At Lansing’s Niowave, smashing atoms and curing cancer is all in a day’s work – Crain’s Detroit Business

It has been a highly eventful 14 months for Lansing-based Niowave Inc., a 2005 spinoff from Michigan State University that makes parts for superconducting particle accelerators and radioactive isotopes for treating cancer.

Last July the company was awarded a grant of $15 million from the federal government to expand its production of molybdenum-90, a radioactive isotope known as Mo-99. The isotope is used in more than 40,000 medical procedures in the U.S. each day, including the diagnosis of heart disease and treating those with cancer.

That grant was contingent on the company getting $15 million in matching funds, which it has done through a combination of equity investing from mid-Michigan investors and revenue sources.

Now, all of the U.S. needs for the isotope are supplied by five global suppliers, in Australia, Canada, Europe and South Africa, and the U.S. wants to eliminate the reliance on foreign sources. Currently Niowave produces only small quantities of the isotope.

Niowave was one of four U.S. companies that got grants to produce commercial amounts of Mo-99 without using highly enriched uranium, which makes production much safer and eliminates the problem of what to do with nuclear waste. Currently, the imported Mo-99 is made using highly enriched uranium.

The other companies were NorthStar Medical Radioisotopes LLC of Beloit, Wis.; Shine Medical Technologies of Janesville, Wis.; and Northwest Medical Isotopes of Corvallis, Ore.

One use of funds from the first grant was for Niowave to increase its research and production team, with the goal to eventually double the head count at the time of 65.

The pandemic delayed a lot of that hiring, but by late August, the company was holding a series of daily in-person interviews with prospective employees, looking to hire chemists; nuclear, mechanical and electrical engineers; CNC machinists, welders and draftsmen and women. It hopes to be at 100 employees by early next year.

Pre- and post-pandemic, Niowave beefed up its management team.

Mike Zamiara was hired as president and CFO last October. A former partner at the accounting firm Plante Moran, he has his own technology consulting firm in Traverse City, Integrated Systems Consultants; from 2005-2010 was president and CEO of Lansing-based Orchid Orthopedic Solutions, a contract manufacturer of orthopedic devices with five plants in the U.S.; and from 2010-2015 was president of Traverse City-based Hawkeye Consulting LLC, whose focus was pharmaceutical and medical-device companies.

In July, Matt Burba was hired as COO. Previously, he had been with Orchid Orthopedic Solutions for 18 years in a variety of roles, the last three as chief commercial officer.

Niowave hopes to get another large round of federal funding to accelerate the commercialization process. The company met a Sept. 30 deadline for applying for a second grant. Terry Grimm, Niowave's co-founder, CEO and senior scientist, said he expects at least two of the other companies to join him in seeking a share of the $35 million that is available. He expects to get word of an award before the end of the year.

"We think we made a very strong case," he said.

"We already have matching funds lined up for that grant," Zamiara said. "Our existing group of investors has been fantastic. Over 85 percent of our stockholders are within on hour of where we are sitting."

Over the years, the company has generated $75 million in grants and $10 million in angel investing. The company has also got $248,500 from Red Cedar Ventures, the investment arm of the MSU Foundation. "They're in an exciting space," said Jeff Wesley, Red Cedar's executive director. "And they have been so capital efficient bringing this technology along."

In 2005, when Niowave was founded, the business model was to be a contractor for the U.S. Dept. of Energy and to build accelerator components and do consulting for various DOE labs and research universities. The plan was to eventually become a manufacturer of radioisotopes such as molybdenum-99.

Grimm had left the Massachusetts Institute of Technology to join MSU in 1994. MSU had become a world leader in nuclear physics in the 1960s when it build the first superconducting cyclotron in the world.

That cyclotron had been replaced by more powerful units over the years, and by 2005, MSU was in negotiations with the Department of Energy over how to fund and build the world's largest, most powerful linear particle accelerator.

"I saw that whether it got built or not, there was a future in this technology. I said, 'I'm going to spin out a company and make isotopes,'" said Grimm. To make isotopes, he had to build his own particle accelerator, and Niowave also began making accelerator components and selling them to labs around the world.

MSU began building that powerful linear particle accelerator in 2014. What became known as the Facility for Rare Isotope Beams is expected to be fully on line next year or, more likely, in 2022. The cost of the nuclear research facility grew to $765 million, with the DOE contributing $635.5 million to the project, the state contributing $94.5 million and MSU $35 million. The facility will hold 227,000 square feet of equipment, much of it already installed, and more than 800 people work there now.

Its particle accelerator will create rare isotopes not normally found on earth, with potential applications for medicine, homeland security and industry.

Meanwhile, from 2005-2015, more than half of Niowave's revenue came from selling accelerator parts to the CERN lab in Switzerland and other European labs, DOE labs and research universities. Over time, larger volumes of isotopes were produced and that line of revenue increased.

Grimm said that accelerator parts account for less than 20 percent of revenue today.

Customers for accelerator parts or isotopes have included MSU, the Stanford Linear Accelerator Center, Cornell University, the Brookhaven National Lab, Fermilab, the University of Nevada-Las Vegas and Lancaster University in the United Kingdom. Medical trials in a variety of stages use their isotopes.

"We get pinged about once a week from some pharmaceutical company that wants our isotopes," said Zamiara. "We ship isotopes all over the world."

Niowave sells 24 isotopes, all of them for various cancer treatments. So far, most of them can only be made in small batches by bombarding uranium with high-speed electrons, but two of them are made in commercial volumes from used nuclear fuel, an isotope of yttrium and an isotope of praseodymium.

Another use of last year's grant is to go from small-batch to large-batch production of its isotopes by increasing the size of the production facility near the Lansing airport, currently a 14,000-square-foot facility opened in 2014. The company plans to break ground on an expansion there next year and hopes to add up to another 100,000 square feet that will be fully operational by 2023.

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At Lansing's Niowave, smashing atoms and curing cancer is all in a day's work - Crain's Detroit Business