By Amy Dockser Marcus and Joe Palazzolo, September 22nd, 2016
Deals continue to be signed for gene-editing tool called Crispr-Cas9
Last month, Bayer AG opened the doors on a $335 million joint venture with Crispr Therapeutics to develop therapies using a new gene-editing tool. Later this year, rival Editas Medicine Inc. will move into larger digs as it, too, races ahead with a $200 million-plus effort to leverage the gene-editing tool into new drugs.
Companies working on this special technology have raised over $600 million since 2013 in venture capital and the public markets, researchers at Montana State University estimated in 2015. More deals continue to be signed, and this month Crispr Therapeutics said it plans to go public and wants to raise up to another $90 million.
The flurry belies the fact that the companies don’t actually know yet who owns the intellectual-property rights to the technology.
The system, known as Crispr-Cas9, is embroiled in a high-stakes patent dispute for control over what many scientists believe is a groundbreaking technology that serves as a kind of multipurpose molecular scissors that can cut DNA and make repairs and insert changes into genes. Crispr’s power and versatility, they argue, open the door to new therapies that could potentially correct often intractable genetic diseases.
There have been other gene-editing tools before, and scientists are working on additional ones. But part of the excitement over the Crispr-Cas9 system is that it is easier to use than previous gene-editing technology. It also can target more than one gene at the same time, making it more efficient.
The different Crispr companies are hoping to develop treatments for diseases like hemophilia, cystic fibrosis and muscular dystrophy, among others. Doctors are planning to test Crispr therapies in cancer. Some scientists are even exploring the application of Crispr to revive extinct species like the woolly mammoth or to modify organs in pigs so they might someday be transplanted into humans.
Science is always a fraught, risky enterprise, but even by those standards this current fight to control Crispr-Cas9 is messy.
Jennifer Doudna of the University of California, Berkeley and Emmanuelle Charpentier, then of the University of Vienna, applied in 2013 for a patent for using Crispr-Cas9 to edit genes. So did Feng Zhang, a scientist at the Broad Institute of MIT and Harvard, in Cambridge, Mass., a few months later. But his patent was granted first, in 2014.
The U.S. Patent and Trademark Office is currently hearing a challenge by the Berkeley-Vienna group, which says it invented the gene editor first and should get the rights to the technology.
This month it got even more complicated when ToolGen, a Seoul-based biotech, said it was awarded a patent for Crispr-Cas9 gene editing in Korea. Seokjoong Kim, research director at ToolGen, said the company is also pursuing a claim with the USPTO, though an examiner hasn’t yet deemed the claims patentable.
The ToolGen announcement “adds to the uncertainty” facing companies pursuing Crispr, says Brent Babcock, an Orange Country, Calif.-based partner at Knobbe, Martens, Olson & Bear LLP, and has to make investors wonder, “Who else may come out of the woodwork?”
Many players laying claim to the key patent have launched companies to pursue research and licensing, creating a thicket of licensing options for biotechs and institutions to consider, depending on how they want to use the technology.
Broad’s Dr. Zhang is a co-founder of Editas Medicine. Dr. Charpentier, now of the Max Planck Institute for Infection Biology in Berlin, is a co-founder of Crispr Therapeutics, and Dr. Doudna, who helped found and then left Editas, is a co-founder of Caribou Biosciences Inc. and Intellia Therapeutics Inc. And there is a welter of other startups with rights to various uses and other technologies related to Crispr.
Patent experts say companies must decide whether to choose a side from among these, perhaps license from more than one to hedge their bets, or just use the technology and seek a license only when necessary.
It is a key question facing many technology-driven businesses, says Elisabeth Evert, an intellectual-property lawyer at Dallas-based Hitchcock Evert, and “at the end of the day, each company will just have to determine their tolerance for risk.”
Companies that wait, or license from what turns out to be the losing side, may have to give up more equity or pay a massive fee for a license from the side it bet against. “Spite,” says Jacob S. Sherkow, an associate professor at New York Law School, who has followed the Crispr dispute, “is typically part of any intellectual-property strategy.”
Some legal experts said that with the rights in dispute, the risk of getting sued for patent infringement is low, and a company without cash for multiple licenses in the U.S. could be better off pushing ahead with its own research and waiting until the dispute is resolved.
At Fulcrum Therapeutics in Cambridge, Mass., which is developing therapies for diseases like Fragile X syndrome and a form of muscular dystrophy, CEO Robert Gould says its scientists didn’t want to wait. Fulcrum was launched earlier this year with $55 million in financing from Third Rock Ventures LLC, also a founding investor in Editas.
Fulcrum is working with Horizon Discovery Group, a contract-research organization that has licenses from various parties to use Crispr. Mr. Gould said any drugs that Fulcrum develops “will be the subject of our IP that we protect and it will be our discovery.”
A spokeswoman for Crispr Therapeutics says the company doesn’t comment on the patent dispute. Executives and spokesmen for the other companies licensing out Crispr rights expressed confidence in their intellectual property and the ability for drug discovery to move forward.