Not "The Donald" Goes Bass Fishing at the Boston Business Journal

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  • 09/03/2015
Well Kyle Bass does have some people in his corner.   It's Don Seiffert of the Boston Business Journal who says: "The fact that he (Bass) also planned to profit off the scheme by selling short the companies he planned to target, he has said, is incidental to his real goal of knocking down inflated drug prices."

When did taking a hedge fund manager at his word become the hallmark of business journalism??

How about if reporters wrote that "the fact that the Ayatollah also planned to use funds to finance terror, he has said,  is incidental to the real of achieving world peace."

As for objectivity, Seifert has been a critic of drug prices over the years, claiming that "The free market approach is no longer working to ensure price competitiveness through generic drugs."

That leaves either price controls, which Seifert supports or Kyle Bass wiping out biotech valuations by using a factless assault on the patents of such company.

I can see how price contols would reduce prices.  But how exactly does shorting biotech stocks reduce drug prices?   Why not challenge patents directly under Hatch-Waxman?   

Because the alternative process is, in the right hands, a process that rewards extortion.  

The Inter Party Review was designed by Congress to make it easier for a handful of tech companies to swat away frivilous challenges to their patents.  Instead, rather than fulfilling its original intent of weeding out weak patents, IPR’s and the Patent Trial and Appeals Board (PTAB) have become “patent death squads” as they strike down 77% of the patent claims under review.   The IPR process is being used to undermine confidence in the patent system. A recent article estimates the resulting cost to the U.S. economy as over $1 trillion."

As Peter noted in a recent WSJ op-ed Kyle Bass is leading the way in destroying confidence in patents.  As Barron's observed (Seiffert might want to tape this article on the wall above his computer to remind himself of what good reporting is) Bass teamed up with Erich Spangenberg, CEO of IPNav, to challenge what they argue are questionable patents held by pharmaceutical companies to stifle competition from the generic marketplace. (It’s worth noting that Bass’ new partner, Spangenberg, has been described as the world’s most notorious patent troll. IPNav says it has generated over half a billion dollars in licensing revenue in patent-infringement penalties for its clients, which include individual investors, corporations, and universities.)

Bass's greed (and Peter's article) has led to Congress closing this loophole and the board that does the reviews to tighten up it's requirements.  A while ago, Seffert predicted that the board's rejection of the  Bass attempt to invalidate  Acorda Therapeutics patent for it's drug, Ampyra was just a temporary setback.  

He wrote: "But according to Lana Gladstein, a partner in the Intellectual Property Department at Nutter McClennen & Fish, the ruling was very narrow, and baed on the fact that the supporting evidence Bass submitted was insufficient. It has no bearing on his attempts to knock out patents held by Biogen (Nasdaq: BIIB) for its top-selling drug, Tecfidera, nor by Shire (Nasdaq: SHPG) for its drug for short bowel syndrome, Gattex."  Or I guess his efforts to shake down Celgene or any other companies.  

Too bad for Seiffert, Bass has been 0 for whatever in this extortion racket.

Kyle Bass will soon have to find another way to make up for what might huge losses from his investment in oil stocks (pre-price decline) and GM..  
Perhaps he can take comfort in the fact that one journalist is in his corner and still regards anything -- no matter how sleazy or destructive -- that knocks down drug prices as a victory.  


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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