After two recent setbacks for his Coalition for Affordable Drugs, Kyle Bass may be ready to call it quits on his patent-challenge experiment.
“In the end, lobbying and special interests pay,” Bass wrote of his roadblocks in a defeatist-sounding email to Bloomberg. “Medicare and U.S. consumers pay the ultimate price for the evergreening of bad patents by the pharma cabal.”
Bass, manager of hedge fund Hayman Capital Management, had been using the U.S. Patent and Trademark Office’s inter partes review system to go toe-to-toe with pharma—and make money in the process. Over more than two years, he attacked the IP shields of drugmakers he’d shorted—including Celgene, Shire, Biogen, Acorda and others—ringing up profits when his moves spooked investors and sent shares downward.
From here on out, hedge funds “will have to really think about … what they want to put forward in a challenge like this,” Paul Hastings LLP’s Naveen Modi, who co-led Acorda’s legal effort, said in an interview last month, adding that he hopes Bass’ defeats discourage “entities like Hayman Capital from filing challenges like the ones that were filed here.”
They likely will be, given that Bass' strategy didn’t really work. The USPTO’s Patent Trial and Appeal Board (PTAB) tossed patents on just three of the 14 meds Bass targeted, and none of those three led to lower drug prices, Bloomberg notes.
While Bass had some additional success at scoring yearlong patent reviews, the PTAB ultimately sided with drugmakers in those cases. Within the last month or so alone, Biogen walked away with a Tecfidera win and the PTAB declined to invalidate patents on Acorda’s Ampyra—though a court took care of that for the New York drugmaker shortly thereafter.
Now, Bass seems to be throwing in the towel. While he still has one case filed under his own name pending with the PTAB, his coalition hasn’t filed a new case in 18 months, and he’s closed the fund overseeing it, the news service says.
It’s welcome news for drugmakers, which balked at the prospect of additional patent pressure. Celgene, in particular, slammed Bass and his fund for wanting to “line their own pockets at the expense of public pharmaceutical companies and their shareholders,” the company said in 2015.