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`Shire Drugs Are Next Targets Of Hedge Fund's AIA Reviews Law360
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`Shire Drugs Are Next Targets Of Hedge Fund's
`AIA Reviews
`
`By Ryan Davis
`
`Share us on:
`
`Law360, New York (April 2, 2015, 4:43 PM ET) An organization tied to hedge fund manager Kyle
`Bass, whose strategy of challenging drug patents in America Invents Act inter partes reviews has
`recently made headlines, added two Shire PLC drugs to its list of targets in new petitions filed
`Wednesday.
`
`The Coalition for Affordable Drugs, a wholly owned subsidiary of Bass' Hayman Credes Master Fund
`LP, filed petitions challenging patents covering Shire's drugs Lialda, which is used to treat ulcerative
`colitis, and Gattex, which is used to treat short bowel syndrome.
`
`Shire said in a statement that "we are aware of the two petitions that were filed, and will vigorously
`defend any proceedings that may be instituted at theU.S. Patent and Trademark Office. Shire is
`confident that the validity of our patents will be upheld."
`
`In February, the coalition filed an inter partes review petition challenging patents on Acorda
`Therapeutics Inc.'s multiple sclerosis drug Ampyra, after Bass said in a speech that he planned to use
`the AIA proceedings to challenge drug patents owned by several companies.
`
`Bass said that invalidating the patents would not only lower the price of drugs by opening the door for
`genericdrug competitors but also serve as a means for growing his fund. The fund has reportedly taken
`a short position on Acorda's stock and stands to gain if the stock price drops.
`
`In the petitions filed Wednesday, the coalition urged the Patent Trial and Appeal Board to find that patents
`covering both Lialda and Gattex are invalid.
`
`"For each asserted ground, petitioner can demonstrate where each limitation either exists in the prior art
`and/or is rendered obvious," it wrote in the Gattex petition.
`
`According to Shire's 2014 annual report, U.S. Patent Number 6,773,720covering Lialda expires in 2020.
`The drug had sales of $634 million in 2014, the report said. That was an increase of 20 percent from
`sales of $529 million in 2013, which the report attributed to higher prescription demand and a price
`increase.
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`Exhibit 2020 Page 001
`
`Pharmacyclics LLC - Ex. 2020
`Coalition for Affordable Drugs IV LLC v. Pharmacyclics LLC
`Case IPR2015-01076
`
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`7/30/2015
`Shire Drugs Are Next Targets Of Hedge Fund's AIA Reviews Law360
`Shire is engaged in ongoing litigation with companies planning to make generic versions of Lialda.
`
`In 2013, a district judge barred Actavis Inc. from launching a generic version of Lialda, ruling that it
`would infringe Shire's patent and that the patent was valid. The Federal Circuit reversed that ruling last
`year, finding that the lower court relied on an incorrect claim construction.
`
`However, the U.S. Supreme Court vacated that ruling in January and ordered the Federal Circuit to
`reconsider the case in light of a new standard for review of claim construction decisions that the high
`court had issued days earlier in a case known as Teva v. Sandoz. The case remains pending at the
`Federal Circuit.
`
`The coalition is also challenging U.S. Patent Number 7,056,886, which covers Gattex, the flagship drug
`of NPS Pharmaceuticals Inc., which Shireacquired for $5.2 billion in a deal that closed in February.
`According to NPS' most recent annual report in 2013, Gattex had annual sales of $31.8 million.
`
`At the close of trading on Thursday, Shire's stock price had dropped 2.5 percent to $226.90.
`
`The patents at issue are U.S. Patent Numbers 6,773,720 and 7,056,886.
`
`The coalition is represented in the Gattex case by Jeffrey Blake, Matthew Fedowitz, Katherine M.
`Kowalchyk and Brent E. Routman of Merchant & Gould PC. It is represented in the Lialda case by Sarah
`Spires, Ki O, Parvathi Kota and Paul Skiermont of Skiermont Puckett LLP.
`
`Counsel for Shire and NPS was not immediately available.
`
`The cases are Coalition for Affordable Drugs II LLC v. Shire Inc., case number IPR201500988; and
`Coalition for Affordable Drugs II LLC v. NPS Pharmaceuticals Inc., case number IPR201500990; both
`before the Patent Trial and Appeal Board.
`
`Editing by Katherine Rautenberg
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`Exhibit 2020 Page 002
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