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Deerfield Management Bets Big On Company It Polished Ahead Of IPO, Nivalis Therapeutics Inc (NVLS)

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Following the initial public offering of Nivalis Therapeutics Inc (NASDAQ:NVLS) today, James E. Flynn‘s Deerfield Management, which was a stakeholder of the company back in its private days, now holds about 404,000 common shares, 2.29 million series 1 convertible preferred stock, and 789,400 series 2 convertible preferred stock of Nivalis Therapeutics Inc (NASDAQ:NVLS), according to a filing with the Securities and Exchange Commission.

Sergey Nivens/

Sergey Nivens/

Professional investors like Flynn spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, we also know that the returns of hedge funds on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic the best ideas of the best fund managers on your own? A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned more than 142% and beaten the market by more than 83 percentage points since the end of August 2012, and by 4.6 percentage points in the first quarter of this year (see the details).

Deerfield Management takes care of a wide variety of financing challenges that companies in the healthcare sector face. Be it funding an acquisition, the development and launch of a new product, improving balance sheet flexibility, or limiting equity dilution, Deerfield has enough experience in the sector to take care of these issues. Currently, the fund has more than $5 billion worth of assets under management and the market value of its public equity portfolio stood at $3.09 billion. A total of 45 new stakes were initiated by the fund during the first quarter including stakes in AbbVie Inc (NYSE:ABBV), and Spark Therapeutics Inc (NASDAQ:ONCE), which we’ll get to later.

Deerfield’s total stake in the company including all asset classes amounts to 10.06 million shares. Another prominent stockholder that has already filed on the clinical-stage pharmaceutical company that is developing a treatment for cystic fibrosis, is Julian Robertson’s Tiger Management, which disclosed having an indirect ownership of 650,915 shares of common stock earlier today. The current public offering is aiming to raise $77 million in gross proceeds for Nivalis Therapeutics Inc (NASDAQ:NVLS). The company’s only product candidate, N9115 is nearing completion of a phase 1b clinical trial.

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