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Chemists jump on pharma niche

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Garry Morefi eld (left) and Kyle Flanigan of US Specialty Formulations of Bethlehem hope to ship their fi rst
revenue products in November.
Garry Morefi eld (left) and Kyle Flanigan of US Specialty Formulations of Bethlehem hope to ship their fi rst revenue products in November. - (Photo / )

Advanced materials developer Kyle Flanigan always dreamed of a job as a commander on a space station.

The closest he came to fulfilling this aspiration was an assignment to work on a space program at Intel Corp. in Portland, Ore., to make computer chips for space shuttles.

But the project folded and Flanigan’s path took a new course.

Years later, that path would cross with fellow chemist Garry Morefield and blossom into a business partnership and a yearlong development process to start US Specialty Formulations, a clean and sterile small-batch pharmaceutical manufacturing company in Bethlehem. US Specialty Formulations now is one of the few in the nation positioned to fill a newly created gap in what the men refer to as “a gray area of the pharmaceutical industry, called compounding.”

“Our business model approaches it from an advanced materials and clean manufacturing angle, rather than a pharmacist’s angle,” Flanigan said.

It’s a model that could be in the right place at the right time.

Last November, President Barack Obama signed the Drug Quality and Security Act in response to pharmacies that were producing larger quantities of drugs than regulations allow, making for an unsafe and unsterile production environment.

Enter US Specialty Formulations, operating under strict manufacturing regulations and practices mandated by the U.S. Food and Drug Administration.

“There is a shortage of sterile product manufacturers like us in the U.S.,” Morefield said.

Compounding, which used to be handled by a pharmacist, occurs when a physician needs a certain drug to be custom created to become a different strength, dosage, flavor or have certain ingredients excluded because of a patient’s allergies or sensitivities. Under the new law, physicians are required to contract outsourced manufacturers such as USSF.

“The window for being successful in this market is less than 10 years,” 44-year-old Flanigan said. “And I think we are in the top tier of competition.”

Four years ago, Morefield started VaxForm in Rockville, Md., a small conventional biological laboratory for making pharmaceuticals, and three years later after moving to the Lehigh Valley, he met and joined forces with Flanigan to create USSF. Morefield still owns and operates VaxForm.

The men share space for their companies in the Ben Franklin TechVentures startup hub at Lehigh University’s Mountaintop campus in Bethlehem.

A short-term goal for USSF, Flanigan said, is to ship its first revenue products in November. In June, it became one of nine early stage startup companies to receive a portion of a $620,000 investment from Ben Franklin Technology Partners of Northeastern Pennsylvania, helping to add staff to ramp up production.

“The resources of TechVentures leverages our funding to bring up technology development as much as possible,” said Laura Eppler, director of marketing for Ben Franklin Technology Partners.

Flanigan spent most of his childhood in science laboratories with his chemist parents, so landing in the material science field was no surprise to him.

“I knew I wanted to run, manage and own my own advanced materials company,” Flanigan said. “A think tank to do research projects.”

A graduate of Howard University with a degree in chemistry and University of Washington with a master’s in material science engineering, Flanigan won a National Science Foundation grant to continue his education at Washington, where he obtained his doctorate in advanced materials development.

In his role at USSF, Flanigan studies the structure of the molecules and atoms that determine the property of a pharmaceutical. In turn, he creates a disciplined process that follows FDA regulations, checklists and procedures to best manufacture the drug.

USSF has the ability to manufacture sterile drugs of flexible batch sizes into sterile vials and bottles, pre-filled syringes and intravenous bags, and can do so for drugs in short supply or that are no longer manufactured.

“We are a small-batch manufacturer,” Flanigan said. “And we remain flexible in our manufacturing and design flows.”

Meanwhile, 37-year-old Morefield, a graduate of University of Florida and Purdue, with degrees in chemistry and industrial and physical pharmacy, respectively, worked for three years at the U.S. Army Medical Research Institute of Infectious Diseases in Maryland, where he focused on bio-defense vaccines. He then was head of formulations stability for Sanofi Pasteur in Swiftwater, Monroe County.

Under Morefield’s leadership, VaxForm is in the testing stages of launching a U.S. patented vaccine targeted at Group A streptococcus, the bacteria that causes strep throat, which Morefield recently presented his research for at a conference in Boston.

“Five-hundred thousand people die a year from strep,” Morefield said. “This is not just an accomplishment; we are doing something that gives back to the community at large.”

VaxForm in January 2012 received an $850,000 Small Business Technology Transfer grant from the Department of Defense to help fund the project.

In addition to his work in the lab of VaxForm, Morefield keeps busy serving as the chief operating officer of USSF.

“I feel very accomplished,” Morefield said. “We are working on projects that impact globally on the health of individuals.”

VaxForm also is working on a project to create an oral delivery platform for vaccines. Morefield said a vaccine cannot be administered orally unless the virus is live, since the stomach would digest it otherwise. His company is trying to figure out a way to create an oral vaccine that is not live, with the ability to still make its way to a person’s intestines.

And as for USSF, next year, Flanigan said, he plans to expand by adding space in a satellite facility.

“They [Flanigan and Morefield] are improving human condition with their work,” Eppler said.

Jennifer Glose

Jennifer Glose

Reporter Jennifer Glose covers health care, Berks County and other topics. She can be reached at jenniferg@lvb.com or 610-807-9619, ext. 111. Follow her on Twitter @jenniferg_LVB and read her blog, “Networking,” at http://www.lvb.com/section/networking-blog.

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