Short Activist Strategy? Coalition for Affordable Drugs Targets Drugmakers

Authored by Michelle Carniaux and Michael E. Sander

On Tuesday, the Coalition for Affordable Drugs LLC (“CFAD”) filed its first IPR petition against a patent owned by Acorda Therapeutics. See IPR2015-00720. In its petition, CFAD, a wholly owned subsidiary of Hayman Credes Master Fund, LP, challenges the validity of claims to a method of improving walking in a human multiple sclerosis patients.

According to the press, Kyle Bass, the founder of Hayman Capital, publicly announced his intention to go “activist” against the U.S. pharmaceutical industry and its patents, calling it a “short activist strategy.” Investors interested in taking short positions in pharmaceutical stocks may now be watching CFAD’s activities in the PTAB. Acorda Therapeutic’s shares already fell 5%. And, “[t]he beautiful thing is this will lower drug prices for everyone.” Id.

Sidenote: In its IPR petition, CFAD identified patent monetization firm IP Navigation Group as a Real Party in Interest. IPRs make strange bed-fellows.