Many people familiar with matters related to hedge funds are familiar with the name Kyle Bass. He is the guy that managed to make a fortune in a serious financial crisis with his Hayman Capital Management firm when he made a bet against the subprime mortgage crisis of 2008. Those who know him also know that he is not media shy but rather, an individual who is not afraid to make news whether for the right or wrong reasons. Currently, he is wagering against pharmaceutical companies that he believes exploit the patent system so as to always keep their drug prices and profits high.
In this war, he is not alone. He is with a very formidable colleague Eric Spangenberg. On his side, Eric became reviled in the Silicon Valley because every other time, he could bring lawsuits technology companies that he contended had done patent infringement. The two guys have a coalition they have formed called the Coalition for Affordable Drugs. Using the coalition, they look for drug patents that they consider weak and request that they get reviewed by the Patent and Trademark Office.
By November 2015, the coalition had managed to file not less than 33 requests for patent reviews that targetted around 13 drugs from not less than a dozen companies. At the same time, the duo had branded themselves as shares short-sellers in companies they thought are vulnerable. They are also known to buy stocks in companies they deem well performing and that have true innovation.
Many drug companies have cried foul and have criticised the coalition for trying to make a profit from challenges that may put a company’s shares and revenue under pressure. In many instances, when drugs come off patent, they can easily be sold by generic drug makers and make their prices rise abruptly.
Bass is not strange to controversy. When he made his debut as a hedge fund manager, many viewed him as a genius who could do nothing wrong. However, time has not been kind to him at all. If anything, it has been very unkind to his public professional image. In the very recent past, he has been moving from one television station to another giving his analysis on the financial markets that have all gone opposite to his predictions.
On top of that, he has made very bad friends for his image. One very good friend is Argentinian Cristina Kirchner who has made very bad economic mistakes that have made her people suffer. On every opportunity he gets, he has been publicly defending her actions even when knowing very well that he is supposed to do the opposite. Currently, Kyle is synonymous to a desperate gambler who wishes that the current gamble is the one that will save them from being poor.