Within a few years of the breakthrough discovery that Crispr could be adapted to edit DNA, scientists were already using it to do everything from improve crops to cure genetic diseases in mice, and they were reporting extraordinary results.
Crispr’s rapid adoption made it obvious that owning the rights to this technology would be extremely valuable.
But who owned Crispr? It wasn’t clear. In June 2012, a team led by University of California-Berkeley’s Jennifer Doudna had published the first paper describing how to turn Crispr into a DNA-editing device. Berkeley and Doudna quickly applied for a patent on it. Then, in 2013, the Broad Institute’s Feng Zhang published a paper showing how to use Crispr to edit mammalian cells, and applied for a patent on that.
So in 2014, University of California-Berkeley (UCB) sued, arguing that its patent already covered uses of Crispr in mammals and other higher organisms, and the Mother of All Patent Battles began, with the Broad (insider tip: say brode, not brawd) ultimately spending tens of millions of dollars to defend its patent. The question was: Had Feng Zhang invented something new, or was it obviously implied from Doudna’s work?
Its answer would decide how one of the largest scientific breakthroughs of the century could be applied to industry, and who would stand to make billions in profits.
By the time of the lawsuit, each university had already spun off companies with what it claimed were exclusive rights to use and license Crispr, and dozens of companies had licensed those rights. In agriculture, for example, Monsanto licensed the Broad’s patent while DuPont licensed UCB’s.
For human therapeutics, UCB licenses went to Intellia Therapeutics and Crispr Therapeutics, while the Broad granted an exclusive license to Editas Medicine. All three companies launched in 2013 or 2014, had very successful IPOs, and quickly soared to billion-dollar market capitalizations as Crispr fever took hold. Three Crispr stocks, three unicorns.
You couldn’t ask for a more volatile investment situation than three companies that may hold the future of medicine in their hands, have no proof that future is ever going to come, and are engaged in a massive legal battle to see who holds the rights to that future. That has resulted in a wild ride for shareholders.
By January 2017, all three of the companies’ stocks had tanked as investors’ initial enthusiasm turned to concerns over the cloudy future of the companies. Then, on Feb. 15, 2017, the US Patent Trial and Appeal Board ruled in favor of the Broad Institute, giving it the patent for using Crispr in higher life forms (plants, animals, people).
Immediately following the decision, shares of Editas Medicine (the Broad’s surrogate) jumped 30%, while those of Crispr Therapeutics and Intellia sank.
Editas gained $265 million in value, while Intellia and Crispr Therapeutics lost a combined $285 million. Jacob Sherkow, a professor at New York Law School, argues that this is a pretty good indication of what the market thinks an exclusive Crispr license is worth (at least for an unproven technology).
But since then things have gotten more complicated, and even more volatile. A May 2017 paper showing that Crispr caused many more accidental mutations than had been realized was enough to drive all three stocks to near all-time lows. Then all three recovered as researchers explained that the mutations issue was under control. Then they lost a collective half-billion dollars on Jan. 5, 2018 with the publication of another paper announcing that the human immune system might block Crispr.
By mid-2018 the three companies had gained all this back and more, doubling and tripling in value. There were early indications that Crispr therapies did work well in people, major partnerships with Bio behemoths like Novartis and Vertex were sealed, the paths to clinical trials looked clear, and investors seemed to have decided that if any of the companies came up with a home run, they’d be able to work out the licensing. But then—in one more loop of the roller coaster—most of those gains evaporated in the biotech bloodbath of late 2018. Now 2019 is shaping up to be the year we find out if Crispr is really going to defeat a lot of diseases, and these companies’ fates are in the balance.
The patent situation is still a mess. Intellia, Crispr Therapeutics, Caribou Biosciences, and any other company that licensed its Crispr technology from UC Berkeley or its surrogates will have to get permission from the Broad Institute to continue using it on higher life forms—at least in the United States. In Europe, it looks like UCB will prevail. And China has yet to rule. Meanwhile, hundreds of new Crispr patents derived from these original inventions have been filed, further complicating the landscape, and potentially putting a chilling effect on smaller companies wishing to bring their Crispr products to market.
Crispr is looking more and more like a core technology for the future of food, fuel, materials, and medicine. Hopefully, that future won’t be held back by murky legal waters.
The Broad has suggested a patent pool, where all relevant Crispr patents would be combined into a one-stop-shop for any company needing a license (most of the proceeds, doubtless, going to the Broad). It has also granted all academic institutions and noncommercial enterprises free access to Crispr, ensuring that basic research goes forward (and also ensuring that most researchers get used to using the Broad’s version of Crispr).
And yet it’s possible that neither the Broad nor UCB, nor their surrogate companies, will make much money from Crispr. That’s because their patents cover only the first version of Crispr to be discovered, Crispr-Cas9, which used an enzyme called Cas9 to do the DNA cutting. At the time, no one knew there were other Crispr enzymes that could edit DNA, but now dozens of them have been discovered, and there may be many more. In the future, any company needing to license Crispr for its product may have options. In other words, it may be a buyer’s market, priced accordingly.
One startup, Inscripta, recently made its Crispr enzyme, MAD7, free for all R&D uses, including commercial ones. (They’ll take a royalty on any final product.) That significantly lowers the barriers to entry; any company wanting to avoid the patent fight can just use MAD7 and not pay a dime until it has a product on the market. While that may prevent a handful of entities from making a fortune off of Crispr, it could be a victory for science and human wellbeing.