Financier’s Short-and-Petition Strategy: An Update

Authored by Maria Luisa Palmese and Eric Paul Greenwald

We write to update our April 29th post regarding the stock price of pharma companies targeted by Kyle Bass’ Coalition for Affordable Drugs LLC’s (“CFAD”) inter partes review (IPR) petitions. According to Bass, the generation of returns for his hedge fund investors through short selling the stock of his IPR targets is the primary driver of his IPR petition strategy. Now that several of his petitions have been ruled on, let’s see how his “big short” strategy has played out. As of today, half of the fourteen petitions mentioned in our first post have been granted (i.e., the PTAB has instituted an IPR), and the other half have been denied. Of the seven successful petitions, four were against Celgene Corp. and three against Shire PLC. No IPR proceedings have yet been concluded.

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