Breaking: Hayman Capital Targets Shire in Next Pharma Battle

This evening, Hayman Capital through the entity "Coalition For Affordable Drugs" filed a petition for Inter Parties Review on a patent controlled by Shire PLC. Importantly, the patent in question supports Shire's very profitable drug  LIALDA, which according to Shire's most recent investor presentation generated $634 million in sales in 2014, up 20% year over year.

Shire has initiated infringement cases concerning Patent #6773720 on numerous occasions over the past few years against generics that target the same health conditions in which LIALDA is prescribed to treat.

Hayman Capital has been in the news over the past four months with its plans to target big pharma over patents. Here are a sample of a few stories:

  • http://www.reuters.com/article/2015/01/07/pharmaceuticals-haymancapital-idUSL3N0UM42O20150107
  • http://www.businessinsider.com/kyle-bass-files-first-ipr-petition-2015-2
  • http://www.ft.com/cms/s/0/a2a706a0-969c-11e4-922f-00144feabdc0.html
Sources indicate that Hayman has raised a dedicated fund for such effort.

To review the IPR petition, you can view it here: Hayman Targets Shire

I personally find this form of activism FASCINATING. The IPR process that Hayman is employing really is on the cutting edge of the intersection of law and finance. IPRs are a very new animal in the world of patent law and I think this is a tool many funds and activists will use down the line given the relatively low cost to file them - and I truly don't think pharma will be the sole target. Every industry really is at risk at this point.


Update: Hayman targeted a second patent tonight (7056886) owned by NPS Allelix. Shire announced the acquisition of NPSP in January (http://www.shire.com/shireplc/en/investors/irshirenews?id=1052).



hunter [at] distressed-debt-investing [dot] com

About Me

I have spent the majority of my career as a value investor. For the past 8 years, I have worked on the buy side as a distressed debt and high yield investor.