COVID startup based in GOP donor luxury apartment can get millions from USA

An obscure South Carolina company might be queuing up for millions of dollars in U.S. state aid to produce one coronavirus treatment after a former Republican senator with a financial stake in the company lobbied senior U.S. government officials, the Associated Press reports.

Plasma Technologies LLC, has received start-up money to test a possible COVID-19 anti-blood plasma technology. But as much as $ 65 million more could be on the way, an unexpected profit for the company, which operates out of the founder’s luxury apartment, according to internal government records and other documents obtained by the Associated Press.

The story of how a small business that exists only on paper has managed to capture so much top-level attention is emblematic of The Trump administration’s frantic response to the coronavirus pandemic.

And it’s yet another in the series of contracts awarded despite concerns over their proposals put forward by government scientists. The others include a $ 21 million study of the heartburn drug Pepcid as a COVID therapy and more than $ 500 million for ApiJect Systems America, a startup with an unapproved drug injection technology and no factory to manufacture the devices. In addition, a state whistleblower claimed that a $ 1.6 billion vaccine contract for Novavax Inc. was concluded due to objections from the government’s scientific staff.

At the heart of these agreements are Dr. Robert Kadlec, a senior Trump nominee at the Department of Health and Human Services, who supported the Pepcid, Novavax, and ApiJect projects. Records obtained by the AP also describe Kadlec as a key supporter of Plasma Tech, owned by Eugene Zurlo, a former CEO of the pharmaceutical industry and well-connected Republican donor. Three years ago, Zurlo brought Rick Santorum, who spent 12 years as a GOP senator from Pennsylvania, on board as a co-owner.

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Kadlec has come under pressure from the White House to act more urgently and not be bound by lower-level scientific officials whom Trump has criticized as “the deep state” and accused of politically motivated delays in the broadcast of COVID-19- vaccines and agents.

The AP reached out to more than a dozen blood plasma industry leaders and medical experts. Few had heard of Zurlo’s company or its technology to convert human plasma into protein-rich antibody therapies and would not comment.

Zurlo said in an email that the lack of plasma from recovered COVID-19 patients needed to make these therapies underscores the need for the technology he has patented to harvest as many of these proteins as possible.

Rick Santorum increases sales figures

In early April, shortly after Congress provided hundreds of billions of dollars to fight the pandemic, Santorum stepped up its sales figures for Plasma Technologies and the process, which the company described as “disruptive and transformative,” according to the records.

In mid-August, the federal government awarded Plasma Technologies a $ 750,000 grant to demonstrate that it could live up to its promises.

HHS would not comment when asked if Santorum’s public backing of the president helped the company he has a financial stake in get a government contract.

Santorum told the AP that it would have been a “crime” if he had not used his influence to get Plasma Technologies recognized. “Shame on me if I had not done so,” Santorum said, mocking the industry, which makes plasma products more focused on profits than making advances in technology.

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Plasma Technologies appeared to be on track in 2014 after the company licensed its system to a Dallas-based company, according to financial records filed with the Securities and Exchange Commission. But three years later, the agreement ended abruptly without producing any therapies approved by the Food and Drug Administration.

Santorum told the AP that he communicated directly with Kadlec, which he described as “very supportive” of Plasma Technologies. A spokesman for HHS said Kadlec “does not have a role in technical review of proposals or in negotiating contracts.”

Santorum’s initial pitch to HHS failed to gain traction among its experts, who did not see Zurlo’s technology as worthy of millions in emergency pandemic funding, according to emails and Rick Bright, former director of HHS ‘Biomedical Advanced Research and Development Authority. Kadlec oversees the agency, known as BARDA.

BARDA’s experts were looking for COVID-19 vaccines and treatments that could be delivered quickly, and Plasma Technologies’ project was a long-term effort. “They were not thrilled,” recalled Bright, a vaccine expert who has been sharply critical of Kadlec’s HHS tenure and filed a whistleblower complaint in May.

The Pentagon is showing interest

Plasma Technologies then approached the Department of Defense, which was also strongly committed to the government’s COVID-19 response. The AP received a copy of the company’s proposal on May 28, which sought $ 51.6 million to build a plasma fractionation facility in Raleigh, North Carolina or Atlanta, where the Centers for Disease Control and Prevention is headquartered.

In late July, Plasma Technologies’ fortunes began to change. Steven Morani, a senior Pentagon official who helps oversee the maintenance of billions of dollars in military equipment, had conferred with other military leaders. They were attracted to the idea of ​​an American-owned and operated plant for the production of plasma-based therapies.

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HHS would eventually support the initial $ 750,000 grant, according to government emails, with as much as $ 65 million in state money to come later to a commercial facility. That’s more than Plasma Technologies had asked for. The messages do not say where the extra money would come from or why it was necessary.

Morani referred the AP’s questions about the contract to a spokeswoman for the Department of Defense, Jessica Maxwell, who declined to discuss future funding for Plasma Technologies.

Santorum, who criticized a reporter for writing what he called a “political hit piece,” said Zurlo intends to donate any profits generated by Plasma Technologies to charities supporting the Catholic Church.

But Santorum had other plans for any financial return. “I have not made such claims as a father of seven having three weddings this year,” he said. “If any money were to come in, I would welcome that money to help pay my bills.”

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