Hedge Fund Manager Picks Acorda Therapeutics as His First Victim Against the Pharmaceutical Industry and Its "BS" Patents
February 11, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
A hedge fund manager who has been vocal about the pharmaceutical industry's “BS patents” has started to raise money for a dedicated fund that will start targeting biopharma companies, with his first salvo being an official filing with the US Patent and Trademark Office challenging Acorda Therapeutics' patent of multiple sclerosis drug Ampyra. Actavis plc
Business Insider first reported the news Tuesday, which had initially pushed down shares of Accorda almost 10 percent, a loss they have since regained in morning trading Wednesday.
Kyle Bass, the founder of Hayman Capital, filed the inter partes review (IPR) petition with the patent regulator a month after telling attendees at a conference in Denmark that he intends to go after pharmaceuticals as part of his “short activist strategy.”
If Bass is successful in having Accorda’s patent overturned for the MS drug, which helps patients become ambulatory again, the money it could lose is substantial.
During its third quarter earnings last year, Accorda said the bulk of net product revenues for the company came from Ampyra, which generated $96.4 million that quarter, 24 percent leap from the year-ago period. Overall, Ampyra revenues improved 10.3 percent on a sequential basis, and the drug’s popularity outside of the U.S. jumped 25 percent from the year-ago period to $2.5 million.
Part of Bass’s “war on pharma” will include the new fund and a collection of healthcare specialists poring over which companies will make the best targets
"We'll have a separate pharmacy vehicle. We've dedicated half of our resources over the past six months to this," Bass said at Skagen New Year's Conference in Copenhagen, when he gave a presentation titled "The U.S. Has a Drug Problem."
Bass said during the conference that he was planning to use the IPR petition tactic to go after pharmaceutical patents, because drugmakers can no longer rely on the “pay to delay” strategy they’ve long relied on for consistent profits over a drug’s patent lifetime.
Part of that push is a desire to lower drug prices, said the Texan, but it could also be a significant money maker for Bass, whose shorting strategy only makes money if companies fail. "This will change the way pharma companies [manage] their BS patents," Bass said. "The beautiful thing is this will lower drug prices for everyone."
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