By RICK SMITH, Local Tech Wire Editor

RESEARCH TRIANGLE PARK, N.C. – , the world’s largest life sciences services company, is among the financial losers in Eli Lilly’s announcement Tuesday that it would stop development of a potential treatment for Alzheimer’s.

Through its NovaQuest financial arm, Quintiles had taken a financial stake in development of the compound known as semagacestat.

The privately held company would not disclose financial details, but media reports have indicated that NovaQuest was a 10 percent investor alongside a hedge fund in a deal that could have been worth some $325 million with Lilly.

Lilly partnered with Quintiles and TPG-Kaxon Capital for late-phase development of two compounds targeting Alzheimer’s. The $300-million plus figure was based on both compounds reaching full development.

No jobs will be affected by the decision to halt development of semagacestat, which Quintiles was testing, the company said.

“Halting development of investigational drugs is a part of the clinical trial process in the biopharmaceutical industry,” Jay Johnson, senior director of corporate communications for Quintiles, told Local Tech Wire and WRAL.com.

Johnson noted that Quintiles continues to work with Lilly on other projects.

“We are proud to be an ally with Lilly in developing its other Alzheimer’s products, and are now focused on advancing them through the development process in hopes of bringing new and better treatments to patients with this disease,” Johnson said.

Partnering with pharmaceutical firms and investing in drug development is part of a relatively new strategy by Quintiles. Drug firms around the world are seeking partners to share in the financial risks and potential rewards of compound development since R&D costs can be extraordinarily high. Failure rates also are high with most candidates not advancing beyond early-stage trials.

Alzheimer’s has thus far proved to be virtually impossible to combat effectively. The Alzheimer’s Association says some 75 potential treatments are being tested on humans.

Asked how Lilly’s decision would affect Quintiles, Johnson said there would ne “no material impact.”

He also said no jobs would be affected.

“We have a backlog of development work to which we can shift staff who had been working on this project,” Johnson explained.

He added that Quintiles would continue to work with Lilly on another compound – solanezumab – which also targets Alzheimer’s and is in Phase III trials.

TPG-Axon Capital and NovaQuest agreed to provide some $300 million in co-development and co-promotion, according to the announcement made some two years ago.

Quintiles received fees for services related to the trials.

In return, the investors were to receive milestone payments and royalties.

Lilly said Tuesday that it halted the development of semagacestat since trials showed that the compound did not slow Alzheimer’s and in fact made some patients worse. Some 2,600 people were being tested.

Memory and the ability to perform daily activities were affected "to a statistically significantly greater degree" than patients receiving a placebo, Lilly said. Skin cancer risks also increased.

The Lilly failure is hardly the first in attempts to fight the deadly disease. Myriad Genetics and Pfizer efforts have failed, and one developed by Pfizer, Johnson & Johnson and Elan has had mixed results, The Associated Press reported.

Lilly Chairman and CEO John Lechleiter said the company remains committed to developing new drugs while competitors make large-scale acquisitions. The industry is racing to compensate for patent expirations that will hit in the next few years and expose many key drugs to generic competition.

"In a risky business like ours, these things do happen," he said. "One failure of this sort does not undermine our strategy."

The Associated Press contributed to this report.

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