Ebb & Flow

Lilly’s project finance

Eli Lilly (NYSE:LLY) pulled a play from the biotech book when it did a deal with hedge fund TPG-Axon and Quintiles’ NovaQuest unit for $300 million in funding to conduct trials of its two lead candidates for Alzheimer’s disease (AD), gamma secretase inhibitor LY450139 and an unnamed antibody against beta amyloid.

The candidates were already in trials at Quintiles and the CRO expects to conduct a total of three Phase III trials for the two compounds, NovaQuest SVP Tom Perkins told Ebb & Flow. TPG-Axon and NovaQuest are eligible for milestone payments and mid- to high single-digit royalties.

After the deal was announced last week, Lilly reported interim Phase II data for LY2062430 at the International Conference on Alzheimer’s Disease meeting in Chicago. Treated patients had increased levels of four beta amyloid variants in the blood and cerebrospinal fluid (CSF), which the pharma said suggested the agent is helping to dissolve amyloid plaques(see B14).

The international Phase III IDENTITY trial of LY450139 began in April. The unnamed antibody is in Phase II. Lilly said the deal will allow it to focus resources on advancing additional molecules in its pipeline.

NovaQuest, which gets a fee, was established by TPG-Axon and Quintiles in 2006 (see BioCentury, May 22, 2006). According to Perkins, NovaQuest works with partners to identify opportunities and typically does due diligence on a deal. TPG-Axon then contributes a portion of an investment, usually a majority, while Quintiles picks up the remainder.

Quintiles has invested a total of $2.4 billion in co-promotion and co-development deals. Its largest deal to date also was with Lilly, a $400 million deal in

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