Athens, Ohio-based RXQ Compounding LLC, an outsourcing facility that produces medical formularies and medications, has raised nearly $3.6 million in funding. The investor was Advantage Capital.
ST. LOUIS–(BUSINESS WIRE)–Advantage Capital today announced a nearly $3.6 million investment in RXQ Compounding, LLC, an FDA-approved outsourcing facility that manufactures medical formularies and medications used in physician offices and hospitals across the country, located in Athens County, one of Ohio’s hardest hit rural areas.
The investment, including $1 million in equity under the Ohio Rural Business Growth (RBG) program, will help RXQ expand its new Albany manufacturing facility, increase research and development, and create as many as 100 jobs. In an area where more than one in every four people is unemployed, job creation of this magnitude shows the significant impact the RBG program will have on Ohio’s rural communities.
“RXQ is a perfect example of what the Ohio Rural Business Growth program was designed to do: ensure businesses in our rural communities have access to the capital they need to grow and promote economic development,” said State Representative Jay Edwards. “The company’s extensive job creation and expansion is the exact impact we are looking for, helping to create investment, opportunity and economic vitality in our small towns and rural communities that have too often been left behind.”
This first investment in the RBG program comes at a time when traditional private equity funds have historically overlooked opportunities to invest in rural America. Since 2000, only 1% of venture capital has been invested in rural small businesses.
“We are passionate about growing the company in Ohio and developing a robust workforce in Athens County,” said Ed Zatta, CEO of RXQ. “This investment is critical to our expansion and ability to not only increase R&D, but also create 100 new high-paying jobs in our community. We fully expect to become the largest employer in the county, offering highly accessible jobs and investing in training to ensure our employees gain the foundation necessary to succeed in a growing industry.”
Founded in 2015 out of the Ohio University Innovation Center, RXQ is focused on addressing the growing demand for compounded pharmaceuticals. Many of its medications are everyday products required for patient care, such as the local anesthetic lidocaine. The company currently ships to 38 states and compounds more than 160 formularies, all of which are in high demand in hospitals and clinics.
Compounding facilities are one of the fastest growing areas in the healthcare industry, due to the rise of chronic diseases and increasing need from patients that cannot be treated with mass-produced FDA-approved medications. In 2002, less than 20% of hospitals elected to outsource any compounding needs. By 2017, 75% of hospitals were outsourcing these needs, and demand continues to grow.
“We are excited to expand our portfolio in Ohio and help move the state’s economy forward through innovation, business expansion and job creation. With RXQ, we utilized our full toolkit of investment capabilities to support the company’s growth plans, and we applaud its success and commitment to creating local jobs,” said Chris Harris, senior vice president at Advantage Capital.
Along with the Ohio RBG program, the investment was also made in connection with the federal New Markets Tax Credit program. Both were designed to increase the flow of capital into disadvantaged communities, growing businesses and creating jobs and opportunity in areas where access to capital and private investment is hard to find.
“By partnering with state and federal economic development programs, we’re able to provide both cost-effective debt capital and flexible, long-term equity capital to meet the unique needs of companies like RXQ. We are excited to replicate this investment model in support of other rural businesses across Ohio that need growth capital,” said Harris.
About Advantage Capital
Advantage Capital provides financing to established and emerging companies located in communities underserved by conventional sources of capital. Since 1992, the firm has invested more than $2.6 billion in companies from a diverse array of industry sectors, and has helped support more than 48,000 jobs. Learn more at www.advantagecap.com, or via Twitter or LinkedIn.
About RXQ Compounding, LLC
RXQ Compounding is an FDA Approved 503B Outsourcing Facility in Athens, Ohio. The company manufactures sterile and non-sterile medications, and formularies including products on the FDA shortlist. It is currently licensed to ship to 38 states and Washington, D.C., with licenses for other states on the horizon. Learn more at www.rxqcompounding.com.