Friday, March 16, 2018
By Ashley J. Stevens, CLP, President of Focus IP Group, LLC
At the LES Annual Meeting in Chicago, I led a panel discussion on the commercialization aspects of the revolutionary gene editing technology known as CRISPR. It appears that, as well as revolutionizing research in life sciences in general and in the biotechnology industry in particular, it also may revolutionize how innovation is licensed from academia to industry in the life sciences. The other panelists were:
- Kristin Neuman, Executive Director of Bio Technology Licensing, MPEG LA, LLC
- Juliana Leung, Director, Strategic Alliances, The Broad Institute
- Maury Raycroft, Biotechnology Analyst, Jefferies, LLC
As the organizer of the panel, I started off the discussion pointing out that biotechnology was an industry built on basic discoveries in academic science:
- Monoclonal antibodies (mAb) by Kohler and Milstein at the MRC in Cambridge
- Genetic engineering by Cohen and Boyer at Stanford
The scientific revolution coincided with the Bayh-Dole Act, which allowed universities to patent and own inventions made with Federal funding, and the Diamond vs. Chakrabarty Supreme Court decision that made microorganisms patentable. (The U.K.'s failure to patent mAb's was a notable exception.)
Additional enabling technologies were needed to turn these basic discoveries into safe and effective drugs that could be manufactured economically, notably:
- Gene expression technologies in various cellular systems
- Techniques to generate mAb's that were not immunogenic
Many of these technologies were invented in academia, though some of the later mAb technologies were invented by companies. Drug developers obtained either non-exclusive or very narrowly-defined exclusive licenses to the technologies they needed from the individual universities and companies, usually under terms that included most favored nations clauses. Individual royalty rates were generally modest, three percent or lower, but particularly in the mAb space, total royalty burdens could be substantial. Although royalty rates were modest, the royalty bases were frequently enormous, so some institutions and companies generated enormous royalty income from these technologies—e.g., $3.9 billion for City of Hope Hospital in Los Angeles (which was essentially Genentech's CRO from 1976-78) and $3.7 billion for Protein Design Labs. The corporate owners of these platforms have all been acquired for very large sums.
Next Juliana Leung discussed the revolutionary CRISPR/cas9 technology. (The Broad was one of the three or four institutions where the technology was created. Unlike many of the other fundamental biotechnology discoveries, a vigorous contest is underway before the USPTO and in the Courts to determine who will own the core underlying technology.) Juliana described the Broad's licensing approaches and how they are being applied in the case of CRISPR. The Broad seeks to achieve maximum public benefit and has granted 60 non-exclusive CRISPR licenses, but understands that in some cases, particularly human therapeutics, exclusivity may be needed to justify the large investments needed. Its licensing policies also address ethical issues, prohibiting CRISPR's use for human germline editing and, in agriculture, 'gene drives,' 'sterile seeds,' and increasing tobacco consumption. In human therapeutics, The Broad has licensed Editas exclusively but, after two years, other companies may apply to license CRISPR for use against genes of interest not being pursued by Editas. The Broad terms this approach the inclusive innovation model. (See https://www.broadinstitute.org/partnerships/office-strategic-alliances-and-partnering/information-about-licensing-crispr-genome-edi )
Kristin Neuman gave an overview of patent pools and their role in physical sciences licensing and how by allowing "one-stop shopping" for freedom-to-operate, the adoption of new technologies can be accelerated. She identified some of the companies that own CRISPR IP. MPEG LA believes that the CRISPR landscape is particularly well suited to a patent pool and announced such a pool in December 2016. In April 2017 it issued a call for patents. (See http://www.mpegla.com/Lists/MPEG%20LA%20News%20List/Attachments/103/CRISPRPatentCallPrsRls2017-04-25.pdf )
Maury Raycroft gave a comprehensive review of the three primary "pure plays" in the CRISPR space, Intellia, Editas and CRISPR Therapeutics, their academic relationships and commercial partnerships. All three are publicly traded and he showed a timeline of key events in the CRISPR IP space and its impact on the companies' stock prices. Dr. Raycroft's final point was that cross-licensing would likely allow the major, legitimate developers to commercialize the technology without major detriment to one particular company's freedom-to-operate. Jefferies expects such cross-licensing to occur, either at the institutions' instigation or at the direction of the Courts.
Explore more about CRISPR at the LESI Meeting in San Diego. Sadhana Chitale, NYU Technology Transfer Office, will moderate a workshop on Monday, April 30 at 2:45 p.m. entitled CRISPR Patent Pools-A Novel Way Of Licensing And Advancing Research. Other panel members include: Kristin Neuman, MPEG LA; and Jacob Sherkow, New York Law School Broad Institute. Visit: www.LESI2018.org.
|Ashley Stevens leading the CRISPR panel.