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`Shire Drugs Are Next Targets Of Hedge Fund's AIA
`Reviews
`
`By Ryan Davis
`
`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 the U.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 generic-drug 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 6,773,720 covering 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.
`
`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.
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`CELGENE EXHIBIT 2049
`Coalition for Affordable Drugs VI LLC (Petitioner) v. Celgene Corporation (Patent Owner)
`Case IPR2015-01096
`
`
`
`Shire Drugs Are Nexee t Targets Of Hedge Fund's AIA Revee iewee s - Lawaa 360
`
`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 Shire acquired 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 IPR2015-
`00988; and Coalition for Affordable Drugs II LLC v. NPS Pharmaceuticals Inc., case number
`IPR2015-00990; both before the Patent Trial and Appeal Board.
`
`--Editing by Katherine Rautenberg.
`
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