Celgene Patent on Revlimid to Be Reviewed on Bass Challenge

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Hedge-fund manager Kyle Bass has persuaded a federal agency that a Celgene Corp. patent on the blood cancer drug Revlimid may be invalid.

The U.S. Patent and Trademark Office on Tuesday said Bass’s Coalition for Affordable Drugs has a “reasonable likelihood” of success in his challenge to a patent that expires in 2018. A final decision in the case will come in about a year.

“This patent is another ridiculous example of evergreening by Celgene,” Bass said. “How is this patentable and how can the patent office possibly facilitate Celgene raising pricing on Revlimid from about $25,000 when first released to now over $180,000? Celgene uses ridiculous patents like this.”

Celgene pointed out the case isn’t over.

The decision by the Patent Trial and Appeal Board is “one step in a process that will now continue over the next year,” said Greg Geissman, a spokesman for the company. “We remain confident in the strength of our patent estate, and we plan to defend our intellectual property vigorously.”

Bass, who runs the Hayman Capital Management hedge fund, has raised the ire of the drug industry by seeking to invalidate patents on medicines. He’s had mixed results so far: the agency has agreed to review patents on two Shire Plc drugs, but rejected petitions regarding other medicines by Biogen Inc. and AbbVie Inc.

Revlimid is based on a variation of thalidomide, a drug that was pulled off the market in 1962 because it caused serious birth defects. The drug is available only under a restricted distribution program that requires patients, doctors and pharmacists to be registered to receive it.

Pregnancy Prevention

Bass said Celgene took a known drug and “made minor changes that have nothing to do with efficacy,” giving the company “an artificial monopoly courtesy of the U.S. patent office.”

The patent being challenged is for a program to ensure the drug isn’t given to pregnant women.

A three-judge panel of the Patent Trial and Appeal Board said there’s already a similar pregnancy-prevention program for women who use the acne drug Accutane, which may render the Celgene patent invalid. Based on the information presented, the board said, the patent just combines known steps of things like registering and identifying specific patients for a known purpose.

Celgene has other patents on Revlimid that run through 2028, so this case won’t affect Celgene’s value, said Mark Schoenebaum, an analyst with Evercore ISI.

Active Ingredients

The more important patent for Revlimid’s specific compound also has been challenged by Bass and a preliminary decision could come in November, Michael Yee, an analyst with RBC Capital marks, said in a note to clients. Since it covers the drug’s active ingredient, it is “generally believed to be much stronger than other methods patents,” Yee said.

Celgene fought to ensure none of its patents would be given a second look at the agency, where it’s easier to invalidate a patent than in district court. It accused Bass of abusing the process to manipulate stock prices for profit.

Bass responded that it doesn’t matter if he’s motivated by money; the goal of the reviews is to ensure the agency got it right the first time when issuing the patents. The agency on Sept. 25 declined to throw out his challenges. In a phrase it’s used even when rejecting some of his petitions, a panel said that “an economic motive for challenging a patent claim does not itself raise abuse of process issues.”

The case instituted is Coalition for Affordable Drugs VI v. Celgene Corp., IPR2015-01092, U.S. Patent and Trademark Office (Alexandria, Virginia).

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