Kyle Bass and his hedge funds, the Coalitions for Affordable Drugs LLC, have failed in several of their initial attempts to knock out drug patents. (See our prior article detailing the first seven hedge funds formed by Bass to challenge various pharmaceutic companies.) In two decisions handed down late last month, the Patent Trial and Appeal Board (PTAB) of the US Patent Office refused to initiate trials on two petitions filed by Bass to challenge two patents on Acorda Therapeutics Inc.’s multiple sclerosis drug Ampyra. Then on September 2, 2015 another one of the Bass Funds, the Coalition for Affordable Drugs (Series V), was also dealt a setback in its effort to invalidate Biogen’s patents on another multiple sclerosis drug, Tecfidera.

However, in each instance, the PTAB reached decisions on the merits of the hedge fund’s petitions. The fact that the PTAB considered the petitions and did not exercise its discretion to reject them outright based on the fund’s primary goal of depressing stock prices, was all the encouragement Bass needed.   During the last week in August and the first week in September, the Bass funds filed nine more challenges to pharmaceutical patents, bringing the total number to 32 invalidity petitions by eleven different funds.

In the case of the initial challenges to Accorda’s patents, the PTAB found that the Bass fund had failed to prove that two posters presented at a conference were “printed publications” due to insufficient evidence on how long the posters were presented, on the expertise of those who may have seen the posters, or the likelihood that one could have copied the poster material. The Board concluded, “we are not persuaded that petitioner has made a threshold showing that the posters were sufficiently publicly accessible to qualify as a ‘printed publication.’”

Despite this holding, the Bass fund has apparently decided to “double down” on the Acorda bet, filing another petition against each of the previously challenged Acorda patents on September 2nd as well as new petitions against two other Acorda patents covering the Ampyra drug on September 3rd.

In the Biogen challenge, the PTAB found that the challenger’s reliance on a paper describing a pilot study was not enough. “The nature of the pilot study is not apparent. Petitioner has not established the precise nature of the study and whether researchers were determining a therapeutically effective amount. The Pilot Study is not a description that DMF is useful for treating MS; rather, at best it is a “hope” that DMF will turn out to be useful for treating MS. A hope may or may not come true and does not establish that DMF is useful for treating MS.”

This challenge may have been decided in Biogen’s favor but the company is also not yet out of the woods. The Coalition (Series V) fund has another pending petition against a second Biogen patent on its Tecfidera product that has not yet been decided.

The latest pharmaceutical companies to be targeted by the Bass funds are Aegerion Pharmaceuticals and its licensor, University of Pennsylvania (Coalition Series VIII fund); Bristol Myers Squibb (Coalition Series IX fund); and Anacor Pharma (Coalition Series X fund); and Insys Pharma (Coalition Series XI fund) – and it is very unlikely that we have seen the last of the Coalition petitions.