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Phlow Corp receives $354M federal contract to make ingredients for COVID-19 drugs

Tuesday, May 19, 2020  
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A new Richmond-based pharmaceutical manufacturing company has received a $354 million federal contract to make the active ingredients for more than a dozen medicines used to treat patients with COVID-19.

Phlow Corp., led by a doctor trained at Virginia Commonwealth University and working with the Medicines for All Institute at the VCU College of Engineering, will develop a domestic supply of pharmaceutical ingredients for medicines through advanced manufacturing processes that it says also will lower drug costs.

Phlow is based in the Virginia Bio+Tech Park in downtown Richmond. It was co-founded by CEO Eric Edwards, who also was a co-founder of Kaléo, another Richmond-based pharmaceutical development company. VCU professor Frank Gupton is Phlow’s co-founder.

"Phlow Corp.'s mission is to provide high-quality, low-cost, essential pharmaceuticals and their key ingredients through state-of-the-art, U.S.-based advanced manufacturing," Edwards said in an interview.

The company's partners also include AMPAC Fine Chemicals, a California-based manufacturer that has a plant in Petersburg, and Civica Rx, a nonprofit that works to provide a stable supply of generic medications.

Working together, the organizations will produce the nation's first strategic active pharmaceutical ingredient reserve, or SAPIR.

AMPAC will make the pharmaceutical ingredients at its Petersburg plant, which could create about 350 jobs, Edwards said. That plant reopened in 2019. It previously had been owned by Boehringer Ingelheim Chemicals Inc., which closed it in 2014.

The coronavirus pandemic has focused attention on risks to the nation's pharmaceuticals supply, Edwards said. About 80 percent of active ingredients are produced overseas.

"What has happened is the threat of pandemics like COVID-19 have exposed the heavy reliance on foreign manufacturing," Edwards said. In March, for instance, India - a key global supplier of generic pharmaceuticals - announced it was restricting the export of 26 active pharmaceutical ingredients.

The four-year contract has a value up to $812 million, including $458 million in potential options. It was awarded by the Biomedical Advanced Research and Development Authority under the assistant secretary for preparedness and response at the U.S. Department of Health and Human Services.

"BARDA has long focused on expanding pharmaceutical manufacturing infrastructure in the United Sates, not only to develop and produce vaccines, but also for essential medicines, and their key ingredients to make these drugs," said Dr. Gary Disbrow, acting director of the authority.

VCU received a $500,000 grant two years ago from GO Virginia, a state economic development initiative, to commercialize research of technology to quickly manufacture affordable supplies of generic drugs.

Under the contract with Phlow, the Medicines for All Institute at the VCU College of Engineering will develop advanced manufacturing processes to produce the active pharmaceutical ingredients for drugs to treat COVID-19 patients.

"We believe this work can revolutionize America's generic drug manufacturing model by enabling Phlow to produce affordable ingredients used to manufacture essential medicines in the U.S.," said Gupton, who is CEO of the Medicines for All Institute and chairman of the VCU Department of Chemical and Life Science Engineering.

Edwards, the company’s CEO, received his medical degree, a doctoral degree in pharmaceutical science and an undergraduate degree in biology at VCU.

He and his brother, Evan, who grew up in the Richmond area, founded Kaléo, which they initially called Intelliject, in 2004. Kaléo's products include an automatically inject medication to treat anaphylaxis, or severe, life-threatening allergic reactions (the product is called Auvi-Q), and opioid overdose (Evzio).

The chief of staff at Phlow is Robby Demeria, who recently joined the company after service as deputy secretary of commerce and trade for technology and innovation under Gov. Ralph Northam. He was instrumental in legislation adopted by the General Assembly this year to create the Virginia Innovation Partnership Authority. He formerly was executive director of RVATech, the Richmond Technology Council.

The chief financial officer at Phlow is Robert "Bob" Mooney, a co-founder and co-partner at Richmond-based venture capital firm NRV who formerly served as CFO and senior vice president at Ethyl Corp.

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