Quintiles unit plans $150 million bond sale, secured by Duloxetine royalties

By Ronda Fears

Nashville, Aug. 19 - Quintiles Transnational Corp. announced that its newly formed subsidiary, Duloxetine Royalty Sub, intends to issue $150 million of Duloxetine secured notes, plus as much as $50 million to $150 million of additional notes, depending on market and other conditions.

Quintiles expects to use the net proceeds it will receive from Royalty Sub to repay in full all outstanding term loans, if any, under Quintiles' existing senior secured credit facility, for any other purposes permitted under Quintiles' other debt arrangements and for general corporate purposes.

Payments of principal and interest on the notes will be made solely out of royalty and other payments to be made under an existing agreement between Quintiles and Eli Lilly & Co., which are based on Lilly's U.S. sales of Cymbalta, a drug used to treat depression and diabetic pain.

Quintiles will sell its rights to the royalty and certain other payments under the agreement to Royalty Sub, which will then purchase the rights using proceeds from the note offering.

Last Friday, the Research Triangle Park, N.C., company reported second-quarter revenues surged 26% year over year, topping $537 million. However, restructuring charges of $72 million related to the sale of its preclinical services, pharmaceutical sciences and clinical trials supplies business pushed the net loss to $44.2 million from a loss of $10.1 million in the year-ago period.

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