March 31, 2017

“Hedge Fund Drug Patent Challenges In Doubt After Bass’ Test,” Law360, March 31, 2017

Hedge fund manager Kyle Bass’ controversial campaign against drug patents appears all but over, and despite some victories at the Patent Trial and Appeal Board, a lack of apparent success betting against pharmaceutical companies’ stock has raised doubts about whether similar attacks will continue.

In March, nXn Partners LLC — an analytics company led by Bass’ colleague, Erich Spangenberg — issued a final report analyzing the work of the Coalition for Affordable Drugs, a group created by the two men to spearhead the effort to take down drug patents they saw as weak or abusive.

The final result: the Coalition for Affordable Drugs, or CFAD, filed 34 petitions challenging the validity of 28 patents in America Invents Act reviews. At least some challenged claims were invalidated in nine of those cases. The PTAB declined to review or upheld the patents’ claims most other times.

In the report, nXn touts the coalition’s overall success rate as “well beyond” the averages of other petitions filed at the PTAB during the same time frame. But outside observers said there is no indication the campaign was able to advance Bass’ ultimate goal: making drugs cheaper and lowering stock prices.

“It seems to be a complete failure to me,” said Bryan Wheelock, a partner at Harness Dickey & Pierce PLC.

Read full article.