Revenge of the Bass: PTAB Institutes Multiple IPR’s Against Celgene Patents
Oct. 28, 2015 (Mimesis Law) — When it comes to patent news of interest to investors, Kyle Bass’ war against Big Pharma patents is the gift that keeps on giving. Perhaps no company has fought as hard against Bass as Celgene, which was the only pharma company to convince the PTAB to consider a motion for sanctions against Bass, based on the pre-filing litigation conduct of his compatriots. We wrote about that failed effort here. That was a significant win for Bass, and a setback for Celgene and other pharma companies looking for an “easy out” to Bass’ campaign.
For its part, Celgene has been caught up a bit in the crossfire regarding high drug prices, particularly with respect to its blockbuster Revlimid. Once the attempt to beat Bass on the sanctions motion failed, all that investors could do was wait to see whether the PTAB would institute the various petitions Bass had filed against a couple of Celgene patents regarding drug distribution for its products. In yet another victory over Big Pharma, Bass’ petitions were instituted yesterday, bringing Celgene into a group (with Shire) of companies who will be litigating over the next year in the PTAB to keep their patents alive.
While the decisions to institute that came down were not very interesting, other than to reiterate that the PTAB will not hold Bass’ objectives against him, and will give him a fair shake on the merits, the market reaction was very interesting. When the decision came out, there was a noticeable dip in Celgene’s share price, but the stock recovered over the course of the day. A big reason why was the “analyst defense” information put out, which focused on the the non-critical nature of the challenged patents to Revlimid exclusivity. While that is a valid point in light of the current state of affairs, it remains to be seen whether an emboldened Bass will now decide to challenge Celgene’s critical patents, or be content with the marketing benefit of showing he can take on one of pharma’s biggest and win a couple of early rounds. At minimum, yesterday’s decision supports the Bass narrative that there are some silly, “non-critical” patents being used by Big Pharma to pad the Orange Book and keep generic entry at bay.
Disclosures and Disclaimers:
Nothing in this material is intended to constitute legal or investment advice of any kind, nor is any of this material based on any non-public information of any kind. In addition to my work at Markman Advisors, I am also a name partner at a NYC-based intellectual property litigation boutique firm, Kroub Silbersher & Kolmykov PLLC (www.kskiplaw.com). Markman Advisors is affiliated with a Houston-based investment management firm, Perdix Capital Management, which may have existing or potential positions relating to situations discussed in this material. Markman Advisors also provides consulting services to buy-side investors, including hedge funds and family offices, that may also have or enter into positions relating to situations discussed in this material. Questions or comments can be directed to me at firstname.lastname@example.org. All suggestions are welcome.