CRISPR-based startups are rushing to IPO and don’t seem to care that we don’t know who officially owns CRISPR

CRISPR Therapeutics—a Swiss startup hoping to harness the gene-editing technology it’s named after to develop treatments for genetic illnesses like sickle-cell anemia and cystic fibrosis—went public today (Oct. 19), raising $56 million in its initial public offering. It’s the third CRISPR-related biotech to IPO this year despite a pitched battle over who owns the patent to the breakthrough technique.

The market for CRISPR (short for “clustered regularly interspaced short palindromic sequences”) is projected to be worth more than $5.5 billion by 2021, nearly double its current value, according to research firm MarketsandMarkets. The potential of the cheap, easy-to-use technology—which could do everything from creating a mushroom that doesn’t brown to curing cancer by cutting and pasting snippets of DNA—has companies rushing to develop new applications even though no one knows who will ultimately control it.

“It’s a race,” says Fabien Palazzoli, head of biotech intellectual property (IP) analytics for the consulting firm IPStudies. “It’s a race for the IPO, for the scientific results, for the FDA recommendation, for the IP.”

The patent war is primarily between the University of California, Berkeley and The Broad Institute of MIT and Harvard. A team at Berkeley first reported use of the CRISPR system to edit a bacterium’s genome in 2012. Seven months later, a lab at Broad published a study announcing its editing of cells from humans and other multicellular organisms. In April 2014, Broad won the CRISPR patents after requesting an expedited review of its application, despite filing more than six months after the Berkeley group. In January, the US Patent Office revealed that Berkeley filed a challenge to the Broad patents.

All three CRISPR-related companies to IPO so far have exclusive deals with one of the warring parties. The first to go public, in February, was Editas, which is developing therapies for conditions of the eyes, muscles, lungs, and liver. It’s licensed patents from The Broad Institute and is planning phase I clinical trials next year on a treatment for Leber congenital amaurosis 10, a genetic cause of blindness. Intellia, a company that IPO’d in May and is focused on curing liver disease, linked with Berkeley for its underlying intellectual property. CRISPR Therapeutics’ is also tied to the Berkeley team.

The drawn out patent war isn’t great for business. In its IPO filing with the SEC, CRISPR Therapeutics warns that it may need to obtain licenses to continue its research. If Broad retains the patent and decides not to give CRISPR Therapeutics the licenses to use their tech, the latter might have to stop development of some products altogether. That would be a windfall for Editas. If Berkeley comes out on top, the other two startups gain a huge advantage. Perhaps that’s why CRISPR Therapeutics’ IPO—four million shares at $14 each—fell significantly below the target the company laid out in a securities filing earlier this month: 4.7 million at a range of $15 – $17.

Bottom line: Investing in these companies probably means contributing to the intellectual property fray. STAT reports Editas has already spent nearly $16 million on the Broad Institute’s legal fees, and it could be years before there’s any resolution. It’s no surprise since at stake is not only the power to control CRISPR’s future, but also, for the scientists involved, an almost certain Nobel Prize.

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