KYLE BASS: 'I'm not a quitter'

Texan hedge fund manager J. Kyle Bass isn't backing down in his big war against the pharmaceutical industry.

"I'm not a quitter," he told CNBC's David Faber.

Earlier this month, the Patent Trial and Appeal Board, part of the USPTO, denied another one of Bass' petitions to review a patent for a drug. This time it was for Tecfidera, a multiple sclerosis drug licensed by Biogen.

Bass told Business Insider at the time that it appeared to him that the USPTO and Michelle Lee are "running a kangaroo court."

Lee is the head of USPTO, and a former deputy general counsel for Google. Google played a role in lobbying for the America Invents Act to be passed, the law which permits pretty much anyone to file an inter-partes-review (IPR) challenging a patent.

Bass told CNBC that he thinks Lee "could be influencing the judges there and playing a political game and not allowing our challenges to get heard on the merits alone. They would like to have our challenges thrown out."

We reached out to Lee for comment. A spokesperson for the USPTO said they do not comment on PTAB cases.

Since the beginning of the year, Bass has been filing IPR petitions against numerous drugmakers' patents while also betting against their stocks. So far, Bass has filed 36 IPRs as part of his so-called "activist short strategy."

To do this, he formed the Coalition for Affordable Drugs. He even set up a separate investment vehicle at Hayman Capital.

He told CNBC that he is going to file IPRs on less than 1% of the drugs that exist.

"The ones that we are going after are the kind of egregious examples of evergreening, which end up costing the public at large tens of billions of dollars a year in prescription drug prices."

So far, the strategy isn't playing out in Bass' favor. He's had petitions for two drugs tossed out before a trial could be held.

Bass told CNBC that the two Acorda IPRs were thrown out on a "technicality" and that with the Biogen IPR the PTAB " just got it wrong." Bass has already refiled the Acorda IPRs and he's reviewing his options for Biogen's Tecfidera.

"In the end, we are going to fight this fight. We're well funded and we have all the time in the world the way that we have set this up. And we want our challenges heard on the merits."

"And if we win, drug prices get lowered for everyone. So it's a fun fight so far."