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PubMed
US National Library of Medicine National Institutes of Health
Cell Mol Life Sci. 2005 Aug;62(16):1850-62.
The therapeutic potential of tumor necrosis factor for autoimmune disease: a mechanistically based hypothesis.
Kodama S1, Davis M, Faustman DL.
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Abstract

Excess levels of tumor necrosis factor-alpha (TNF-alpha) have been associated with certain autoimmune diseases. Under the rationale that elevated TNF-alpha levels are deleterious, several anti-TNF-alpha therapies are now available to block the action of TNF-alpha in patients with autoimmune diseases with a chronic inflammatory component to the destructive process. TNF-alpha antagonists have provided clinical benefit to many patients, but their use also is accompanied by new or aggravated forms of autoimmunity. Here we propose a mechanistically based hypothesis for the adverse events observed with TNF-alpha antagonists, and argue for the opposite therapeutic strategy: to boost or restore TNF-alpha activity as a treatment for some forms of autoimmunity. Activation defects in the transcription factor nuclear factor kappaB leave autoreactive T cells sensitive to TNF-alpha-induced apoptosis. Treatment with TNF-alpha, by destroying autoreactive T cells, appears to be a highly targeted strategy to interrupt the pathogenesis of type 1 diabetes, lupus and certain forms of autoimmunity.

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    15968469
    [PubMed - indexed for MEDLINE]

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Markets Main
Hedge-Fund Manager’s Next Frontier: Lawsuits
EJF Capital will lend to law firms pursuing injury class-action litigation
Emanuel Friedman says, ‘I love the intellectual challenge of the market, coming in every day after 50 years and realizing that I know virtually nothing.’ ENLARGE
Emanuel Friedman says, ‘I love the intellectual challenge of the market, coming in every day after 50 years and realizing that I know virtually nothing.’ Photo: Bloomberg News
By
Rob Copeland
March 9, 2015 6:38 p.m. ET
3 COMMENTS

Emanuel “Manny” Friedman is willing to do what other millionaire hedge-fund managers would rather avoid: dial for dollars.

Call into one of his quarterly portfolio updates as a noninvestor and a few minutes later you are apt to get a quick private call from Mr. Friedman himself offering up his personal line for follow-ups, according to people familiar with the firm. Ignore the pitch, and he will ring again the next time you call in and again the next.

With a series of unconventional tactics, Mr. Friedman has built a more than $6 billion hedge-fund firm and earned his investors, including clients of Blackstone Group LP, far-above-average returns.
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    Friedman on His Unusual Next Move

He has turned heads beyond the numbers. The past two years at a swanky Las Vegas hedge-fund conference, he wore a T-shirt featuring a butterfly, skull and crossbones and cheetah. The image, Mr. Friedman said, is a representation of the struggle between good and evil.
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The former co-founder of investment bank Friedman, Billings, Ramsey Group Inc. landed in the headlines recently for earning some of the biggest profits from the U.S. government’s bailout of small banks following the 2008 financial crisis.

But Mr. Friedman’s next act may be his most unorthodox: His Arlington, Va.-based EJF Capital LLC has raised hundreds of millions of dollars for a new litigation-finance arm that will lend to law firms pursuing class-action injury lawsuits, people familiar with the firm said. The firms will repay EJF at hefty interest rates as they earn fees from settlements and judgments.
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The suits include those related to transvaginal mesh, a medical treatment that props up organs protruding into the vagina, and Risperdal, a former top-selling Johnson & Johnson schizophrenia drug that causes the abnormal development of breasts in some men, people familiar with the firm said.

That is a new arena for a manager who made hundreds of millions of dollars after the financial crisis by buying mortgage securities, including risky ones his own firm described as “dirty pools,” and later became one of the biggest hedge-fund purchasers of the federal government’s investments in smaller U.S. banks, investors said. In some instances, EJF profited when it sold the shares back to the banks at a premium.

In January, a special inspector general for the U.S. bank bailout lamented that private investors could “come in quickly and flip and profit.” Three private investors scooped up nearly half of the taxpayer-backed investments auctioned by the government.

Mr. Friedman defended his interest in the government’s Troubled Asset Relief Program, known by its acronym TARP. “Investing is a two-way street,” he said in an emailed response to written questions. “There may be situations in which Treasury lost money, but the taxpayers, the government and the country came out ahead on these sales because so many banks became healthy.”

EJF’s main fund has earned an average annualized return of more than 17% after fees since inception in 2008, according to investor documents reviewed by The Wall Street Journal, compared with just under 6% for peers, according to research firm HFR.

Assets under management have roughly doubled over the past two years. Blackstone is the largest external investor, a person familiar with the situation said.

EJF is an unlikely turn for Mr. Friedman, who at age 68 is a decade or more past the usual retirement age for his peers. The son of a rabbi in Wilmington, N.C., Mr. Friedman used his bar mitzvah money for his first stock purchase in August 1961 and made a $60 profit. He taught history at a middle school to pay for night law-school classes at Georgetown University and then took a job as a stockbroker.

In 1989, he co-founded Friedman Billings, but his tenure ended amid an insider-trading scandal in 2005. The investment bank and Mr. Friedman, who was co-CEO and co-chairman at the time, settled the Securities and Exchange Commission’s civil charges and paid millions of dollars in penalties. He neither admitted nor denied wrongdoing.

Five months after resigning, Mr. Friedman launched his hedge-fund firm and seeded the new company partly with his own money. He now oversees about 70 employees on three continents.

“I love the intellectual challenge of the market, coming in every day after 50 years and realizing that I know virtually nothing,” Mr. Friedman said.

His latest decision to lend to law firms invites new complications. Several investors said they had passed on the litigation fund because it appeared far afield from EJF’s past ventures.

Mr. Friedman said the new fund is part of a larger effort to press forward in areas in which banks are retrenching from lending.

EJF has also amassed positions in companies that manage mortgages for investors and other lenders that could benefit from regulatory changes to clamp down on banks. In Europe, EJF is among hedge funds buying beaten-up bank and specialty finance assets such as distressed lenders, a popular move that has seen muted returns thus far amid the eurozone’s political woes.

EJF’s main fund is down about 1% in the first two months of this year, according to investor documents reviewed by the Journal, as Europe’s recovery has faltered.

Mr. Friedman compared the European lending environment to the Sahara and said the trade would ultimately prevail as the area rebounds.

Write to Rob Copeland at rob.copeland@wsj.com