Pharma packaging startup for hospitals building $50M Columbus-area plant, adding 300 jobs

(COLUMBUS BUSINESS FIRST)–A startup that compounds custom pharmaceuticals and prepackages them for hospitals plans to open a $50 million facility just west of Columbus and add 300 jobs.

The facility will be four to five times larger than its Denver home base.

Staq Pharma Inc. isn’t moving, but to oversee the project, the CEO did. Co-founder Joe Bagan bought a home in Upper Arlington last fall.

“When we’re doing a project this large, this is a bet-the-company project,” Bagan told Columbus Business First. “It deserves the attention of our CEO.”

Rev1 Ventures, Nationwide Children’s Hospital, and Cincinnati Children’s Medical Center were repeat investors in a $43 million funding round that closed Wednesday. The Series C was led by several hospital systems or their venture arms, including Cleveland’s University Hospitals, Froedtert Health, UNC Health and LCMC Health.

Staq opened its first clean-room packaging and distribution facility in 2019 in Denver, at first serving pediatric hospitals, which need specialized compounding of anesthesia and other drugs for children. It has added adult acute care systems as clients. The Columbus and Cincinnati children’s hospitals were early customers and investors that year, along with Rev1.

“From day one, we were always interested in the potential of an Ohio presence,” said Rev1 CEO Tom Walker. “It’s quite an accomplishment to get in just a handful of years to this point. They’re halfway through a significant buildout.”

Bagan, a lifelong Denver resident until now, did not realize Central Ohio’s strategic advantage until One Columbus leaders showed him an oft-touted statistic that the city is within a day’s drive of half the U.S. population and corporate headquarters.

“Honestly that sealed the deal for us,” Bagan said. “We’re a day’s drive from a massive amount of our customers.”

The hospital, Rev1 venture development group and One Columbus made introductions to other companies in a fast-growing biotech cluster, including Andelyn Biosciences and Forge Biologics, he said.

“They have been phenomenal about introducing us to the biotech community,” Bagan said. “Feeling like you’re part of a growing biotech community, that means a lot for a company like mine.”

Like those gene therapy manufacturing startups, Staq builds facilities to meet the U.S. Food and Drug Administration’s strictest standards for maintaining sterility.

Biotech giant Amgen and semiconductor maker Intel announced huge Central Ohio projects after Staq committed, which Bagan said is “icing on the cake” for training a workforce in clean-room technology. (Intel uses clean rooms, but isn’t FDA regulated.)

“There’s a lot going on here,” Bagan said.

One Columbus, the regional economic development group, also helped find the site: A warehouse at 255 Phillipi in Franklin Township. It’s been vacant since Express Scripts shut its warehouse there in 2018.

Staq bought the 137,000-square-foot building for $3.7 million in July. The usable space for Staq’s purposes is almost double the footprint, Bagan said.

Franklin County Commissioners on Tuesday approved a 50% property tax abatement on newly added value for 10 years. The property is within a broader west side Community Reinvestment Area the county created a year ago to bring back manufacturing in the area, where commercial developments have fallen into disrepair, Emanuel Torres, assistant economic development director, told commissioners in the recorded meeting.

The county deal calls for adding 150 jobs over the first three years. Walker and Bagan said it could grow to double that.

While the prescription mail-order business left power capacity and other useful infrastructure, Staq needed to gut the warehouse to build its clean rooms inside. It’s building to the FDA’s specifications for a regulation called 503B, created in 2013 specifically for outsourced compounding and packaging of pharmaceuticals.

“We do what hospital pharmacies used to do, but want to do less of,” Bagan said.

A hospital pharmacy without clean-room technology can pre-fill syringes for anesthesia, but it lasts weeks. Staq’s products have shelf lives as long as 180 days.

The company was unique in its pediatric focus, Bagan said, and because it built from scratch to meet the new regulation instead of retrofitting older compounding pharmacies. Its name stands for “safety, transparency, availability, quality.”

This is the first investment from Rev1’s all-private $20 million Fund II that launched last summer.

“Building an FDA-regulated 503B facility is a significant undertaking,” Walker said. “We see that as an important market needs in the U.S., not just in Columbus. Backing a team that has that experience and can bring that to market is an interesting opportunity.

“What that would mean for our overall innovation sector, we view that as a very important venture to back and support as they go about this buildout.”

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