New Richmond-based pharma startup with $350M in funding eyes facility in Petersburg

The AMPAC plant, seen in the distance, began operations again last summer after years of dormancy. (Photos by Mike Platania)

After winning nine figures in new federal funding, a local pharmaceutical startup is looking to Petersburg as its first step toward securing the nation’s generic drug supply.

Frank Gupton, a department chair at VCU’s College of Engineering, and Eric Edwards, co-founder of local pharma company Kaleo, founded Phlow Corp. earlier this year. On Tuesday, Phlow was awarded a four-year, $354 million contract from the Biomedical Advanced Research and Development Authority, a division of the U.S. Department of Health and Human Services. The contract has an option to extend to a total value of 10 years and $812 million.

Frank Gupton (Courtesy VCU)

Eric Edwards

Earlier this month BizSense first reported Phlow’s initial government contract for $6 million, but details on the company’s plans remained unclear at the time.

Gupton said in an interview Tuesday the company’s plans have been in the works for about 18 months, well before COVID-19 hit. Phlow’s main objective is to build up a national stockpile of drug ingredients that can be used to make essential, generic drugs domestically, rather than abroad – an issue the coronavirus has brought more to the forefront.

“That’ll fix an acute problem, but the chronic problem is our lack of competitiveness with foreign manufacturing operations,” Gupton said. “This issue with the national supply chain is something all of us were aware of but up until recently, very few people were really thinking about it from a long-term, strategic perspective.”

Phlow will produce the drugs being used to treat patients with COVID-19, as well as vaccines, antibiotics, pain relievers, and ingredients for generic, over-the-counter medicines.

The company is based out of the former Health Diagnostic Laboratory building in downtown Richmond, but part of the national stockpile it’s looking to manufacture will be kept in Petersburg.

Phlow is planning a new facility near the AMPAC pharmaceutical company in Petersburg.

Gupton said they’re looking to build a warehouse on wooded land adjacent to the AMPAC Fine Chemicals facility at 2820 N. Normandy Drive in Petersburg. AMPAC is a partner in the venture, as is VCU and drug manufacturing nonprofit Civica Rx.

Some of Phlow’s chemicals will be made at the AMPAC plant, which AMPAC restarted last year after it was left vacant for years following German pharma firm Boehringer Ingelheim’s exit.

“We’re actually going to be looking at strategic sites around the country that would be good locations to be able to develop and manufacture, starting in Petersburg,” Gupton said. “Right now we’re focusing our efforts on Petersburg, and it’s a big site. So we want to make sure that we take the best advantage we can of the Petersburg site.”

Phlow is looking to move quickly. Gupton said they’re aiming to build a smaller-scale facility totaling roughly 10,000 square feet in Petersburg and start it up within a year.

Gupton said they plan to hire about 350 people, many of whom would be trained at VCU labs.

“These are a lot of highly skilled people, so it’s really going to add to the tax base for the region, in our labs as well as down at Petersburg,” Gupton said.

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