In 1976 Herb Boyer, a University of California, San Francisco professor, and Robert Swanson, an unemployed venture capitalist, founded Genentech. The company was built on the recombinant DNA technology that Boyer and Stanley Cohen had developed to laboriously cut and splice DNA. Genentech’s success is taken for granted today, but in 1976 it was far from pre-ordained and it owed as much to the hard-nosed business and IP strategies that Boyer and Swanson adopted as it did to the science. But succeed it did, and as a result Genentech became the model for every biotechnology start-up ever since.
Eight years after Genentech was formed, and three years after its $35 million initial public offering made Boyer a multimillionaire, Kary Mullis (author of Dancing Naked in the Mindfield) was surfing when he had the idea for the polymerase chain reaction. This revolutionised genetic engineering, allowing scalable cloning and turning molecular biology from a science project into a real business.
From these two seminal events, hundreds of millions of dollars of investment capital have flowed and billions of dollars of shareholder value have been created.
The next great leap forward in molecular biology came with the biological equivalent of the Apollo moon landings, an audacious undertaking to sequence the human genome. J Craig Venter and Francis Collins raced head to head and passed the finish line together, publishing their results in 2001 in Nature and Science, respectively. The human genome project gave momentum to the industrialisation of DNA sequencing, spurring innovation, compressing timelines and driving down the costs of DNA sequencing to affordable levels.
Eleven years have passed since the human genome project reached the finish line and now we stand at another milestone in the story of life science – which is also a story of the creation, commercialisation and conflict around intellectual property.
In 2014 Jennifer Doudna and Emmanualle Charpentier were awarded a $3 million prize for their discovery of clustered regularly interspaced short palindromic repeats (CRISPR), which is a simple and powerful way to edit genes – in effect, a 'search and replace' function for genetic engineers. The power of CRISPR is extraordinary: it has already been used to reverse muscular dystrophy in living mammals and as a live editing tool for our genome it has the potential to be the most powerful medical discovery in history. CRISPR ushers in the advent of genetic microsurgery, giving molecular surgeons the ability to rewrite the genome and in doing so rehabilitate the idea of an entire industry – gene therapy.
Perhaps unsurprisingly for those who know the history of Genentech, the fighting has already started over who owns the IP rights to CRISPR, with Doudner and Charpentier already competing against each other and a third claimant, Feng Zhang, a researcher from the MIT-Harvard Broad Institute.
Genentech’s bloody track record in fighting to protect its intellectual property included wars with Biogen/Monsanto/Burroughs Wellcome/Sumitomo over TPA, with Lilly over HGH, with Amgen over Neupogen, with Chiron/Cetus over Herceptin and Bayer/Regeneron over Eylea. The commercialisation of CRISPR promises inventors and investors alike a similarly volatile path.
The combatants in the CRISPR battle are venture capital-backed companies Editas Medicine, CRISPR Therapeutics and Intellia Therapeutics. Zhang is the co-founder of Editas, Charpentier sold her intellectual property to CRISPR and Doudna’s company Caribou Biosciences was until recently associated with Intellia, and now seems to have joined forces with Editas.
With $43 million from Third Rock, Polaris and Flagship Ventures, Editas quickly secured an IP advantage, gaining a patent that covers the use of CRISPR in any species whose cells contain a nucleus (see “Broad Institute Gets Patent on Revolutionary Gene-Editing Method”). This meant that it had won the rights to use CRISPR in mice and men, or indeed in any living creature more complex than bacteria. US Patent 8697359 came as a shock to the industry through a combination of speed, profile and scope. It was fast-tracked in less than six months, stayed below the radar and claims that Zhang was the innovator who made the application of this technology in humans possible. Zhang’s assertion appears to be factually incorrect, since several scientific journal articles detail how other researchers used CRISPR in human cells prior to Zhang’s filing. In fact, one feature of CRISPR is that it is highly reproducible across species, and as a result the use of CRISPR in human cells is quite intuitively obvious.
The next battle in the CRISPR war has not yet ignited, but as the MIT-Harvard Broad Institute decides who and what to license the patent for, the question remains as to the quality of the intellectual property underpinning CRISPR. With venture capitalists holding their breath, the outcome could very well decide the future of the industry and a very significant royalty stream for the winning inventors.
This article first appeared in IAM magazine. For further information please visit www.iam-magazine.com.