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News | 4 min read

Central Virginia’s launch of ‘cluster accelerator’ to fast-track development of advanced pharmaceutical manufacturing

October 4, 2021

Richmond, VA – Activation Capital, a leading entrepreneurship and ecosystem development organization, announced the launch of a cluster accelerator to catalyze the growth of advanced pharmaceutical manufacturing and R&D in Central Virginia. A coalition of private-public entities from Greater Petersburg and Greater Richmond helped form the accelerator, secured $2.5M in seed funding from GO Virginia and others, and appointed Activation Capital as the organizing entity – a first-of-its-kind initiative for the Commonwealth of Virginia.

The regional cluster accelerator’s goal is to help build a globally competitive pharmaceutical manufacturing and R&D industry in the Central Virginia region. The work will fast-track regional efforts to reshore and secure the production of essential medicines in the United States, lower their costs and ensure access to quality medicines in the U.S. and around the world. Many organizations will support scale-up in infrastructure, workforce development, and supply chain development.

“Today, nearly all of the active ingredients and/or their starting materials for Americans’ essential medications come from overseas, leaving us vulnerable to shortages. VCU Engineering’s Medicines for All Institute is an internationally recognized leader in improving the manufacturing of generic drugs by curbing waste, cutting costs, and reducing pollution,” said Dr. Frank Gupton, CEO of the Medicines for All Institute and co-founder of Phlow Corporation.

“For far too long, the United States has been dangerously dependent on a poorly designed global supply chain for our nation’s most essential medicines. As a solution, the regional cluster accelerator will help further enhance domestic manufacturing as the private sector collaborates to create a resilient pharmaceutical supply chain in the U.S. that will provide access to essential medicines for all Americans,” said Eric Edwards, M.D., Ph.D., President, co-founder, and CEO of Phlow.

With as much as 73% of the raw materials used to produce active pharmaceutical ingredients manufactured outside of the United States, this initiative targets an issue of importance to national security and economic prosperity. The accelerator builds upon 18 months’ work and initial investments in the region to make Virginia a leader in the nation’s efforts to boost state-side production of essential medicines. “This innovative approach to accelerate the growth of the cluster has the potential to yield thousands of high-paying jobs, attract substantial levels of capital investment, and strengthen the Commonwealth’s position as a leader in the life sciences sector,” said Stephen Moret, Virginia Economic Development Partnership President and CEO. “

The accelerator’s work will cover the 17 cities and counties that comprise the Greater Petersburg and Greater Richmond areas. Petersburg Mayor Sam Parham said, “With the first facilities under construction in Petersburg, we are excited to help position the city and the region as the nation’s hub for the cluster’s advanced manufacturing facilities that will bring high-paying jobs and workforce training designed to ensure success for future generations.”

On the potential impact of the initiative, Richmond Mayor Levar Stoney said, “As an emerging market for biotech and life sciences, the City of Richmond is ready to help build this high-growth cluster in advanced pharmaceutical manufacturing and R&D in Central Virginia and advance our local economies, establishing our region leader in this emerging and important field.”

The founding leadership board also named Robby Demeria, chief of staff for Phlow and former deputy secretary of commerce and trade, as founding chair. Jeff Gallagher, a 25-year life sciences sector veteran, was named interim executive director to begin work immediately on its ambitious plan. “I applaud the many people and organizations in this region who worked diligently for nearly a year during the COVID lockdown to create a comprehensive strategic plan that will bring enormous positive change to the region and world,” said Gallagher.

The founding board represents organizations that will play a wide range of critical roles in scaling the ecosystem. Activation Capital will serve as the initiative’s organizer – housing the accelerator in its Bio+Tech Park and bringing ecosystem development best practices to the effort. “The cluster accelerator model is a relatively new approach to launching and scaling industry clusters,” says Chandra Briggman, CEO of Activation Capital. “The need for urgency in producing America’s essential medicines within the U.S. makes this agile, startup-esque approach to building out the biopharma ecosystem ideal.”

This project was funded in part by GO VIRGINIA, a state-funded initiative administered by the Virginia Department of Housing and Community Development (DHCD) that strengthens and diversifies Virginia’s economy and fosters the creation of higher-wage jobs in strategic industries.