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Shine Medical raises $11 million in venture funding ‎

Source: Shine Medical Technologies
June 7, 2011
[PRESS RELEASE]
Public-private effort continues to move forward with technology enabling safer, cleaner, more efficient production of isotopes to treat and diagnose cancer and heart disease

MIDDLETON, Wis. – A Wisconsin startup company has secured an initial $11 million in venture capital funding as part of its bid to develop a manufacturing plant that will solve a worldwide shortage of a medical isotope needed by tens of thousands of U.S. patients daily.

SHINE Medical Technologies, working in partnership with the private, nonprofit Morgridge Institute for Research, the University of Wisconsin–Madison and other public and private collaborators, has now achieved a series of key milestones in its efforts to develop a domestic production source for molybdenum-99, an isotope needed for detecting heart disease and staging cancer.

In September, the group led by SHINE and the Morgridge Institute gained a $500,000 cooperative agreement from the U.S. National Nuclear Security Administration’s Global Threat Reduction Initiative to advance novel technology for production of molybdenum-99 without use of highly enriched uranium. Achievement of the latest technical and investment milestones enables the group to proceed with a request to secure the remaining federal matching funds of up to $25 million.

Leading the latest investment round with a commitment of $10 million to SHINE was Knox LLC of Las Vegas, the investment vehicle of Stevens Point native and University of Wisconsin–Madison alumnus Frederick J. Mancheski. Mancheski is a former chairman and CEO of automotive parts supplier Echlin and a graduate of the university’s mechanical engineering department.
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Greg Piefer, SHINE CEO and a UW–Madison alumnus, said the investment by Mancheski and additional commitments from 14 other individual investors builds on initial support from Wisconsin Investment Partners and the Morgridge Institute. The group’s success in demonstrating that its technology is able to function on a commercial scale coupled with the growing need for a reliable, domestic source of molybdenum-99 provided compelling reasons for the investors to participate.

“We are pleased that the financial community recognizes the benefits this new industry will bring to patients and their families and to our nation as a whole,” Piefer said. “Thanks to the commitment of these forward-thinking leaders, our technology will save lives, create jobs and reduce the potential threat and nuclear footprint associated with current production methods for molybdenum-99.”

The byproduct of molybdenum-99—technetium-99m—is extracted by hospital radiopharmacy staff and used in 55,000 diagnostic nuclear imaging procedures each day in the U.S., including diagnoses of cardiac disease and cancer and studies of brain and kidney function. Two nuclear reactors in Canada and the Netherlands supply the majority of the isotope used in this country. These reactors are operating well past their design life and in 2009 and 2010, the Canadian reactor experienced an unscheduled shutdown for 16 months due to leaks caused by corrosion. During the shutdown, a worldwide shortage of molybdenum-99 caused hospitals to delay or cancel millions of medical procedures. Today, the Canadian reactor is again shut down for maintenance.

SHINE’s alternative method to produce the life-saving isotope combines a technology developed by UW–Madison medical physics researcher and current university provost Paul DeLuca with an innovative process developed by Piefer of SHINE. The new method offers major advantages over existing technologies because it does not use highly enriched uranium, does not require a nuclear reactor, uses a “greener” method for production and fits well with the nation’s existing supply chain. SHINE’s new production method is also at least 10 times more energy efficient than other, accelerator-based approaches.

“It’s rewarding to see that technology originally developed for another application is being integrated into SHINE’s process,” said DeLuca, also vice chancellor for academic affairs at UW−Madison. “The result is a win for patients who need life-saving treatments and diagnostic procedures as well as the environment.”

Investor Frederick Mancheski, whose commitment to human health also led him to take a recent equity stake in Madison biosciences company FluGen, said SHINE’s technology solves a number of critical problems.

“I am particularly excited by SHINE’s technology because it addresses a compelling global health care need,” said Mancheski. “By not using highly enriched uranium, SHINE shows it is possible to address medical needs and societal needs for non-proliferation with a good business model that will create jobs and profits.”

Thomas “Rock” Mackie, director of medical devices for the Morgridge Institute for Research and principal scientific investigator on the project, said the scope of the SHINE effort highlights the public benefits that accrue when private sector catalysts are able to leverage the research and policy strengths of public institutions.

“By establishing clear policy goals, the U.S. Department of Energy has enabled private sector leaders such as SHINE and the Morgridge Institute to tackle an immense technical challenge and aid society on many levels,” Mackie said.

In addition to SHINE and the Morgridge Institute, the project’s collaborators include UW–Madison, the U.S. National Nuclear Security Administration’s Global Threat Reduction Initiative, Los Alamos National Laboratory and Argonne National Laboratory, said Sangtae “Sang” Kim, executive director of the Morgridge Institute for Research.

Carl Gulbrandsen, chairman of the board of the Morgridge Institute and managing director of the Wisconsin Alumni Research Foundation, said the effort highlights the role of university technology in contributing to business acceleration. WARF patents university technology and uses proceeds from industry licenses on the patents for investments that fund further research. Intellectual property created during the design phase of the SHINE project will be owned by WARF and licensed to the company.

Piefer said several sites are currently under review as possible locations for the new SHINE plant. The operation is expected to initially create more than 100 permanent jobs with the possibility of even further employment growth. The plant will foster additional employment opportunities in supporting industries. The current timetable anticipates completion of the plant in 2014.

About SHINE Medical Technologies
Founded in 2010 to pursue opportunities presented by its novel technology, SHINE Medical Technologies is based on inventions co-licensed with Phoenix Nuclear Labs. With 10 employees and a laboratory in the Middleton Business Park just west of Madison, SHINE received initial support from Wisconsin Investment Partners, individual angel investors and the Morgridge Institute for Research. For more information, visit: www.shinemed.com.

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