Hedge fund investor Kyle Bass says he makes money from drugs the old fashioned way. He challenges their patents and then shorts the stock.
Biotech company Celgene Corp alleges that Bass and his Hayman Capital Management are playing dirty. It’s just not fair to make it look as if the patents are in jeopardy, reports Reuters. Bass says no dice; he and his Coalition for Affordable Drugs are lowering drug prices. Bass also pointed out that short-selling is perfectly legal and everyone, including the drug companies, are trying to get a profit at the end of the day. Writes Reuters:
The coalition’s motivations “do not change the social value of its activities,” he said in papers filed with the U.S. Patent and Trademark Office. “Poor quality patents enable pharmaceutical companies to maintain artificially high drug prices.” …The fact that the coalition’s motivations are not entirely altruistic, he said, is a “truthful irrelevancy.”
Celgene has asked the patent office to throw out Bass’ challenges as spurious. Bass has filed 18 patent reviews since February, including five against Celgene. Patent reviews began in 2012 to cut out poor quality patents, but hedge funds jumped on it as an investment opportunity.
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