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N.Y. firm opens $1.6B healthcare investment fund


By Rachel Landen
Posted: April 10, 2014 - 2:30 pm ET
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Deerfield Management Co., a New York investment firm, has opened a $1.6 billion private investment fund to provide financing to healthcare companies.

Using equity, debt, royalty interests, joint ventures and other financing alternatives, Deerfield Private Design Fund III will invest in healthcare companies across the spectrum. Investments will include start-ups as well as more established companies in the biotechnology, pharmaceutical, medical-device, healthcare services and animal-health markets.

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“Deerfield is proud to play a leading role in advancing innovation in the development and delivery of healthcare products and services through investment, information and philanthropy,” James Flynn, managing partner at Deerfield, said in a news release. “Few other industries can have such a profound impact on the quality and length of life.”

Deerfield previously launched two healthcare investment funds, Deerfield Private Design Fund I and Deerfield Private Design Fund II. The investment period for the first fund is now over and the $500 million fund is expected to close in July 2015. The second fund is in the final stages of committing its approximately $1 billion in investments.

Since the firm launched in 1994 with $17 million in equity, it has invested in companies to fund research and development, acquisitions, growth, and balance-sheet restructuring. Yesterday, Deerfield announced that it has entered into a $27.5 million debt financing agreement with orthopedic-device company OMNIlife science to help strengthen its balance sheet, finance the expansion of its product line, and advance the commercialization of its computer navigation and robotic platform for joint-replacement procedures. The financing will come from Deerfield Private Design Fund II, not the most recently-launched fund, said Karen Heidelberger, a partner at Deerfield Management.

Follow Rachel Landen on Twitter: @MHrlanden


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