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Janesville working with medical isotope maker on incentive agreement

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JAMES P. LEUTE
January 25, 2012
— Community leaders were thrilled Tuesday that SHINE Medical Technologies selected Janesville over two other communities for a facility that will produce medical isotopes and create more than 100 high-paying jobs by 2015.

But they remain cautious, tempering their excitement with the reality that several steps remain before medical isotopes leave Rock County for health centers around the world.


City officials have been working with SHINE for months to site the plant in Janesville. The Middleton-based company also considered locations in Stevens Point and Chippewa Falls.


After months of closed-session strategy sessions, the city council directed staff to forward a revised developer's agreement to SHINE. It was sent late last week.


For the most part, the agreement is acceptable, said Greg Piefer, SHINE's founder and chief executive officer.


"We feel that we're close enough that we can work it out," Piefer said. "The fundamentals are all there. We just need to do what we would call 'wordsmithing.'"


The city council is expected to vote on the agreement Monday, Feb. 13. Details, including specific employment benchmarks and incentives the city is offering, will be released before the council meeting.


Janesville Economic Development Director Vic Grassman said the city worked hard to make itself attractive to SHINE while protecting the city's interests. The economic and financial incentives—which he would not release Tuesday—are tied to specific benchmarks SHINE must meet throughout its regulatory, construction and production processes.


The new plant would make SHINE the first large-scale domestic supplier of molybdenum-99, a medical isotope used in more than 30 varieties of diagnostic imaging procedures. Each day in the United States alone, medical professionals perform more than 50,000 diagnostic nuclear medicine procedures that rely on moly-99.


SHINE plans to use a proprietary manufacturing process and technology that Piefer said offers significant advantages over existing production technologies. It will not use highly enriched uranium and will not require a nuclear reactor. Its process, he said, will generate hundreds of times less waste than any current moly-99 production process.


Piefer said the Janesville plant would produce enough of the moly-99 isotope for approximately 10 million diagnostic and treatment procedures each year, representing approximately one-half of the U.S. need for moly-99.


"SHINE is an exciting project, an exciting company for the community," City Manager Eric Levitt said. "But it is not a done deal and won't be until the city council votes on it in February."


In December, the council agreed to spend just more than $1.5 million to buy an 84-acre parcel on Highway 51 south of the city as the potential home for SHINE. The city plans to annex the parcel and fold it into the existing Tax Increment Financing District 35 just to the northeast.


Piefer said the plant must satisfy a litany of federal regulations before it begins production. The company has been doing environmental assessments at the site since October.


If all goes well on the federal level, Piefer said construction could start in the next 18 to 24 months, with production starting in 2015. Salaries, he said, will be about $50,000 to $60,000 per year for production workers.


"We plan to pay our people well," he said. "It will be a highly efficient operation, and our people need to be highly disciplined."


He said the company is excited to join the community as an employer and corporate citizen. He will meet next week with officials at Blackhawk Technical College to discuss programming for potential employees.


"Janesville worked very hard with us," he said. "The thing that was most important to us was to feel welcome in the community, and we got that from all three communities, but it was loud and clear in Janesville and left no room for doubt."


Also tipping the scale in Janesville's favor is the Southern Wisconsin Regional Airport just across Highway 51.


"When you produce a product that decays 1 percent every hour, that proximity is important," Piefer said, noting that Janesville also is closer to SHINE's major customers in St. Louis and Boston.


In Rock County, SHINE could join another medical isotope maker, NorthStar Medical Radioisotopes, which plans to build a $194 million plant in Beloit and create more than 150 jobs by 2016.


SHINE and NorthStar are two of just four U.S. companies supported by the National Nuclear Security Administration as it pushes for a more reliable and diverse supply of Moly-99.


"This in combination with the Northstar project in Beloit would really put a whole different halo on our Rock County brand," said John Beckord, president of Forward Janesville.


Beckord said SHINE and Northstar represent a new model of manufacturing for the county. The potential for spin-off projects and ancillary businesses is significant, he said.


"We've been talking about diversification for years, even when the auto industry was strong," he said. "Having SHINE in Janesville—assuming it all falls into place—really moves us down that path of diversification.


"And this is not the type of operation you can just pick up and move, so there are no outsourcing issues."


Founded in 2010, SHINE Medical Technologies is based on inventions co-licensed with Phoenix Nuclear Labs, which operates a lab in Middleton.


Earlier this year, SHINE secured $11 million in venture equity funding for further development of its technology.


Mary Willmer-Sheedy, co-chairwoman of the public-private Rock County 5.0 economic development initiative, said Tuesday's news was good.


"We're thrilled that SHINE is committed to Rock County," she said. "SHINE will join a host of other medical businesses in the community that make up a strong medical sector.


"They recognize the attributes of Rock County and the talented workforce we have here."


WHAT IS MOLY-99?

Molybdenum-99 is a medical isotope used in more than 30 varieties diagnostic imaging procedures. Each day in the United States alone, more than 50,000 diagnostic nuclear medicine procedures take place that rely on moly-99.


It is primarily used for detecting heart disease and determining stages of cancer progression, according to SHINE officials.


"The medically important isotope, moly-99, is crucial to the successful diagnosis of cancer and heart disease throughout the world," said Dr. Richard Steeves, professor emeritus of human oncology at UW-Madison. "With moly-99, physicians can determine the extent to which heart disease or cancer has spread, information which is critical to successful treatment."


Historically, most moly-99 used in the United States has been produced in Canada and the Netherlands using highly enriched uranium placed in high power research reactors, SHINE said in a news release.


Both the Canadian and Netherlands reactors are operating beyond their originally licensed life and unscheduled shutdowns of the reactors in 2009 and 2010 caused worldwide shortages of moly-99 leading to the delay or cancellation of millions of medical procedures.


If you go


SHINE Medical Technologies will hold a community open house from 5-7 p.m., Tuesday, Feb. 7, at Rotary Gardens in Janesville. Company officials will be on hand to explain details about the company, its product and the plant it plans to build on the city's south side.



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