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Regional Report Triangle May 2011


Apple of Hillsborough’s eye 

For a purveyor of pornography, Adam & Eve has become a respected business leader. As the country’s biggest adult retailer celebrates its 40th anniversary, the mayor and the chamber of commerce in Hillsborough, where it and parent PHE Inc. have been based since 1994, can’t say enough about its economic and philanthropic contributions.

In 1969, Phil Harvey, then a UNC Chapel Hill graduate student, started out selling condoms by mail — then illegal — to finance population-control efforts in the Third World. Two years later, when the business branched into catalog sales, Adam & Eve was born, offering not only condoms but sex toys, lingerie and erotica. After it started selling adult videos in 1981 — it began producing them in 1993 — the company drew the attention of law-enforcement officials. The ensuing battles cost Harvey $3 million in legal fees.

Nowadays, the privately owned company is considered a model corporate citizen. Its headquarters, which includes a call center, the marketing department and a 58,000-square-foot distribution center, provides jobs for 350, making it the town’s fourth-largest employer. It’s the sixth-largest property-tax payer. Town Manager Eric Peterson credits it with helping establish a growing distribution cluster.

The company’s generosity, coupled with its discretion, has won it favor. “The fact that they’re so willing to give — and give anonymously — has helped people develop a good opinion of the company,” says Margaret Wood Cannell, executive director of the Hillsborough/Orange County Chamber of Commerce, which named PHE its business of the year in 2005.

“The very first correspondence I received as mayor,” Tom Stevens says, “was from somebody in Missouri asking if I knew we had this company in town.” He declined the writer’s offer to help run it out of town. “That was the same month our chamber voted them business of the year.”

Harvey laughs when asked if he’s worried that his company, which grossed $113 million in 2009, has become too mainstream. “We don’t mind being liked.” There’s still resistance when one of its franchise stores — there are 40, with plans for 40 more — open. “When you’re in the business of selling sexual accoutrements, you don’t have to worry about lack of controversy

DURHAM — Drug developer Tranzyme netted about $48 million in its initial public offering of stock, despite having to cut the price of its shares. It originally sought to sell 5 million at $11 to $13 each, but it sold 13.5 million at $4 each.

Quintiles Transnational will delay borrowing more than $2.4 billion because of recent unfavorable conditions in the global credit market. The contract-research organization had planned to refinance about $1.7 billion in debt and said it would use the rest for other purposes, including possible acquisitions.

GARNERStrategic Behavioral Health plans to build a $12 million treatment center that will create 250 jobs. The 92-bed center, scheduled to open next year, will provide care for children who suffer from emotional and behavioral problems.

RESEARCH TRIANGLE PARKEisai laid off about 70 employees here, trimming employment to about 250. The cuts were part of a restructuring by the Japanese drug maker that eliminated about 600 U.S. jobs.

DURHAMSquare 1 Bank, which focuses on venture-capital-backed companies, hired Doug Bowers as its CEO. Bowers, who spent more than 25 years at Charlotte-based Bank of America, succeeds the company’s founder, Richard Casey, who died in November.

DURHAMAdvanced Animal Diagnostics, which is developing technology to diagnose diseases in farm animals, appointed Randall Marcuson as its chairman. Marcuson was CEO of Durham-based Embrex from 1990 to 2007.

Merck agreed to buy Raleigh-based Inspire Pharmaceuticals for about $430 million. The New Jersey-based drug maker, which employs about 1,000 at two other locations in North Carolina, plans to keep Inspire’s roughly 175 employees. Just three months earlier, Inspire had announced disappointing test results for a cystic fibrosis treatment and watched its stock price drop 60% in one day. Shares rose 25% to $4.97 the day the acquisition was announced.

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