White Paper - From Academia to Commercialization

From Academia to Commercialization

Tracking CRISPR’s success through IP analysis

2016

Table of Contents

Striking gold when research goes commercial 3

Signs of a rising technology 5

The role of funding 7

Opportunities for partnership 10

Future investment 12

Conclusion 14

Science going mainstream It’s been just three years since the discovery of a new gene-editing technique, that has since come to be known as CRISPR. The technology is ground-breaking, as a recent article in Wired explains: “CRISPR could at last allow genetics researchers to conjure everything anyone has ever worried they would—designer babies, invasive mutants, species-specific bioweapons, and a dozen other apocalyptic sci-fi tropes.”1

Formally called Crispr-Cas9, this genetic editing technique “acts like a pair of low-cost and highly precise molecular scissors that can cut out unwanted sections of DNA and insert desired ones.”2 Because of this, it is a highly contested technology and one that has caused intense debate, even bringing the infamous Bayh-Doyle Act under much closer scrutiny. The Bayh-Doyle Act of 1980 has been described as one of the most successful pieces of US legislation in recent times and its impact is believed to have put America at the forefront of biotech innovation.3 It was this act that gave scientists, universities and small businesses the right to patent any discoveries made as a result of federally funded research, and profit from those discoveries. It was this act that led to the growth of Technology Transfer Offices (TTOs), responsible for overseeing the transfer of scientific knowledge from universities into the commercial sector.

© 2016 All Rights Reserved 3

1 http://www.wired.com/2015/07/crispr-dna-editing-2/ 2 Definition quoted in http://www.bloomberg.com/news/articles/2016-02-23/china-bets-big-on-gene-editing-technology-in-race-against-u-s 3 Craig Shimasaki , Biotechnology Entrepreneurship: Starting, Managing, and Leading Biotech Companies, 2014, p. 25.

Striking gold when research goes commercial

“CRISPR could at last allow

genetics researchers to

conjure everything anyone

has ever worried they

would—designer babies,

invasive mutants, species-

specific bioweapons, and a

dozen other apocalyptic

sci-fi tropes.”

Tension between institutions

However, CRISPR technology has led to a bitter patent war, pitting leading research institutions against one another - in this instance the Broad Institute against the University of California and other co-petitioners.

As Professor of Law, Jacob S. Sherkow observes, the fact that research institutions are being pulled into such activity, “demonstrates how overzealous efforts to commercialize technology can damage science.”4

Widening the horizon of discovery

It is perhaps no surprise that a discovery of the magnitude of CRISPR has led to such circumstances. CRISPR technology could be worth millions, potentially billions of dollars. A recent Washington Post writer suggested, “that the impact of CRISPR will be much larger than anticipated. It will widen the overall horizon of discovery, leading to advances we can't even imagine.”5

It’s the equivalent of striking gold in genetics, which explains the intellectual property landscape that’s emerging. We’ll explore the landscape in this white paper – in particular the rise of start-up organizations looking to profit from the transfer of technology from academia into the commercial environment.


4 http://www.nature.com/news/crispr-pursuit-of-profit-poisons-collaboration-1.19717 5 https://www.davidson.edu/news/news-stories/160318-designer-babies-and-education

Striking gold when research goes commercial

“...the impact of CRISPR

will be much larger than

anticipated. It will widen

the overall horizon of

discovery, leading to

advances we can't even

imagine..”

The science behind gene-editing techniques

Until recently, TALENs and Zinc Fingers were at the forefront of the gene-editing scene. Both of these techniques use engineered, non-specific nucleases that fuse to sequence-specific DNA binding domains, providing ‘target specificity,’ and enabling the introduction of double stranded DNA breaks. Zinc Fingers typically recognize DNA triplets, whereas TALENs recognize single nucleotides.

Unlike TALENs and Zinc fingers, the CRISPR system, on the other hand, is RNA-based and derived from a bacterial defence mechanism, which is designed to combat invading foreign DNA. As CRISPR does not rely on DNA or protein recognition, but rather RNA complex formation, it is cheap and quick to design.

The advantages of CRISPR

Compared with the earlier genome editing method, TALENs, the CRISPR method enables researchers to edit genes 200-times less expensively. TALENs costs about $4,000 per gene and takes months longer to perform than using CRISPR.6 The method is also efficient, as multiple mutations can be introduced directly, without the lengthy process of transfecting cells and selecting for recombination. It is these advantages that have catapulted CRISPR rapidly onto the scene, which can be seen on the chart below.


Signs of a rising technology

6 https://www.nibr.com/stories/nerd-blog/crispr-genome-editing-fuels-cancer-drug-discovery

19%

49%

32%

0%

20%

40%

60%

80%

100%

CRISPR Zinc Fingers TALENs

Source: PatSnap Insights

The CRISPR method ramps up share of innovation quickly in 2015


Signs of a rising technology

Corporates overtake academia

In the chart (left) we can see that the patenting activity of corporate players has overtaken that of academic bodies, with the initial trend indicating we will see an even wider gap in 2016.

It’s another promising sign for the CRISPR space. The rise of activity from some of the big players illustrates an extremely strong commercial interest, with corporates patenting at a rate that is 20% higher than academic bodies this year.

Commercialization drives technology forward

The previous chart shows how CRISPR managed to gained an additional 13% share of innovation activity in 2015 compared to 2014. Such an increase was rivalled historically only by the patenting activity of Zinc Fingers between 2000 and 2001, when it gained 21 percentage points at the expense of TALENs.

At the time of the millennium, there was huge anticipation over the human genome sequence and Sangamo BioSciences took its stock public, an event which further enabled genome editing to really hit its stride.

Patent activity, corporates vs academic institutions


0

50

100

150

200

250

300

350

400

450

500

2011 2012 2013 2014 2015 1H 2016

Academic Corporate

IP landscape answers key investment questions

It is difficult to secure funding without at least one patent in a core technology area,7 so if a research project or discovery makes sense from a commercial perspective, then it’s important to establish the right IP strategy to propel the technology forward.

The availability of funding - and the history of investment in a specific technology - plays a crucial role for assessing earlier stage development decisions, such as whether to license or sell the technology, create a spin-off or establish a start-up organization. The research organization is focused on one major question when deciding the appropriate route to take, which is how it can best ensure global access to its technologies and innovations.8

There are three main commercialization options. In the spin-off scenario, the university keeps most control, as it owns, manages and finances the technology. If a start-up is founded, the IP is licensed and control and funding comes from outside the university. Alternatively, the IP can be licensed to an established company.

IP analysis will help early investors from outside the research institution to answer some of their most pressing questions:


The role of funding

7 http://tto.ntnu.no/patent-filing-strategy-at-ntnu-technology-transfer-as 8 http://www.iphandbook.org/handbook/ch09/p01/eo/#tech

Meanwhile, for TTOs, knowing the type of arrangements and conditions that are most favourable for various external organizations will help them to be proactive in their search for finding the right partners for specific technologies.

What technologies are academic institutions researching and where does their expertise lie?

Is there clear evidence of funding taking place in the technology space?

Where is investment coming from?

What type of partnerships are arising? Are they public-public/public-private partnerships?

Will the technology be licensed? In what areas is there licensing activity?

How does the new technology benchmark in terms of value compared to existing technologies?


The role of funding

9 http://www.editasmedicine.com/about.php 10 http://www.intelliatx.com/about-us/overview/ 11 http://www.fiercebiotech.com/r-d/novartis-joins-atlas-launching-a-crispr-cas-biotech-a-15m-bankroll 12 http://cariboubio.com/about-us 13 http://www.businesswire.com/news/home/20150402005136/en/Caribou-Biosciences-Raises-11-Million-Series-Funding 14 http://crisprtx.com/news-events/news-events-press-releases-2016-06-24.php 15 http://www.scientificamerican.com/article/money-from-genes-crispr-goes-commercial/

Investment in CRISPR ramping up quickly

Possibilities of widespread applications for CRISPR means that players from a huge cross section of industries are set to benefit if they invest in the right technologies at the right times. Numerous investments in start-up firms have already taken place.

Editas Medicine, for example, was founded in 2013 with $43 million in Series A venture capital financing. Investment was led by leading health care venture capital firms.9 Editas describes its mission as ‘translating genome editing technology into a novel class of human therapeutics that enable precise and corrective molecular modification to treat the underlying cause of a broad range of diseases at the genetic level.’

Following on, in 2014, pharmaceutical heavyweight Novartis partnered with Atlas Venture to form Intellia, backed initially by $15 million of Series A funding. Intellia’s objective is to develop potentially curative gene editing treatments that could transform the lives of people that have severe or life-threatening diseases.10 It has in-licensed technology from Caribou BioSciences.11

Caribou BioSciences dedicates itself to advancing new applications for CRISPR-Cas technology across four key areas. These range from human therapeutics through to agricultural biotechnology.12 It announced in April 2015 that it had received $11 million, following a Series A financing round.13

Meanwhile, CRISPR Therapeutics, who focus on human therapeutics, announced in June 2016 that it had secured an additional $38 million of Series B financing. This additional investment brings the total Series B financing round to nearly $140 million.14

And AstraZeneca responded to Novartis’ entry into the market space by investing in a number of CRISPR companies and institutions, including the Wellcome Trust Sanger Institute, the Innovative Genomics Initiative, the Broad and Whitehead Institutes in Massachusetts and Thermo Fisher Scientific.15


The role of funding


Tracking funded technologies

By creating a landscape representing the IP of the companies and institutions that have received investment, it is also possible to build a picture of the hottest technologies within the space.

From the landscape below, for example, we can see that ‘therapeutic application’ is one of the key patenting activity areas, with a number of research institutes (in yellow) and Editas Medicine (in red) in particular appearing in that space, while other key projects are also revealed.

Using landscaping to discover partnerships


Opportunities for partnership

What we find in the CRISPR technology space is somewhat unusual, as there are currently very clear borderlines between many of the key players’ portfolios. It means that, despite the fact that we are in the early stages of CRISPR innovation, we can see that organisations, from large corporates to universities, have already defined a clear, initial IP strategy. Awareness of adjacent technologies will be fundamental to how innovation evolves as the space becomes more crowded.

From a partnership perspective, if we take Novartis as an example, and explore their core space, we would find that there are numerous academic bodies that are developing similar technologies within the same area. Using patent landscapes to zoom into specific areas will help organizations to quickly identify growth opportunities and track new technologies or research - as theoretically all these technologies could complement a portfolio in gene therapy.

As CRISPR innovation continues to hasten, we will begin to see the landscape becoming saturated with both new and old players who are keen to establish a foothold and build a revenue driving portfolio. It is valuable for both start-ups and large corporations to understand exactly where their technology sits in relation to other players in the space.


Universities in same technology space as Novartis - University of Texas -University of Minnesota - University of New Jersey - University of Pennsylvania - Whitehead Institute

The process in reverse

Meanwhile, from the perspective of a university or research institution, being aware of and understanding the IP strategy of larger players can give research teams a distinct advantage. It enables them to be proactive in scouting for funding, open innovation and licensing, in turn accelerating the product lifecycle, whilst building the foundations of a steadfast technology.

Taking this one step further, and looking beyond merely the volume of patents, being able also to gauge the value of specific technologies will give an indication as to the potential return on investment offered by different research topics within the CRISPR space.

Many different aspects of the IP landscape will play a role in assessing an institute’s company fit and, when considering collaboration, understanding these influencing factors will ensure the best partners can be found. Points to consider include:

- Historical patenting activity to establish a partner’s position in the market - Extent of collaboration experience, to minimize difficulties - A private organization’s readiness or ability to make the technology accessible


Opportunities for partnership

Where next for CRISPR?

With CRISPR patents hitting their stride in the market three years ago, it’s incredible to see who has been investing not just in research, but specifically in open innovation and acquisitions.

Overall patenting activity reveals that the US has been most prominent in leading CRISPR innovation, in terms of patent value. However, over the past few years, China has been chasing their lead, ramping up the volume, and acquiring 49% more patents than the US.


Future investment

It’s interesting to note that the total value of the patents are significantly lower in China than the procurements made by the US, European jurisdictions and Canada. This is likely due to two main reasons; either the patents have only recently been published and so the value is yet to be realized, or China is investing in lower value patents to spread their risk across the portfolio.

$18,615,000

$26,628,000

$19,974,000

$18,615,000

HIGH

LOW

174

0

Volume of patents

Global patent activity, volume and value



Future investment

Regional level analysis

If we take a deeper dive into the content of the IP, we can see that China is predominantly investing in recombinant DNA-technology, using vector or expression systems specifically adapted for animal cells.

In contrast, the US is investing in recombinant DNA-technology that enables stable introduction of foreign DNA into chromosomes.

These findings are in line with China’s drive towards genetically modified human embryos and customized animals,16 compared to the US which currently has the edge in biotechnology, such as genetically modified wheat.

Europe has continued to refine technology surrounding the process of isolating, preparing and purifying DNA or RNA.

As a corporation looking to invest in the CRISPR space, you will want to understand what research spaces other organizations in your jurisdiction are investing in, as this will give you a good idea of where there is interest - and funding - specific to your geographic location. By then taking a further look at the different layers of context you can identify academic bodies or start-ups that are open to licensing and patent transfers.

16 http://www.scientificamerican.com/article/china-s-bold-push-into-genetically-customized-animals/


Conclusion

Steps for effective use of IP Analysis in commercialization of research Five steps that can be considered within an IP analysis approach to evaluating commercialization opportunities include:

1. Using IP data to identify rapidly rising technologies and technology cycles

2. Evaluating indicators, such as level of academic versus commercial activity, to

determine a technology’s readiness for commercialization

3. Take into account current and previous investments in companies that are licensing or

pursuing a technology and plot their expertise within the overall landscape

4. Examine the type of partnerships that have evolved between organizations and

institutions and where they fit into the competitive landscape to determine overlap or

opportunities

5. Review global trends to inform future IP strategy and best next steps

About PatSnap PatSnap is the leading provider of Intellectual Property Analytics, for analysing tech trends, driving innovation, market planning, competitor intelligence and maximising return on IP assets. Founded in 2007, PatSnap is used by of R&D, business and IP professionals in thousands of commercial and not-for-profit organisations globally, including NASA, the Department of Defense, China Mobile, Goodyear and Vodafone. With a database of over 113 million patents, augmented by economic, legal and company data, we use proprietary machine learning technology to make IP work for all, including those with no IP experience. We have offices in London, Singapore and China. Find out more: www.patsnap.com

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White Paper - From Academia to Commercialization

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