NEW YORK, July 29 (Reuters) - Celgene Corp, one of the world’s largest biotechnology companies, has accused U.S. hedge fund manager Kyle Bass of attempting to profit from his attempts to wipe out several major drug patents through his Coalition for Affordable Drugs.
The company asked the U.S. Patent and Trademark Office on Tuesday to sanction Bass and others behind the group by throwing out its challenges to Celgene’s patents.
The industry is watching the sanctions attempt closely because it could doom Bass’ much-publicized effort to kill what he calls undeserving patents and to lower drug prices.
Celgene said Bass’ real motive was to make money short-selling pharmaceutical shares that drop when a patent review is filed.
Bass and his partners want “to line their own pockets at the expense of public pharmaceutical companies and their shareholders,” Celgene said in legal papers.
Neither Bass nor a spokeswoman for his $2 billion Dallas-based Hayman Capital Management was immediately available for comment on Wednesday.
In February, Bass began to file reviews to eliminate drug patents through a procedure called inter partes review. Since then, the coalition has filed 16 of them, including five against Celgene.
Drug companies are worried because the reviews, which began in 2012 as part of the America Invents Act, are cancelling patents at a high rate. They have lobbied Congress to prevent hedge funds from launching reviews.
Bass has said big companies were improperly extending patent protection in questionable ways, such as changing dosage or packaging, to keep drug prices high.
But New Jersey-based Celgene said Bass was not trying to help the public by lowering prices, citing media reports of his short-selling strategy. It said his partner was Erich Spangenberg, whom the company called a “patent troll” and had already threatened to file reviews on Celgene’s patents in 2014.
Bass’ first review, on Feb. 10 against an Acorda Therapeutics patent on the Ampyra multiple sclerosis drug, led to a nearly 10 percent drop in the company’s stock price.
Celgene’s patents cover methods to ensure that thalidomide and related cancer drugs, which can cause severe birth defects, are only given to approved patients who are not pregnant.
Bass’ coalition asked the patent office to initiate a review, saying the methods were obvious and did not merit legal protection in the first place. (Reporting by Andrew Chung; Editing by Lisa Von Ahn)