Catalyst Trades: CRISPR/Cas9 Genome Editing Patent

We have been following biotech technology since the early 2020s. One of the most significant technologies are the break through CRISPR gene-editing process. Several companies we follow are impacted by patent rulings on the technology. Here is an update that could lead to big moves for certain companies we follow.

The legal hurtles

The Patent Trial and Appeal Board (PTAB) has ruled in favor of the Broad Institute in a patent “interference” trial over the foundational patents covering CRISPR-Cas9, a revolutionary gene-editing technology. The ruling means the Broad Institute’s patents are separately patentable inventions, regardless of how one interprets the still-pending patent application from the University of California, Berkeley.

This decision will likely affect the market for patent licenses for CRISPR technology, especially those from for-profit biotech companies with exclusive licenses to the universities’ CRISPR technology, such as Editas Medicine, Caribou Biosciences, Intellia Therapeutics, and CRISPR Therapeutics. The PTAB’s decision seems to have valued a broad, exclusive license to CRISPR-Cas9 at around $100 million to $265 million, based on stock fluctuations of these companies. The cost to commercial development, such as paying upfront payments to get the commercial iterations of the technology off the ground, could be but a dream for many smaller biotech companies, especially where their competitors are the surrogate companies themselves.

Source: Broad Institute

The Patent Resolutions

The recent grant of a US Patent by the US Patent and Trademark Office (USPTO) to CRISPR Therapeutics (NASDAQ), Intellia Therapeutics, Inc. (NASDAQ:NTLA), and Caribou Biosciences Inc. (NASDAQ: CRBU) for CRISPR/Cas9 genome editing technology is a significant milestone in the field. The patent specifically covers the use of optimized guide RNA molecules in eukaryotic cells, including humans, animals, and plants. This patent estate has received approvals in Europe, the UK, China, Japan, and several other countries, covering dual- and single-guide RNA compositions and their applications in human therapeutics. While the three companies have different approaches to using CRISPR-Cas9, they have emerged as leaders anticipating the issuance of a US patent for the foundational CRISPR/Cas9 intellectual property by The Regents of the University of California. In short, these are the first US patents granted among hundreds of pending applications, leading to additional revenue streams in the hundreds of millions of dollars for each of these companies.

You can find the Press Release here

What are the revenue benefits?

The Broad’s patent valuation appears to correspond with the stock fluctuations of Intellia and CRISPR Therapeutics. For instance, Intellia’s stock dropped 19% to $11 a share, causing a $90 million loss to investors following the PTAB’s decision. However, the stock regained stability at $13.50, indicating investors believe the company’s position is no worse off than before. Similarly, CRISPR Therapeutics initially dropped to $12.50 a share, resulting in a $195 million loss, but regained ground at $18 a share on quickly back in 2017. These fluctuations suggest that the value of the patents falls between $100 million and $265 million, respectively.

Source: Forbes

Breaking Out Key Differences For The Companies

CRISPR Therapeutics Fundamental Perspective

Dr. Emmanuelle Charpentier, a scientific founder of the company, played a key role in co-inventing CRISPR/Cas9 gene editing. Previously, the term “CRISPR” only referred to a type of genetic information used by certain bacterial species as part of their antiviral defense mechanism. However, now CRISPR/Cas9 has emerged as a groundbreaking gene-editing technology that has the potential to bring about significant medical breakthroughs in the field of biomedical research.

CRISPR/Cas9 works by precisely cutting DNA and utilizing the body’s natural DNA repair processes to make modifications. The system comprises of two components: the Cas9 enzyme and a guide RNA.

“CRISPR” has just recently taken the lead from its competitors with the FDA Filing on Sickle Cell Gene Therapy. By rapidly translating a revolutionary technology into a transformative therapies “CRISPR” has a clear path leading in the space.

CRISPR Lexicon Technically

  • CRISPR: Clustered Regularly Interspaced Short Palindromic Repeats of genetic information that some bacterial species use as part of an antiviral system. A group of scientists, including our co-founder Dr. Emmanuelle Charpentier, discovered how to use this system as a gene-editing tool (Jinek, et al. Science 2012)
  • Cas9: a CRISPR-associated (Cas) endonuclease, or enzyme, that acts as “molecular scissors” to cut DNA at a location specified by a guide RNA
  • Deoxyribonucleic acid (DNA): the molecule that most organisms use to store genetic information, which contains the “instructions for life”
  • Ribonucleic acid (RNA): a molecule related to DNA that living things use for a number of purposes, including transporting and reading the DNA “instructions”
  • Guide RNA (gRNA): a type of RNA molecule that binds to Cas9 and specifies, based on the sequence of the gRNA, the location at which Cas9 will cut DNA

Three main categories of genetic edits can be performed with CRISPR/Cas9:

CRISPR Therapeutics Pipeline

Source: CRSPR

CRISPR Technical Perspective

CRISPR Therapeutics AG (CRSP) In my view CRISPR Therapeutics has a distinct advantage not only Fundamentally because of its early success, but also Technically. Frist, its experienced a shallower impulse wave to new all time highs and we have clearly tested the low and built out a solid base. While we have solid three drive to a bottom pattern with an extended shelf. i.e., its now extended beyond the first leg an is closer to a 3rd standard deviation. Typically, a solid bottom.

Intellia Therapeutics Fundamental Perspective

What I find different about Intellia is what appears to be a drive and desire to help those living with genetic, oncological, or immunological diseases, which not only affect the patients but also their families and caregivers. Clearly, Intellia is not as far along as CRISPR Therapeutics while its also easy to see them as a leader in this space, using CRISPR-based genome editing technologies for human therapeutic use, with the goal of developing potentially curative therapeutics. Intellia is employing a modular genome editing platform to create diverse in vivo and ex vivo therapeutics, covering various disease indications. With a commitment to making CRISPR-based medicines a reality for patients suffering from genetic diseases and creating novel engineered cell therapies for various cancers and autoimmune diseases, Intellia is dedicated to making a significant contribution to the field of biotechnology.

Intellia Types of Edits

They focus on Genetically driven diseases, caused by mutations (a change in the DNA sequence), come in many different forms. Intellia is applying and optimizing its CRISPR genome editingAlso called gene editing. Genome editing collectively refers to a set of technologies, including CRISPR/Cas9, that can be used to cut and modify DNA. Genome editing uses systems to make the DNA change inside the cell. These cells can be edited in the body (in vivo) or outside the body (ex vivo) from a patient or donor. platform to address each of these types of mutations.

In vivo: CRISPR is the therapy

There systemic lipid nanoparticle. Also known as LNP. LNPs are fat-based molecules that are the basis of Intellia’s CRISPR/Cas9 delivery platform. In Intellia’s experimental treatments, an LNP delivers to its target gene a simple, two-part genome editing system: the messenger RNA that encodes the Cas9 protein and the guide RNA that can target a specific DNA sequence. (LNP)-based delivery system has unlocked treatment of genetic diseases to both selectively knock out disease-causing genes and restore necessary genetic functions by targeted insertionInsertion of a new DNA sequence into the genome to manufacture a desired protein using a gene editing technology, such as the CRISPR/Cas9 system..

Pipeline

Source: Intellia

Intellia Therapeutics Technical Perspective

Intellia Therapeutics, Inc. (NASDAQ:NTLA) The Technical perspective is a bit more inform from an Elliott Wave perspective while it may not be as complete as CRSPR Therapeutics in the size of there pipeline, there no slouch either. In fact, one big success gives them an advantage to the upside from a risk reward perspective. A solid 2nd drive with more of double bottom in RSI. That usually doe’s not invalidate the confirmed low as long as the first flush has a distinctive lower high vs. the 2nd drive.

Caribou Biosciences Fundamental Perspective

Caribou Biosciences is focused on developing genome-edited allogeneic cell therapies, such as CAR-T and CAR-NK cells, to treat hematologic malignancies and solid tumors. These investigational therapies have not yet been approved by regulatory authorities. The company does not currently offer expanded access to its investigational therapies outside of clinical trials. Caribou believes that conducting rigorous clinical trials is the best way to develop therapies that may provide benefits for the largest number of patients, and participation in one of their clinical trials is the preferred route for patients and physicians to access these investigational products. Those interested in learning more about Caribou’s ongoing clinical trials can visit their website or clinicaltrials.gov.

Caribou Technology

Caribou Biosciences Pipeline

Source: Caribou

Caribou Biosciences Technical Perspective

Caribou Biosciences Inc. (NASDAQ: CRBU) Clearly, Caribou is a stock that has about 10 years more history than “Intellia” or “CRISPR” who respectively started 2016 and 2017. The Technical are skinny in comparison vs. CRISPR followed Intellia with clear downtrend outside of the opening impulse wave. It has an elongated Wave A in a corrective ABC pattern which is indicative of a deeper Wave C. However, there is no reason this stock could not turn around on pipeline success. Technically, there is no reason Wave C could not become the shortest Wave and find another bottom soon. Of course, I always prefer confirmed divergence and as we all know in developing stories that is not always the case.

Final Thoughts

The PTAB ruling in favor of the Broad Institute has significant implications for the market for patent licenses for CRISPR technology, particularly for companies with exclusive licenses to universities’ CRISPR technology, including Caribou Biosciences, Intellia Therapeutics, and CRISPR Therapeutics. Meanwhile, the recent US Patent grant for CRISPR/Cas9 genome editing technology to CRISPR Therapeutics, Intellia Therapeutics, and Caribou Biosciences is a significant milestone, with each of these companies approaching CRISPR-Cas9 differently. Caribou Biosciences is focused on developing genome-edited allogeneic cell therapies, while Intellia is using a modular genome editing platform to create diverse in vivo and ex vivo therapeutics, covering various disease indications. CRISPR Therapeutics has a distinct advantage both fundamentally and technically, with a shallower impulse wave to new all-time highs and a solid base. Clearly, this is still an emerging technology in its infancy and were excited about its future not only for mankind but also for the coming bull market in stock valuations.

Risk Disclosures

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