New York City is working overtime to succeedlife sciencesplayer to fight his way to the top of the leading cities in this area, which are now Boston and San Francisco.
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Deals included the Icahn School of Medicine at Mount SinaiResearch-focused 165,000 sf lease at 787 11th Avenue by Georgetown Companyand C16 Life Sciences19,000 sf lease at the Hudson Research Center at 619 West 54th Street.
The mother of all New York biotech establishments is Alexandria Real Estate Equities1.3 million square foot campus on the East River at East 29th Street. The first of the two towers was inaugurated in 2010. And the opening of the citya technology-focused campus on Roosevelt Island,Jointly operated by Cornell University and the Technion-Israel Institute of Technology, it helped feed the animal.
Still Manhattan-based Deerfield ManagementHealing Initiative at 345 Park Avenue Southit is a peculiar and remarkable addition to the life sciences. In 2019, the investment firm paid $345 million for the Art Deco office building, completed in 1913, in the Flatiron District, one block east of Madison Square Park. This puts you near the epicenter of innovative technology and the creative ecosystem of Silicon Alley in Manhattan.—one with commercial rents as high as anywhere in Manhattan.
And Deerfield isn't just aiming to provide tenants with lab space at the Cure. The goal is to address the whole person, not just the scientist. It will have an outdoor terrace on the roof, and its salt snack bar will have its chemical formula, NaCL, as will its sweat gym, which will be called NaCL + H2O.
Commercial Observer visited the building in late June and spokeKaren Heidelberger, a Deerfield partner and its Director of Partnerships and Communications, who answered a series of questions about the Cure initiative, which is still under construction and not expected to be fully operational until the fall. Here are some of his responses, lightly edited for clarity and brevity.
Commercial Observer: What advice would you give New York City politicians to transform the city into a permanent center for life sciences?
Karen Heidelberger:New York has done great things with its past initiatives. You think about it in many right ways.
Another thing they might be considering is how to bring more capital to New York City. With more dollars to invest in companies coming out of academic institutions, more companies could be supported here. The initiatives they have taken have been incredibly eco-friendly. The spark is there. She is getting closer and closer to the real engine and I think she will take off very soon.
You can see that this is already happening. The number of venture dollars being invested in projects here has risen from 6 cents (per dollar of funding from the National Institutes of Health) to almost a dollar, which is very close to Boston and San Francisco. That's a phenomenal difference from what it was just a few years ago.
Do you think New York has what it takes to be a major life sciences center compared to Boston and San Francisco?
No doubt. You have all the science here. It has all the people here. It just takes some experience to create the actual ecosystem, then you have a lifecycle generation going.
Is this in some way a consequence of what is happening on Roosevelt Island?
Phenomenal science here in New York. They don't have the tried and true management teams yet. So when a company moves from an academic institution, it must find the management team for that project. Management teams are now located in Boston and San Francisco, as well as in different regions of the country. So it's easier to bring technology to one of these cities than to stay here.
Once companies stay here, you have a bunch of management teams with construction experience and already in the area.
We have to acknowledge that the failure rate, at least for drug development companies, is around 95 percent. Those who bring a management team to New York when they have a 95% failure rate must have other options in the area to relocate.
The ecosystem of companies that emerge and establish themselves in the region will attract management teams—CThat means you need the dollars invested in these areas to support business. You need the dollars, you need the management teams, and you need the technologies.
This building will help build management teams by training them. You already have the science, and this building also provides some capital. You're going to need a little bit more capital to support some of these startups and then you have an ecosystem.
There is capital in New York, but it is not always centered in New York.
He didn't start out as a life science specialist; You started out as a finance person. What's exciting is taking the financial framework that exists here and applying it to the life sciences.
Of course, for New York in particular, there are many financial institutions that have a lot of dollars. Biotech, in particular, is heavily oriented towards venture capital in its early stages. It is a very risky endeavor and requires specific skills focused on early stage science. You can't just look at the big financial institutions and assume they have the capacity.
So when I say you need dollars, I'm not just thinking biotech, I'm thinking pricing, services, digital technology and everything else. They usually stay out of the conversation and they shouldn't. You need money very soon.
The conversation has changed a lot because those dollars are not needed right now because IPOs are happening much earlier; but those dollars are still vital in these companies.
Can you talk about some of your associations?
What is happening [with science locked up in academic institutions] is that there is something called "the valley of death." This is because NIH funding stops when basic research stops, and basic research is only about understanding science. Anything beyond that, where you could use the basic research for a commercial application, is called "translational research." And this translational research requires a different kind of money; NIH dollars don't work.
That's where venture capital comes in. Venture capital in early stages for several yearsgot incredibly hurt and lost all his money in this area. So a lot of people left. It's also a skill that many scientists don't understand. Understanding it requires certain skills and risk capital.
As such, Deerfield has established [between 20 and 30] various partnerships, some of which are joint partnerships with various academic institutions. And what we do is make an agreement with the academic institutions and work with the scientists in those places. They work in science and we do all the translation work for them. This means that scientists focus on what they are good at and we focus on what we are good at.
We hope to teach a few people this way: to help spread this science to advance healthcare.
And what is that part of this building [at 345 Park Avenue South] like?
It all comes down to programming, trying to help others do this. Having these partners in construction and this science in construction is very important to the ecosystem. They have some of the thought leaders that will be here that will help enlighten others in the area.
TThe impression I get walking across the room is like WeWork for life sciences startups.
I think it's very different from WeWork. At WeWork, even though you share a space, it's a very isolated workflow where it's pretty much the opposite. Brew on 2 [the coffee shop on the second floor], this is where our goal is to bring people together every morning so they can share ideas: “What did you learn last year? What is the most important lesson you learned that will help you innovate better and faster?' Please share this with the community in a 5-10 minute snippet so I can help others. Because we don't want an isolated workflow.
This building brings together opinion leaders to share knowledge. We have this flexible real estate option with an overlapping schedule that includes random conversations in the elevator, hallway, or shared apartments. When it comes to programming, people have a reason and a topic, common interests, and a need to talk.—Chere WeWork is "together for affordable real estate and shared services." At least that's my understanding of WeWork.
Specifically, we try to make this relationship constructive rather than transactional. WeWork has very short-term leases: months. We avoid that and work very hard to build relationships and keep people here longer.
In a way, WeWork is Live/Work. This is where people live, work, play and learn. This is a mission that has a strong focus on advancing healthcare.
What are the competitive advantages of this area over Boston or San Francisco?
Boston and San Francisco have worked very, very hard. There are so many new possibilities here, new ways of thinking and innovative ways, and we can almost rethink how the model is made. Whereas Boston and San Francisco are really stuck and not interested in doing things in a new way.
I also think that New York has a lot of different types of technology here that don't exist there. We also have the financial district here. While we don't have biotech-focused venture capital, we do have Wall Street right here, which means we have very different dollars when companies are ready to go public.
And I also think that New York, in a very special way, produces a lot of digital biotech companies that these other regions don't. We blended in because we're in a very small area, with Silicon Alley right behind it. There are a lot of great companies coming out of New York and you don't see that in other areas.
Because here? Why this building? And Deerfield actually bought that building, which suggests a level of commitment you wouldn't have if you were just renting the space.
We are engaged. That is sure.
Location was the #1 priority. Central location is incredibly important to us. When management teams do a road show, they don't go to Long Island City. They should be located in the center. When it comes to Wall Street, these companies follow a very strict schedule: They won't back down for an hour. So it was extremely important to have a central location for all the academic institutions so that we can bring together all the different thought leaders.
The goal is to make this building the focal point where all of New York City comes together. It would be very difficult to gather all the people we love if we were in a different part of the city. Even two ways would be incredibly difficult.
The facility that comes to mind when it comes to life sciences in New York is the Alexandria Center [for Life Science], which is not far from it. How do you see this interaction with them?
Downtown Alexandria is great. They have many wonderful benefits.
We think differently about it than the Alexandria Center. It is a wonderful proposition for companies interested in running their own independent laboratory facilities. It's more about collaborating, coming together and working than being part of a community and part of an ecosystem and learning and sharing together. It's more about being part of a shared experience, talking to people in elevators and being part of the schedule. For this you need to be in the center.
345 Park Avenue South is relocating; it is an older building.
It is no longer an old building. There is nothing old in this building, except maybe the concrete on the floor, which is fine.
Each window is new. The air intake system is completely new. The electrics are new. It is a new building.
The air treatment in this building exceeds any COVID air treatment requirements that have arisen in the City. Our system that we put in place was developed even before the COVID standards came out. Six air changes per hour; Usually I think it's two or three for a typical office building. We have capacity for up to six. And we have a filter system with three filters. We make every floor lab-ready.
We don't know where the health care system is going and we want to make sure that this building can handle anything in the future. Drug development and the digital wave are merging very quickly and we want to make sure the building can handle that.
How much is spent to allow the healing of the building?
The figures that do exist are $635 million [which includes both the initial cost and the engineering for the move].
A lab costs over $350 per square foot to build. And that doesn't include the main numbers. That doesn't include air treatment or anything like that.
Your job description states that you are responsible for "activating the ecosystem." What does that mean?
Work through the entire build timeline – understand what everyone involved in the healthcare ecosystem needs and build on that. We are starting slowly, ramping into next year for the build plan.
We currently offer a lecture series every Wednesday from 3:30 p.m. m. to 4:30 p.m. m. And we're going to increase that every day by figuring out what those talks should be, who our audience is, what the audience wants to hear, finding the experts, and making those talks available to the public. This is an example.
And you don't even have to come here. You can join us virtually.
What do you think COVID has taught your industry and how will it be applied in the future?
There are a million different ways to answer this question. On a very, very high level: COVID has taught our industry to work together and think together. It taught us to think faster, to think more flexibly, to innovate more efficiently. But overall, we had to work together to find a solution.
How does your experience in finance, communications and hotel management help you at Deerfield?
My job is to think outside the box and understand what people need and provide it, with an understanding of the healthcare ecosystem. I've been with Deerfield for almost 20 years, so I've been involved in understanding the healthcare ecosystem for many years. I came here with abilities that allowed me to think flexibly.
So, just kidding, could you fill these little bottles with vaccines?
No, but I've had enough doctor visits to know how they do it.
Karen Heidelberger of Deerfield: Life Sciences at 345 Park Avenue South? ›
Zhen Zeng - Director - Deerfield Management | LinkedIn.Who owns Deerfield Management Company? ›
Deerfield Management Company, L.P. is an employee owned hedge fund sponsor. The firm primarily provides its services to pooled investment vehicles.How much is Deerfield Management worth? ›
As of December 2022, the firm manages more than $13.5 billion in assets.Who is the founder of Deerfield? ›
Deerfield was founded in 1994 by Arnold Snider with $17 million in equity. 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.How big is the Deerfield Management Fund? ›
The fund has approximately $1.6 billion in committed capital. “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.Who is the CEO of Deerfield Capital? ›
James Flynn - Managing Partner & CEO @ Deerfield Capital Management - Crunchbase Person Profile.What is Deerfield revenue? ›
Deerfield Management revenue is $4.4M annually. After extensive research and analysis, Zippia's data science team found the following key financial metrics. Deerfield Management has 140 employees, and the revenue per employee ratio is $31,428. Deerfield Management peak revenue was $4.4M in 2022.