In 2013, US Specialty Formulations (USSF) was an early-stage startup operating with $200,000 from investors and loans. Now, eight years later, the company is a leading manufacturer in the Lehigh Valley region, specializing in vaccines and small molecule sterile pharmaceuticals, which is expecting exponential job creation.

In light of 2020’s unprecedented challenges, USSF co-founders Dr. Kyle Flanigan and Dr. Garry Morefield have reached impressive milestones. Early in the pandemic, the startup partnered with VaxForm, LLC (owned by Morefield) to develop a COVID-19 vaccine. After positive pre-clinical trials and a $5.2 million incentive package from the Commonwealth, USSF is securing funding to ramp up its manufacturing capabilities in preparation for distribution. Early distribution of its oral vaccine is slated for a late-2021 release in the USA, pending federal approval. In the fall of 2020, USSF was recognized as one of the area’s fastest-growing companies by Lehigh Valley Business. And most recently, co-founder and CEO Dr. Kyle Flanigan was featured as one of three panelists at LVEDC’s 2020 Annual Meeting to discuss the region’s boom in the life sciences and medical manufacturing.

Panelists at LVEDC's Annual Meeting, discussing life sciences and medical manufacturing in the region.

Resiliency in the Region

On March 16, LVEDC released its 2020 Annual Report immediately following the virtual Annual Meeting. The hour-long program reviewed the previous year, highlighting the region’s 41 business expansions or business development projects, which resulted in the creation or retention of over 6,000 jobs.

As LVEDC President and CEO Don Cunningham assessed the impacts of COVID-19 on the region, citing “economic change we don’t fully understand yet,” he went on to note that “the arc has been bent,” and that the economy has been forever changed. While it has undoubtedly changed forever, the Lehigh Valley economy is also very resilient. And although the service and entertainment industry suffered significant revenue losses, much of the economic boost stemmed from record results in manufacturing and supply chain industries.

To dive deeper into the growth of the life sciences and medical manufacturing sector, LVEDC’s meeting included a conversation between Cunningham and three industry leaders, Sam Niedbala of CryoConcepts, Salvatore Salamone of Saladax Biomedical, and USSF’S Dr. Kyle Flanigan.

Location, Location, Location

During the discussion, the panelists shared their perspectives on what makes the Lehigh Valley so attractive to business owners. USSF’s Dr. Flanigan cited the Valley’s location as the most significant factor in selecting the area for his company to take root. Proximity to the Lehigh Valley International Airport, major highways, and overall transportation infrastructure helped finalize the decision when searching for their facility location.

Initially, USSF moved into Ben Franklin Technology Partners of Northeastern Pennsylvania, the Bethlehem-based incubator. In 2015, two years later, it was clear the pharmaceuticals manufacturer was outgrowing their space. They began searching for a new facility that would provide room for expansion.

Dr. Garry Morefield (left) and Dr. Flanigan (right) of USSF in Allentown facility.

Enter AEDC

Conveniently, Dr. Flanigan knew where to turn for help. He had remained in touch with Allentown Economic Development Corporation’s Program Manager, David Dunn since they had worked together years prior. While Dunn was employed at Lehigh University’s SBDC, he discussed with Flanigan government contracting issues. Once Dunn became the Program Manager at AEDC, he kept Flanigan aware of resources for growing businesses, and when the time arose, Flanigan swiftly became a client of AEDC’s “Urban Made” business outreach and retention initiative. In his role as AEDC Program Manager, Dunn worked with Flanigan to scour available properties and finally, to locate the 41,000 square foot building in South Allentown that USSF now owns. But even after finding the most suitable property, there was still one problem: the manufacturer needed a gap loan to avoid tying up cash reserves.

USSF required a financing option that provided competitive rates and a flexible structure. Dunn assisted the manufacturing company to finance the building purchase by applying for a Pennsylvania Minority Business Development Authority (PMBDA) loan, a program administered through AEDC which provides loans to socially or economically disadvantaged borrowers. As a minority-owned company, USSF qualified for a $250,000 loan that was used for the building acquisition and renovation work.

When Flanigan received the loan in 2019, he explained, “It was hard to find a building that met our needs. We’d been looking for over four years since we outgrew our current startup space. LVEDC had assisted with our pursuit as well, and we had tried to purchase three other buildings prior to the one in Allentown. It’s quite challenging to find move-in-ready space the size we needed in the region that is between 5,000 and 20,000 sq. ft. It needed to be able to accommodate large machines, a clean room, and space to segregate materials and for process flows. And it needed to be a flexible space so we can change the layout when needed based on client and production needs.”

What’s Ahead

US Specialty Formulations is in the process of expanding operations inside its facility on Lexington Avenue. The pharmaceuticals manufacturer closed 2020 with 14 full-time employees; Flanigan anticipates needing an additional 16 employees by the end of 2021 and expects to on-board an additional 90 employees over the next 2-3 years. The future of medical manufacturing in Allentown looks bright!

USSF in the News 

USSF partners with VaxForm to develop COVID-19 vaccine.

USSF moves into Allentown.

Lauren Matthews