “GE is a major provider, and they do their homework before making decisions.
“We feel really good that they're our first customer. It's a significant industry validation, and that's a really big deal.”
SHINE is working toward regulatory approval for an $85 million plant that will use low-enriched uranium in a series of eight accelerators to produce moly-99.
The company wants to fill a void expected when two other nuclear reactors that use highly enriched uranium to produce isotopes are taken out of service in 2016 and 2020. The plants in Canada and the Netherlands are the world's leading isotope suppliers.
Within its first year of production, SHINE estimates it will generate annual revenues of $200 million.
Piefer has said the Janesville plant would employ 150 people when it opens, most in high-paying technical jobs that he believes can be filled with local talent.
“This is a very encouraging development, a commitment from a company whose name is recognized by everyone,” said John Beckord, president of Forward Janesville. “SHINE is really meeting their guidelines, and this news is one more indication that this project is one step closer to reality.”
Under the terms of the agreement, SHINE will provide moly-99 to GE Healthcare on a regular basis once its facility becomes operational, most likely in 2017, Piefer said.
In 2010, SHINE was selected as one of four commercial entities that the federal government partnered with to accelerate the establishment of a reliable U.S. domestic supply of moly-99 made without the use of highly enriched uranium.
“GE Healthcare is very pleased to have entered into a long-term supply agreement with SHINE,” said Jan Makela, general manager of GE Healthcare Life Sciences Core Imaging. “The technology represents a significant, safe and viable option for the production of molybdenum‐99 in the future.
“We believe SHINE will help secure the supply for global medical communities and their patients.”
SHINE originally planned to start production in late 2016, but delays at the federal level likely will push that into 2017. It plans to start hiring nuclear, chemical and mechanical engineers later this year and round out its staff in 2016.
Piefer said Canada's decision to discontinue moly-99 production in 2016 would create a void in the western hemisphere for medical isotopes.
“Because medical isotopes decay so quickly, it's essential that the United States establish its own domestic production to meet the needs of our 20 million patients each year,” he said. “In addition, SHINE will contribute to the strength of the global supply chain."
Piefer said SHINE would be able to produce isotopes much more efficiently because of new technology.
He said GE, which is expected to be one of a handful of SHINE customers, has a proven track record in medical imaging.
“By entering into this supply agreement with SHINE, GE Healthcare is effectively affirming that SHINE presents the best new option for western production and a strong option for supply around the globe,” he said.
The federal government has committed $25 million to the project, and the city of Janesville has offered a $9 million development agreement—including private loan guarantees—that is contingent on the company meeting several benchmarks, including federal licensing and the creation of at least 125 high-paying jobs.
Late last year, the city agreed to buy two additional parcels, which total about eight acres, to satisfy a federal buffering requirement for the plant on Highway 51 across from the Southern Wisconsin Regional Airport. The city's acquisition costs were about $150,000, which SHINE will repay when it takes occupancy of the plant.
By the time the plant opens, SHINE officials have estimated that construction, equipment and regulatory costs will hit $180 million.