Health and Healthcare

How Gene Editing Just Got Rocked by Major Patent Ruling

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The possibilities around gene editing are almost endless. Some of the goals and hopes around gene editing sound like they were pulled right out of a science fiction or futuristic film. Imagine if you are predisposed to a disease and the medical community can almost magically edit your genes and make the disease irrelevant. Now there has been a major development that will potentially impact the field of gene editing in a major way — and it is creating big moves in three stocks.

Editas Medicine, Inc. (NASDAQ: EDIT) announced on Wednesday that the U.S. Patent and Trademark Office has issued a favorable decision in the CRISPR interference between the University of California, the University of Vienna, Emmanuelle Charpentier and the Broad Institute, Inc.  If the initial reaction were to remain static, then Editas may have just won a major victory and two companies may have just been given a major blow.

The USPTO ruling was said to cover certain CRISPR-Cas9 patents which Editas exclusively licenses from Broad. According to the release, this USPTO granted Broad’s Motion for No Interference in Fact and that this ends the interference before the USPTO.

Whether or not there are going to be or can be appeals from other interests and other companies remains to be seen. This is far from the only patent case in the world of biotech and biohealth, and many patent cases often drag on for years before any resolution is known. An opposition statement has been made and some recent background data has been included here(see below).

Editas Medicine is the most widely known of the three main genome editing companies which are public. The company aims to treat patients with genetically-defined diseases by correcting their disease-causing genes. These include eye diseases, muscle diseases, blood diseases, lung diseases, liver diseases and cancers. This company has been public only about a year, and it had previously secured an investment north of $100 million from Bill Gates and other venture backers.

Shares of Editas Medicine were last seen trading up a whopping 28% at $24.10, versus a 52-week range of $12.43 to $43.99. It has a consensus analyst price target of $35.60. its market cap after the large pop is about $860 million.

Another would-be winner from this is Juno Therapeutics, Inc. (NASDAQ: JUNO). This is a much larger company worth $2.5 billion, and its shares were last seen trading up 4.4% at $23.54 on Wednesday afternoon. Juno reached a deal back in 2015 with Editas to help engineer the T cells of cancer patients into more efficient cancer killers. The terms of the deal back then were shown to pay Editas $25 million up front and then to add in as much as $22 million for research costs over a five year period. At the time, it was reported that Editas could up to around $230 million for each program.

Intellia Therapeutics Inc. (NASDAQ: NTLA) was last seen trading down 15% at $11.70 on more than 1.1 million shares before the close (about 5 times normal). Intellia has a 52-week range of $10.83 )hit this day) to $30.40. It’s listed consensus analyst price target was shown to be $33.60 and Intellia’s market cap after the drop was $420 million.

CRISPR Therapeutics AG (NASDAQ: CRSP) was last seen trading down almost 18% at $14.20 on 534,000 shares (about 7 times normal volume). CRISPR has a 52-week range of $11.64 (also seen this same day) to $25.00. CRISPR’s market cap after the drop was $565 million, and its consensus analyst target before the news was $23.00.

Katrine Bosley, President and Chief Executive Officer of Editas Medicine, said after the ruling:

We are pleased with the USPTO’s decision of ‘no interference in fact’ for the patents that have been granted to the Broad Institute for their innovative and fundamental work on CRISPR-Cas9 genome editing. This important decision affirms the inventiveness of the Broad’s work in translating the biology of the natural world into fundamental building blocks to create unprecedented medicines. At Editas Medicine, we are continuing to invest in this technology to build our business for the long-term and to create genome editing therapies for patients suffering from genetically-defined and genetically-treatable diseases.

CRISPR Therapeutics is based in Switzerland. CRISPR and Intellia Therapeutics, along with Caribou Biosciences and ERS Genomics, have now issued a formal response to Wednesday’s news.

Their take is that UC’s patent application covering the use of CRISPR/Cas9 genome editing technology with a single-guide RNA format in any non-cellular or cellular setting (including human and other eukaryotic cells) will be released from the interference absent an appeal, and may then be prosecuted to potential issuance. The company also noted that additional legal channels are available and that this board did not make a determination regarding which party in the interference is the first inventor of the use of the CRISPR/Cas9 genome editing technology in eukaryotes.

That formal response said:

The PTAB discontinued the current interference finding that the claim sets presented by the two parties were considered “patentably distinct” from each other because UC’s current claims are broader in scope in that they are not restricted to use in eukaryotic cells, whereas Broad’s claims are all limited to use in eukaryotic cells. As a result of the decision, UC’s broader case, which was previously considered allowable but for the interference, is now released from the interference and may be prosecuted to potential issuance by UC, while a new interference can be sought with respect to eukaryote claims, currently pending in a separate UC patent application once they are deemed allowable. Alternatively, UC could appeal the current decision, which is currently under consideration. In parallel cases, the United Kingdom’s Intellectual Property Office (UK IPO) granted patents to foundational CRISPR/Cas9 genome editing technology in any non-cellular or cellular setting (including in human cells) to UC.

The prosecution and enforcement of UC’s foundational intellectual property covering CRISPR/Cas9 Technology, such as this patent application, is governed by a global cross-consent and invention management agreement between the co-owners of the intellectual property – the Regents of the University of California, Emmanuelle Charpentier, and the University of Vienna – as well as their key licensees and sublicensees – CRISPR Therapeutics, ERS Genomics, Caribou Biosciences, and Intellia Therapeutics.

Back in December an agreement was reached among CRISPR, Intellia, Caribou and ERS Genomics. That announcement showed that the companies and their licensors entered into a global cross-consent and invention management agreement for the foundational intellectual property covering CRISPR/Cas9 gene editing technology. The parties to the agreement were said to include the co-owners of the intellectual property (the Regents of the University of California, Emmanuelle Charpentier, and the University of Vienna) as well as key licensees and sublicensees (CRISPR Therapeutics, ERS Genomics, Caribou Biosciences, and Intellia Therapeutics).

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