The healthcare investment firm Deerfield Management has committed $100 million as part of a new alliance with Harvard science researchers aimed at promoting drug innovation.
As part of the deal, Deerfield will form a private company called Lab1636 — owned solely by its affiliates — to support Harvard researchers’ projects in “various stages of drug discovery and development,” according to a press release. The University’s Office of Technology Development coordinated the new partnership.
“We envision the Harvard-Deerfield collaboration as a powerful means to fuel translational research across the University, enabling promising innovations to advance beyond their laboratory roots,” University Provost Alan M. Garber ’76 said in the release.
Deerfield has poured hundreds of millions of dollars into drug research at prominent universities around the country, including Northwestern University and Vanderbilt University. The hedge fund also previously pledged more than $50 million to the Broad Institute — a Harvard-MIT research collaboration — to advance “therapeutic research projects,” according to the Institute’s website.
In recent years, Deerfield has found itself in hot water following criminal convictions against two former partners and allegations that the firm’s policies around the use of confidential information were too lenient.
The firm agreed to pay $4.6 million in 2017 to settle claims from the Securities and Exchange Commission that it failed to maintain policies to prevent misuse of private or confidential information, but the firm did not admit wrongdoing. The following year, two partners at Deerfield each received a 36-month sentence for insider trading. The men obtained confidential information about changes to Medicare reimbursement rates from an employee at the U.S. Centers for Medicare and Medicaid Services, which they then used to participate in trades for Deerfield.
OTD spokesperson Caroline Perry declined to comment on the controversy or whether it had any impact on Harvard’s decision to join the partnership, pointing to the company’s existing funding arrangements with other universities.
“Harvard OTD enters into research agreements with corporate partners who express a commitment to advancing science by supporting research initiated by Harvard faculty,” Perry wrote in an emailed statement. “Our R&D alliance with Deerfield will focus on advancing biomedical innovations toward the development of new therapeutics.”
James E. Flynn, managing partner at Deerfield, called the University an “outstanding partner” in the press release announcing the collaboration.
“The University’s outstanding science, breadth of technologies, and mix of esteemed junior and senior faculty constitute a fertile environment for the continuous generation of novel insights,” he said. “This, in combination with its experience advancing potential therapeutics, makes it the perfect place to establish an impactful translational partnership.”
A joint advisory committee will decide which projects Lab1636 takes on, according to the press release.
— Staff writer Jonah S. Berger can be reached at firstname.lastname@example.org. Follow him on Twitter at @jonahberger98.