Deerfield Management launches $550 Million Healthcare Venture-Capital Fund

Wednesday, July 29, 2015

Deerfield Management Company, L.P. announced the launch of the DeerfieldHealthcare Innovations Fund, L.P., which will invest in groundbreakingadvancements in science that may lead to therapeutic interventions in geneticdiseases, cancer, and orphan diseases. The venture capital fund will also backnew technologies which can transform how therapeutics are developed and improvethe way healthcare is delivered to patients.

The fund, one of the largest healthcare-focusedventure funds in the sector, will donate all profits not allocated to investorsto the Deerfield Partnership Foundation to support its charitable purposes toimprove the provision of healthcare services to underserved children andinvestment in healthcare research, including orphan diseases, age-relatedconditions such as Alzheimer’s disease, and other therapeutic, diagnostic andhealthcare service delivery breakthroughs.  The Deerfield Foundation is employee-funded andmanaged and has raised more than $25 million to advance children’s health inNew York City, where the company is headquartered, as well as projectsworldwide.

The Deerfield HealthcareInnovations Fund, which closed in July, includes external commitments of $550million.  Investors include prominent healthcareinstitutions, such as New York-Presbyterian Hospital, Memorial Sloan Ketteringand Seattle Children’s Hospital, and philanthropies, such as the Robert WoodJohnson Foundation. Leading universities with cutting edge research, such asPrinceton University and Northwestern University, are also among the investorgroup.

“Theunprecedented advances in our understanding of the biology of disease combinedwith the application of new technologies allow for life-altering changes inmedical practice. The pullback in funding that has occurred for theseinnovations over the last decade could not have happened at a worse time,” said James Flynn, president and managingpartner of Deerfield. “Our unique model of producing research through the DeerfieldInstitute and our philanthropic endeavors through the Deerfield Foundationallows us to provide value to innovative institutions, companies and patientsthat goes well beyond capital.”

The Deerfield Institute, a teamof about 40 healthcare experts, in partnership with other leading healthcare organizations,will author at least 10 original peer-reviewed articles in 2015.  Publishing these proprietary findings isaimed at sharing knowledge with healthcare researchers and providers inaddition to helping inform healthcare policy.

“Research funding in health and lifescience innovation has decreased in recent years, which unfortunately leavesmany areas of important research unsupported,” said William Slattery, partner.“This fund provides a significant opportunity for greater innovation in thehealthcare and life science sectors, which hold not only substantialopportunities for advancement, but also have the greatest financing needs.”