U.S. Specialty Formulations Moving Into New Allentown Space

By Colin McEvoy on May 16, 2019

After five years of growth in the Lehigh Valley’s entrepreneurial ecosystem, a pharmaceuticals manufacturer is growing and expanding in the region, moving into a larger new space in the city of Allentown.

U.S. Specialty Formulations (USSF), which had been operating out of the Ben Franklin TechVentures incubator in Bethlehem since 2014, is now moving into a 40,000 square-foot building on East Lexington Avenue in the south side of Allentown.

The expansion means the company’s current staff of 12 full-time employees and consultants is expected to grow to 50 or more over the next five years, according to Kyle Flanigan, co-founder and CEO of USSF.

The company considered sites in other states for its expansion, including Florida and Arizona, as well as other parts of Pennsylvania. But they ultimately decided to remain in the Lehigh Valley.

“This is a key inflection point in the growth of USSF,” Flanigan said. “With the acquisition and refit of this facility, USSF is able to offer our customers significantly larger manufacturing and storage capacity as well as have the ability to incorporate more complex manufacturing flows for production.

Flanigan said the Lehigh Valley’s location provides access to an airport with long runways as well as access to major interstate roadways running east-west and north-south.

“I look forward to expanding our footprint in the Lehigh Valley,” he said.

USSF is a specialty cGMP contract manufacturer for sterile injectable pharmaceuticals. USSF cost-effectively produces specialty formulations of pharmaceuticals in small to medium sized batches for larger pharmaceutical and healthcare organizations.

“It’s great to see a company begin as a startup in the Lehigh Valley, grow and thrive thanks to the resources available to entrepreneurs here, and then decide to stay in the region,” said Don Cunningham, President & CEO of the Lehigh Valley Economic Development Corporation (LVEDC). “Companies like U.S. Specialty Formulations are a key component to the success of our manufacturing sector, the second-largest sector in the Lehigh Valley economy.”

LVEDC assisted USSF in exploring financing options, helped connect them with lenders, provided real estate sites for consideration, and helped prepare an environmental assessment request through the Lehigh Valley Land Recycling Initiative, LVEDC’s redevelopment program.

The company will move into the new building in stages as renovations are completed, with the full build-out expected to be complete after five years. A transitional clean room will be established first, followed by an office, production, support services, and shipping and receiving areas.

“It’s good for our economy when a high-tech business like U.S. Specialty Formulations grows out of Ben Franklin TechVentures and into ownership of their own building in Allentown,” said David Dunn, program manager with Allentown Economic Development Corporation. ““Keeping firms like this in the valley says a lot about what we have to offer.”

USSF focuses on specialty products such as sterile injectables and prescription topicals for both humans and animals, as well as investigational drugs for clinical trials. The company can manufacture these products from a recipe provided by a client, or if needed can develop an acceptable formulation and teach the client how to produce it. USSF has grown to supporting over 300 clients world wide and providing clinical materials in multiple phase 1 investigational drug studies.

The company started in 2013 with $200,000 from investors and loans, and by the following year entered TechVentures, the Bethlehem-based business incubator program operated by the Ben Franklin Technology Partners of Northeastern Pennsylvania.

As a resident company there, USSF operated its first clean room and tested its business model of producing products in low volumes to determine if they meet U.S. Food and Drug Administration (FDA) guidelines. Flanigan said USSF is currently one of only 70 companies in the United States successfully operating as an Outsourced Manufacturer.

When looking for its new space, Flanigan said they considered leasing a building, but found it did not make financial expense since it would require expensive customizations like constructing a clean room. After settling on purchasing a building, USSF opted to pursue gap financing through the Pennsylvania Minority Business Development Authority Revolving Loan Fund, which is administered in the Lehigh Valley region by AEDC.

“USSF’s use of the PMBDA program for gap financing helped make their building acquisition a reality and we are proud to be a part of that,” said Dunn, who had recommended the company pursue the loan through the fund. “We hope more small businesses consider its competitive rates and flexible structure for their financing needs.”

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