ACOR Acorda Therapeutics Inc

Hedge-fund manager Kyle Bass says he'll persist in his campaign to invalidate what he calls weak pharmaceutical patents, despite being handed two early setbacks in recent weeks.

"I've spent years of my life working on this and my arguments are as good as can be," Mr. Bass said in an interview on Thursday. "I think I can win if they'll just hear the cases on the merits."

On Wednesday, a panel of judges employed by the U.S. Patent and Trademark Office declined to review Mr. Bass's challenge to Biogen Inc.'s multiple sclerosis pill Tecfidera patent. The ruling, which came ahead of schedule, followed a denial in August of Mr. Bass's challenges to Acorda Therapeutics Inc.'s drug Ampyra.

"Patent protection is critical to enabling biopharmaceutical companies to develop new therapies and advance science and medicine," Biogen Chief Executive George A. Scangos said in a statement on Wednesday following the patent board's decision.

Mr. Bass, the head of Hayman Capital Management L.P., re-filed two challenges against Acorda's Ampyra on Wednesday, which he said now include more documentation. He also filed two new challenges against other Ampyra patents.

"We're reviewing the petitions and will oppose the requests to institute the IPRs," an Acorda spokesman said. "If they are allowed to proceed, we will defend our patents vigorously."

Mr. Bass said he plans to file a motion to have the patent board reconsider his challenges against Tecfidera, though he said the chances of it being accepted are slim. Mr. Bass is also considering other options for challenging the Tecfidera patent.

Mr. Bass has undertaken an unusual investment strategy: using an administrative process known as Inter Partes Review, or IPR, to challenge drug companies' patents while betting against their shares.

"We invest in companies that we think have strong intellectual property and we invest against companies we think have weak intellectual property," Mr. Bass said.

Among the companies that Mr. Bass said he has taken long positions in—wagering their share prices will rise—are Endo International PLC, ProNAi Therapeutics Inc., Impax Laboratories Inc. and ZS Pharma Inc.

Pharmaceutical companies have accused Mr. Bass of abusing the patent procedure to further his investment strategy.

Mr. Bass said the patent board's decisions were inconsistent with patent law. He said the industry's criticism was behind what he called the politically motivated nature of the patent office's rulings.

"The standards we're being held to are completely different than others," Mr. Bass said. "They're running a kangaroo court," he said of patent-office officials.

The patent office declined to comment.

Jacob S. Sherkow, an associate professor at New York Law School, said he was puzzled by the patent office's reasoning behind its decision on Tecfidera on Wednesday, which he said contradicted legal precedent.

Mr. Bass's petition argued the Tecfidera patent was invalid because it was known before the patent was issued that the drug could be used to treat multiple sclerosis. His petition cited a published description of a pilot study that tested a class of drugs to which Tecfidera belongs as a treatment for MS. The patent board, in explaining why it had denied the challenge, said the pilot-study description didn't prove the drug worked against multiple sclerosis, but was at best a "hope" it would work.

Mr. Sherkow said determining the effectiveness of an invention is outside the patent judges' authority in evaluating IPR petitions and that for decades pilot studies have been considered permissible evidence in patent challenges. "I am shocked by the reasoning of the decision," he said.

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(END) Dow Jones Newswires

September 03, 2015 19:55 ET (23:55 GMT)

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