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Deerfield Management

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Deerfield Management Company
Company typePrivate
IndustryInvestment management
Founded1994; 30 years ago (1994)
FounderArnold Snider
Headquarters345 Park Avenue South, New York City, New York, U.S.
Key people
James Flynn (CEO)
ProductsHedge fund
Venture capital
Private equity
Private credit
AUMUS$15 billion (March 2023)
Number of employees
175 (March 2023)
Websitewww.deerfield.com
Footnotes / references
[1]

Deerfield Management ("Deerfield") is an American investment firm headquartered in New York City. It is focused on making public and private investments in the healthcare and biotechnology industries. Deerfield is considered to be one of the largest dedicated healthcare investment firms in the world.

Background

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Deerfield was founded in 1994 by Arnold Snider with $17 million in equity.[2][3][4][5][6] Snider was previously a pharmaceutical analyst for Kidder Peabody and then a managing director at Tiger Management making Deerfield one of the Tiger Cubs funds founded by former Tiger Management employees.[2][3][4][5]

In 2000, James Flynn joined Deerfield and would later become CEO of the firm.[2]

In 2005, Snider formally retired from Deerfield.[4][5]

In February 2019, it was reported that Deerfield has been profitable for the last five years with four of them having double-digit gains. It had a return of 11% for 2018.[2][3]

In May 2019, Deerfield acquired 345 Park Avenue South which would become its new headquarters.[7]

Notable deals

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In August 2015, Deerfield acquired IMRIS after it filed for Chapter 11 bankruptcy protection.[8]

In April 2017, Deerfield acquired Adeptus Health after it filed for Chapter 11 bankruptcy protection.[9]

In October 2017, Deerfield committed $50 million to the Broad Institute to promote drug discovery.[6][10]

In March 2019, Deerfield announced a strategic partnership with Harvard University to fund the development of drugs and medical treatments. Deerfield would commit $100 million to it which would be funded through a new company, Lab1636.[3][6]

In April 2020, Deerfield acquired Melinta Therapeutics by exchanging $140 million in secured debt for 100% equity of the company after it filed for Chapter 11 bankruptcy protection.[11][12]

Insider trading

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In May 2017, federal prosecutors filed insider trading charges against four individuals which were Christopher Worrall, a CMS employee, David Blaszczak, a political intelligence consultant and two of Deerfield's traders, Theodore Huber and Robert Olan.[13] This was concerning information about government-funding levels for cancer treatments and kidney dialysis from 2012 to 2014 which came from Worrall who passed it to Blaszczak and was eventually passed to the two traders. Prosecutors said that using the information, bets were placed that the stocks of three radiation companies would fall earning Deerfield $1.85 in million profit in 2012. In 2013, the Deerfield employees obtained further information from the contacts to short Fresenius Medical Care making $865,000 in profit. It was estimated that trades related to the information in total made over $7 million in profit. A third Deerfield employee, Jordan Fogel who was another trader, was charged in a separate civil suit. Fogel pleaded guilty in a bid for leniency and testified in court. Deerfield assets under management fell by 15% by June since the start of the prosecution.[14][15][16][17]

In August 2017, Deerfield agreed to pay $4.6 million to settle charges from the Securities and Exchange Commission that it failed to have adequate internal safeguards to prevent insider trading.[14][15]

In September 2018, Huber and Olan were sentenced to three years in prison and were ordered to pay more than $1.3 million.[15]

In June 2021, an attorney for the former Deerfield employees urged a federals appeals court in New York to toss their insider trading conviction after the Supreme Court ordered the court to reconsider its prior ruling upholding them.[18]

In December 2022, the federals appeals court threw out the insider trading convictions of the four individuals. In a 2-1 decision, the fraud and theft charges were dismissed.[19]

References

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  1. ^ "Form ADV" (PDF). SEC.
  2. ^ a b c d "Deerfield Posts Another Double-Digit Gain in 2018". Institutional Investor. February 21, 2019. Retrieved April 8, 2023.
  3. ^ a b c d "Deerfield, Harvard Team Up on Health Care Venture". Institutional Investor. March 13, 2019. Retrieved April 8, 2023.
  4. ^ a b c "Paid Notice: Deaths SNIDER, ARNOLD H". query.nytimes.com. Retrieved April 8, 2023.
  5. ^ a b c West, Melanie Grayce (March 22, 2013). "Focus on Health-Care Research". Wall Street Journal. Retrieved April 8, 2023.
  6. ^ a b c Gormley, Brian (January 9, 2019). "Biotech Investor Deerfield Is Financing Startups in University Labs". Wall Street Journal. ISSN 0099-9660. Retrieved April 8, 2023.
  7. ^ "Deerfield Buying RFR's 345 Park Avenue South, Lining Up $525M in Debt". Commercial Observer. May 7, 2019. Retrieved April 8, 2023.
  8. ^ "IMRIS Inc. Announces Going Concern Sale". Imaging Technology News. August 14, 2015. Retrieved April 9, 2023.
  9. ^ "Adeptus Health acquired by NYC hedge fund". Healthcare Dive. Retrieved April 9, 2023.
  10. ^ Rockoff, Jonathan D. (October 10, 2017). "Deerfield Management to Fund Biology Research at Broad Institute". Wall Street Journal. Retrieved April 8, 2023.
  11. ^ Missakian, Natalie (April 23, 2020). "Antibiotics maker Melinta emerges from bankruptcy under new ownership". Hartford Business Journal.
  12. ^ Al-Muslim, Aisha (March 13, 2020). "Deerfield Gets Greenlight to Buy Melinta Therapeutics Out of Bankruptcy". Wall Street Journal. ISSN 0099-9660. Retrieved April 8, 2023.
  13. ^ "SEC.gov | Hedge Fund Adviser Charged for Inadequate Controls to Prevent Insider Trading". www.sec.gov. Retrieved November 22, 2023.
  14. ^ a b Chung, Brody Mullins and Juliet (August 21, 2017). "Deerfield Resolves Insider Trading Probe With SEC". Wall Street Journal. Retrieved April 8, 2023.
  15. ^ a b c "'King of Political Intelligence' Sentenced to Prison for Insider Trading". Bloomberg.com. September 13, 2018. Retrieved April 8, 2023.
  16. ^ Pulliam, Brody Mullins and Susan (May 24, 2017). "U.S. Charges Four With Trading Insider Tips on Health-Care Policy". Wall Street Journal. Retrieved April 8, 2023.
  17. ^ "Ex-Trader Testifies at Trial, Drawing Spotlight to Hedge Fund". Bloomberg.com. April 6, 2018. Retrieved April 8, 2023.
  18. ^ Godoy, Jody (June 9, 2021). "2nd Circuit rethinks hedge fund insider trading convictions". Reuters. Retrieved April 8, 2023.
  19. ^ Godoy, Jody; Stempel, Jonathan; Godoy, Jody (December 27, 2022). "Insider trading convictions over healthcare leaks are voided by U.S. appeals court". Reuters. Retrieved April 8, 2023.
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