Patent challenger Bass wins IP reviews for Celgene, Shire meds

Kyle Bass

Chalk up a win for pharma patent challenger Kyle Bass. The U.S. Patent and Trademark Office (PTO) has agreed to institute trials for 6 of the drug patents he's challenged--and IP shields for Celgene's ($CELG) Revlimid and Shire's ($SHPG) Gattex are among them.

The PTO's Patent Trial and Appeal Board (PTAB) will now kick off formal reviews of the patents, Corporate Counsel reports, meaning its members believe Bass' challenges--filed through the inter partes review system--may have merit. And if that's what they ultimately decide, they'll invalidate the patents.

That would be bad news for the drugmakers, and Bass knows it. He's been shorting the stocks of companies he's going up against, profiting when news of his challenges spooks investors. But the way he sees it, that strategy is irrelevant; what's important is the good he's doing for society, he's stressed, arguing that "poor quality patents enable pharmaceutical companies to maintain artificially high drug prices and reap unjust monopoly profits paid for by consumers and taxpayers."

Pharma companies unsurprisingly don't quite feel the same, and Celgene in particular hasn't been shy about sharing its views on the matter. Bass and his partners want "to line their own pockets at the expense of public pharmaceutical companies and their shareholders," the biotech recently said in legal papers seen by Reuters.

But there may not be much they can do. Last month, the PTAB denied a request from Celgene to toss out his challenges to its patents, pointing out that short-selling is "legal and regulated" and that "profit is at the heart of nearly every patent."

"An economic motive for challenging a patent claim does not itself raise abuse of process issues," it said, as quoted by Reuters.

Meanwhile, Bass has now gotten more of his challenges past the formal review threshold than not, Corporate Counsel notes. While many considered his first--for Acorda Therapeutics' ($ACOR) Ampyra, a challenge that the board rejected--a bellwether decision, the PTAB has now initiated reviews for 7 patents, tossing out just 6 cases he brought to it.

One drug that escaped this week: Biogen's ($BIIB) Tecfidera. The board refused to look into a patent on the drug for at least the second time after first shutting Bass down over the MS med in September.

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Special Report: Top 10 best-selling cancer drugs of 2013 - Revlimid | Top 10 best-selling multiple sclerosis drugs of 2013 - Ampyra - Tecfidera

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