As patent battle brews, Celgene and GSK lead $64M raise for CRISPR Therapeutics

CRISPR CEO Rodger Novak

The cascade of venture cash into CRISPR-Cas9 startups is continuing with no end in sight, despite a patent brawl brewing over who owns the technology. Today it's CRISPR Therapeutics' turn at the venture well, drawing $64 million in new VC cash that will fund a company that's based in Basel with deep and growing roots in Cambridge, MA. The new funding brings its total haul to $89 million, with GlaxoSmithKline's ($GSK) SR One and Celgene ($CELG) leading the way.

New investors New Enterprise Associates and Abingworth jumped into the investor syndicate for CRISPR Therapeutics, joining founding investor Versant Ventures.

CEO Rodger Novak tells FierceBiotech that he now has enough cash to fund an R&D runway that extends out for up to two and a half years, enough time to assemble their teams and tackle a range of projects. The biotech is already engaged in a number of partnering talks, he says, with the first one or two likely to land before the end of this year as CRISPR Therapeutics decides where it gains by collaborating and where it benefits the most by keeping a proprietary interest.

The financing comes three weeks after the biotech announced that it had recruited Alexion's ($ALXN) Bill Lundberg to head up its research operation in Cambridge, with plans to recruit up to 50 staffers for the group by the end of next year. The biotech also has a facility in the U.K., but Novak says that the deep talent pool in the Boston/Cambridge area made it clear to the company that the big hub is the best place to focus about 90% of its efforts.

"We will keep a certain footprint in Europe," he says, but "the center of gravity will be Cambridge."

It's no surprise seeing a couple of big outfits like GlaxoSmithKline and Celgene behind this latest round. Big players have been keenly attentive to the potential here. Working with Atlas Venture, Novartis has helped bankroll Intellia, which set out to recruit a 30-person team last fall. Intellia's intellectual parent is Caribou Biosciences, which was founded by UC Berkeley's Jennifer Doudna. Polaris, Third Rock and Flagship, meanwhile, provided a $47 million bankroll to Editas back in late 2013.

Doudna, a structural biologist from UC Berkeley, launched Caribou and was originally credited as a cofounder of Editas before splitting away and later joining Intellia. She worked on gene editing with Emmanuelle Charpentier, who threw her support behind CRISPR Therapeutics while MIT's Feng Zhang signed on with the Editas group. Their work is at an early stage of development, but their story of reengineering genes has swiftly captured the attention of the industry. If the DNA-splicing technology works as the pioneers believe it does, the startups in the field are in the opening stages of making some major breakthroughs. But there has also been visible tension among the founding scientists over who owns the IP involved.

Just two weeks ago UC Berkeley took its challenge to the U.S. Patent & Trademark Office, asking the agency to review the 10 patents it had provided to the Broad Institute at Cambridge, MA, for this technology, which is behind Editas.

According to Novak, both UC Berkeley and the University of Vienna have patent rights to the technology, with the University of California taking the lead. CRISPR Therapeutics founder Charpentier never had to assign her ownership in the technology to the institution where she was working, he adds, and CRISPR Therapeutics is pressing the patent case alongside Doudna's group.

It's no great surprise to see a patent war brewing, though, in an emerging field like this. Juno Therapeutics and a Novartis-backed team at the University of Pennsylvania had a nasty court scrap over CAR-T technology in oncology, but Novartis ($NVS) recently settled that for a modest payment along with a promised royalty stream on approved products. Ultimately, a patent battle might leave all the CRISPR-Cas9 startups intact, with the lawyers huddling to divide any spoils that may eventually arrive. In any case, Novak says the dispute hasn't been a major factor for the pharma and biotech companies that are interested in partnering with them. And the venture players clearly see more upside than downside in staking the pioneers.

"CRISPR-Cas9 is a fundamental breakthrough that enables us to address the root cause of multiple diseases through gene-editing," commented Simeon George of SR One. "We are excited to be part of the very talented team from academia and industry at CRISPR Therapeutics, as they embark on a very compelling mission to transform patient care by bringing CRISPR-Cas9 into the clinic."

 - here's the release

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