Acorda Therapeutics Shares Surge
August 24 2015 - 8:50PM
Dow Jones News
A U.S. patent review board on Monday declined to review
petitions brought by hedge-fund manager Kyle Bass, who has sought
to employ an unusual trading strategy of challenging patents held
by pharmaceutical companies and profiting from declines in their
stock prices.
The U.S. Patent and Trademark Office's review board ruled
against Mr. Bass's challenge of two patents on Acorda Therapeutics
Inc.'s multiple sclerosis drug Ampyra. In written decisions posted
on its website on Monday, the board said the petitions hadn't shown
a reasonable likelihood they would prevail if granted a review.
A representative for Ms. Bass didn't immediately respond to a
request for comment.
Shares of Acorda rose 27.7% to $36.99 in after-hours trading on
Monday.
The patent challenges were filed by the Coalition for Affordable
Drug Prices, an organization created by Mr. Bass. The Coalition has
filed more than 20 challenges against pharmaceutical patents held
by companies including Celgene Corp., Biogen Inc., and Jazz
Pharmaceuticals, Inc., according to data on the patent office's
website. The Wall Street Journal reported in April that Mr. Bass
has pitched wealthy investors to invest in a dedicated fund that
would bet against, or short, shares of companies whose patents Mr.
Bass believes are weak.
Mr. Bass, head of Hayman Capital Management LP, is using a
process for challenging patents known as Inter Partes Review, or
IPR, that is a cheaper and faster option than trials in federal
courts. The IPR process, which was established in 2011 to fight
so-called patent trolls, has proved to be an effective way for
technology companies to invalidate patents they say are
spurious.
Use of IPR challenges against drug patents has raised concerns
in the pharmaceutical industry, which has lobbied Congress for
changes to the IPR process. The patent board's ruling Monday
against Mr. Bass, however, may signal that challenging
pharmaceutical patents through IPR won't be as easy as some
industry officials have feared, said Gerald Flattmann, lead outside
counsel for Acorda in its IPR proceedings with Mr. Bass.
"What we can glean from this is the patent office isn't going to
rubber stamp any such challenge and is going to look at them quite
critically," Mr. Flattmann, a partner with Paul Hastings in New
York, said in an interview.
Write to Joseph Walker at joseph.walker@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 24, 2015 20:35 ET (00:35 GMT)
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