Texan hedge fund manager J. Kyle Bass, the founder of Dallas-based Hayman Capital, gave back most of the $700 million he raised from investors for his big pharma short, the Financial Times reports.
The FT says Bass is returning money because, “the strategy has fallen apart in the face of legal setbacks and market turbulence.”
That doesn’t mean he’s surrendering though. He plans to keep fighting the pharma industry.
Since the beginning of 2015, Bass has been filing inter partes review petitions (IPRs) with the US Patent Trial and Appeal Board, part of the US Patent and Trademark Office, challenging the validity of certain drugmakers’ patents while also betting against the company’s stocks.
As part of his strategy, he formed the Coalition for Affordable Drugs. He even set up a separate investment vehicle at Hayman Capital.
His goal was to go after the drug companies he saw as the most egregious examples of evergreening their patents and thus causing the public to pay billion more in prescription drug prices. The idea is that if he’s successful in his fight, American consumers will save money on those prescriptions.
Some of his targets have included, Acorda Therapeutics, Biogen,Hoffman-La Roche, Bristol-Myers, Aegerion, Jazz Pharmaceuticals, Insys Therapeutics, Anacor Pharmaceuticals, Shire, Pozen, and Celgene.
To date, Bass had filed 37 IPRs with PTAB as part of his so-called “activist short strategy.” So far, 11 of those petitions have been tossed out before a trial could be held, the FT report noted. Seven of them have been accepted for trial, while the others are still pending.
Bass still has about $80 million left for the IPR challenges, so he’s not giving up on this fight.