Editas Medicine has committed up to $125 million in research funding to the Broad Institute. The deal gives Editas first refusal on genome editing inventions developed in the sponsored research.
CRISPR startup Editas is yet to flesh out what it could get in return for the cash, stating only that the funding will support “research useful or relevant to genome editing in the field of genomic medicines for the prevention or treatment of human disease.” The fruits of the research could complement Editas’ core CRISPR technology, which is also licensed from Broad.
Editas has been more forthcoming about financial aspects of the relationship. The first two research payments to Broad are worth $12.5 million in total and are already due. Editas is obligated to pay up to 10 times that amount in research funding over the duration of the agreement.
Some of the potential flow of cash from Editas to Broad is tied to the success of the company. If Editas’ market cap passes thresholds “ranging from a mid nine-digit dollar amount to a low eleven-digit dollar amount,” Editas will makes payments to Broad in cash or interest-bearing notes. Editas currently has a market cap of $1.8 billion, a low 10-digit number.
The deal features similar provisions that apply in the event Editas is acquired. The thresholds span the same range as the market cap aspect of the deal. If Editas is bought for more than one of these amounts, Broad will receive a cash payment.
Putting the agreement together gives Editas access to a source of genome editing innovations. Editas secured a prominent place in the genome editing niche of the biotech industry by securing rights to CRISPR technology from Broad in 2014, before going on to pick up IP related to Cpf1 compositions. But the emerging nature of the field and number of other biotechs looking at it means Editas must continue to keep tabs on inventions from research groups such as Broad.