Richmond pharma company Phlow secures $37M capital raise

Phlow Corp. announced this week that it has raised $37 million to fuel its operations. (BizSense file)

With its pharmaceuticals manufacturing plants in Petersburg up and running, a local company is injecting its budding operations with tens of millions of fresh capital.

Richmond-based Phlow Corp., which seeks to establish a domestic supply of medicines and pharmaceutical ingredients, announced Tuesday that it had secured $37 million in a capital raise led by private equity firm Align Private Capital, which is a first-time investor in Phlow.

Phlow CEO Eric Edwards said the new round of capital investment will help it scale after being focused on establishing its manufacturing facilities for the past several years.

“We’re no longer just constructing facilities now. We’re a fully operational company of over 100 employees working every single day to create the future of how medicines are made. And to do that, to create that future, we have to double down on certain things,” Edwards said. “And that includes building out our processes and capabilities and leveraging innovation for the future.”

Eric Edwards

Edwards said the funding would be used across the board at Phlow, including investments in equipment and technology as well as hiring more employees. Edwards didn’t provide a specific hiring goal but said Phlow has “over a dozen” open positions.

The funding also provides more than a year of runway for the company as it improves on its operations toward the path to future profitability.

“We’re fortunate with this raise to be able to have that significant runway for us to make the right strategic and intentional decisions,” Edwards said.

The company said in a news release that it has raised more than $93 million from private investors and has secured more than $600 million in government contracts to date. Both existing and new investors supported this latest raise.

Edwards said his five-year-old company was able to attract investor interest because of its mission to produce more medicine ingredients in the U.S., which lines up well with the Trump administration’s goals of rebuilding domestic manufacturing industries.

“We sit right in the center of that narrative. And so it made it a very attractive investment,” Edwards said.

He said that success came despite larger trends of venture capital firms struggling to fundraise in recent months, and artificial intelligence firms attracting most of investors’ dollars.

“This is a very, very tough fundraising environment,” Edwards said. “The venture capital market in particular has been challenged at least the first half of the year … the companies that were raising were (doing) very, very large raises, or in the artificial intelligence space or other software, tech-based companies.”

Phlow’s two pharmaceutical manufacturing plants are at 2818 N. Normandy Drive in Petersburg, the first of which began operating in late 2023. The plants produce active pharmaceutical ingredients, known as API, which are the ingredients that provide medications’ health benefits. Phlow sells API to other companies that use the materials to produce generic medicines.

Phlow was founded in 2020 by Edwards and Frank Gupton, and is headquartered at 424 Hull St. in Manchester. It also has a research laboratory at 506 E. Jackson St. in the Bio+Tech Park downtown. Phlow and Maryland-based nonprofit U.S. Pharmacopeia opened that joint lab several years ago.  Phlow bought Pharmacopeia’s local operations earlier this year, and now is the sole user of the center located in the Bio+Tech Park, Edwards said.

Edwards declined to comment on what percentage of the company is now owned by outside investors, but said that “our employees and founders constitute a large proportion of our shareholder base.”

Phlow’s capital raise announcement came a day after Gov. Glenn Youngkin and British pharmaceutical firm AstraZeneca publicly revealed the company’s plans to build a manufacturing facility in Virginia.

AstraZeneca said it’s part of a plan to invest $50 billion in the United States by 2030. The company said the facility in Virginia would be its largest investment to date in a single facility.

However, a news release issued by the governor’s office on Monday didn’t include a specific location for the facility, or details of the project’s size and scope. The release said the Virginia-based project would create “hundreds” of jobs.

An AstraZeneca spokeswoman declined to comment on the planned center’s location. AstraZeneca says that its medicines are sold in more than 125 counties.

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