Durham set to offer $2 million to Quintiles

DURHAM -- Durham County is prepared to offer $2 million in incentives to persuade Quintiles Transnational Corp. to create 1,000 jobs and expand its Research Triangle Park operations.

If the deal goes through, it would double the drug research company's employment here and be its largest expansion in years. But if Quintiles expands elsewhere, it could damage the Triangle's reputation as a center for contract drug research, which goes hand in hand with pharmaceutical development.

The expansion of the company's Durham headquarters would also include a new, 220,000-square-foot facility and more than $10 million in other local property investment, according to a county document. Quintiles has 16,000 employees in 53 countries, including 1,100 in North Carolina.

Quintiles helps drug makers test and sell new medicines. It is considered the largest contract research organization in the world by revenue and is best known for testing experimental drugs in large late-stage trials.

Quintiles has seen its contract research business thrive. In the past two years, regulatory scrutiny has increased, and drug makers are testing more to avoid debacles such as the 2004 recall of the painkiller Vioxx. Growth in clinical research is spurring the need for more project managers and research associates, said Dick Jones, a Quintiles spokesman.

"We plan on, over the next several years, hiring more people. [Durham] is one of several options we're exploring,"Jones said. He declined to address specific questions about the company's intentions in Durham or elsewhere and said he doesn't know when a decision might come.

State mum

The company may be waiting for state financial incentives. Deborah Barnes, a spokeswoman for the N.C. Department of Commerce -- which administers incentives deals to lure or retain industry -- did not respond to a request for comment Friday.

In Durham, county leaders are offering up to $2 million over a five-year period, contingent on the construction of the new facility and on Quintiles making the 1,000 new jobs open to area residents and not just transferring workers from other Quintiles offices.

"That's a lot of people going to work," said Becky Heron, vice chairwoman of the Durham Board of Commissioners. "We would hope a lot of those folks would live in Durham."

In August, Quintiles received $120,000 in incentives from the state and $400,000 from the Golden LEAF Foundation to help open a data processing center in Martin County that will create 60 jobs and invest $400,000 over the next three years.

Quintiles was founded in 1982 by current CEO Dennis Gillings, who was then a UNC-Chapel Hill professor. Quintiles was traded publicly until September 2003, when Gillings and several investors bought the company from shareholders for $1.75 billion.

At the time, Gillings said he wasn't planning to change the company's focus, name or headquarters location. The buyout saddled Quintiles with about $840 million in debt. But it also helped remove it from the scrutiny of investors and stock analysts -- and a market that punished it for three years of lackluster results. In 2005, Quintiles generated $1.9 billion in revenue -- up from $1.6 billion a year earlier -- and eked out a profit of $648,000.

Those were the last financial results the company reported.

Durham's incentives would help pay for job training, relocation and expansion expenses. A county public hearing on the issue is scheduled Oct. 23. If approved, it will represent one of the county's largest incentives packages in recent memory. In 2001, county commissioners voted to offer $2 million in incentives to EMD Pharmaceuticals for a $263 million drug manufacturing plant in Treyburn Corporate Park, but the German company later decided not to build the factory in the United States.

The following year, the county board awarded $2 million to AW North Carolina so the Japanese auto parts maker could double the size of its plant in Treyburn, creating 300 jobs.

(Staff writer Sabine Vollmer contributed to this report.)