CRISPR patent pool unlikely, say therapeutics businesses
Patent counsel from Novartis, Celyad and five other biotech and pharmaceutical firms say that they are open to a commercial CRISPR-Cas9 licensing platform, but that the establishment of a successful pool is improbable because of financial and practical barriers
The emergence of a successful CRISPR-Cas9 patent pool for commercial use is unlikely despite efforts by some in the life sciences sector to establish one, according to in-house counsel.
Seven sources from CRISPR-licensee biotech and pharmaceutical businesses explain that while they might be open to the idea of a commercial licensing platform for the gene-editing technology, there are too many financial and practical barriers for one to be viable.
Counsel say that these hurdles include the limited cost-effectiveness of licensing from a platform rather than through patent owners, an inability to buy exclusive licences and the uncertainty surrounding who would enter such a pool and the ultimate value of CRISPR-Cas9-derived therapeutic products.
“We would support the concept of any collaborative solution that enables innovation in theory, including a CRISPR patent pool,” says Corey Salsberg, vice president and global head of IP affairs at Novartis in Washington DC.
“But the concept would have to make sense in that it would address a problem of developing the technology in a way that is valuable to patients and the business. It would also have to be a voluntary platform.”
He adds that patent pools are usually built to reduce the high transaction costs of licensing from multiple parties. Considering these necessities, he says, it is questionable whether a CRISPR patent pool is needed or would be workable in the pharmaceutical or biotech sectors.
The vice-president of IP at a Californian biotech firm agrees that the concept of a CRISPR patent pool is interesting but that the impracticality of creating and joining one means it is unlikely to emerge, or at least, be successful.
The general counsel of a global life sciences firm adds: “I agree with other companies’ hesitations in this matter. CRISPR-Cas9 is a tricky space that is still partially unknown.”
CRISPR – which stands for clustered regularly interspaced short palindromic repeats – is a bacterial defence system that forms the basis of the gene-editing technology CRISPR-Cas9. Cas9 has garnered increasing attention over the past five years since it was discovered to be a precise, easy-to-use and low-cost way of editing genomes.
A patent pool for the reportedly revolutionary technology has been called for as a way to spur innovation in gene-editing for some time.
The Broad Institute, one of the main CRISPR patent holders, has been proposing a patent pool for the technology since 2017. The organisation has joined discussions to create a non-exclusive joint licensing platform with MPEG LA, a company that puts together patent pools and is famous for putting the mpeg video file model together.
Patent Strategy, a new offering from Managing IP, reported last year that agriculture and human therapeutics companies, including Germany-based seed company KWS, had also been in talks about creating a cross-industry CRISPR licensing platform. Those discussions were stalled, however, after the Court of Justice of the EU ruled that crops modified by CRISPR-Cas9 technologies were to be treated as genetically-modified organisms.
Fewer patents needed
One of the main barriers to a commercial CRISPR patent pool is the uncertainty surrounding which patents will go into it and how much they will collectively cost. Sources point out that it may well be cheaper for medical firms to license rights directly from patent owners.
Patent pools have worked very well for telecommunications and digital appliances firms, for example, because they need to purchase hundreds or thousands of licences from numerous patent holders to make particular devices. Buying these rights from a one-stop shop eliminates the costs and time accrued in finding and negotiating fees with multiple patent owners.
But there are far fewer patents for CRISPR at the moment than there are for smartphones or mp3 players, for example, and therapeutics companies do not necessarily need all of them to develop a Cas9 product.
Salsberg at Novartis says there are around 60 CRISPR-related patents in the US, and that a company may only need to get a licence for a small number of them from one or two owners to develop a particular invention.
“If you are working to develop a therapy you will only be looking at what applications you need and what patents would cover those. If there are only a few needed, it may make more sense to go for a straight licence deal rather than to spend more money on a CRISPR patent package, most of which you may not need.”
The assistant general counsel at a global biotherapeutics company adds that the potential cost of a pool compared to direct licensing deals is a key point of hesitation for his firm.
There is also the matter of who would go into such a pool. Data from iRunway’s 2018 CRISPR Global Patent Landscape report indicates that most human therapeutic-related patents for the gene-editing technology have been tied up by a handful of organisations, including the Broad Institute and the University of California (primarily, UC Berkeley).
If one or two of these organisations decided to opt out of a CRISPR licensing platform, it would not be a one-stop shop and therefore not of much worth to licensees. And there has so far been little indication of who might be willing to throw their rights into the mix.
Hannes Iserentant, the IP director of Belgium-based biotech firm Celyad, points out that while Broad has demonstrated its willingness to put CRISPR rights into a patent pool, it is not certain which other rights holders are on board with the idea.
“UC Berkeley is not on board and it is not clear which other right holders are,” he says. “Thus, it does not seem to be the one-stop solution it hopes to be just yet.”
The Californian biotech VP of IP adds that it is difficult to predict how academic institutions, such as UC Berkeley, might to a CRISPR patent pool’s creation.
The IP director of another California-based biotech firm adds that the current patent wars over CRISPR rights between some of these owners – particularly UC Berkeley and Broad – means that no one is sure who will ultimately end up owning what.
“The ownership question in the CRISPR space complicates things because it is unlikely that these players will enter into a licensing platform arrangement until the question of who is top dog is settled.”
Unlike traditional pools in the tech space, a CRISPR platform would need to attract a diverse landscape of patent owners – and it may be difficult to incentivise them into joining.
The biotherapeutics assistant general counsel points out that in mp3 players, for example, it makes sense for everyone to go into a pool because everyone needs access to all patents in that tech to make a product work.
But in the CRISPR space, you have universities inventing foundational academic-level tech but not developing it, and private companies that are selling types of applications being sold by institutions. It is not clear to most businesses whether there would be an equal incentive for these players to put in their IP, considering this diverse set of roles.
He adds that CRISPR tech is evolving so fast that it is impossible for companies to keep up, and a pool would make it easier to monitor the changing landscape. But if not enough players go into the pool, it can’t be used for that purpose.
Salsberg at Novartis agrees that the diverse set of CRISPR players will make it difficult to have a well-filled pool. He adds that, presumably, there will be a huge number of people who want to license the technology out of the pool but do not want to put anything into it.
He points out that such a situation would go against the rule of most established patent pools that if someone wants to take something out, they need to put something in.
Should a pool be built and filled with patents from the necessary CRISPR-Cas9 rights holders, there would then be the question of whether pharma and biotech businesses could get the return on investment (ROI) required to justify their research and development spend.
Salsberg points out that the cost of developing medicines is usually in the billions of dollars – and even if a company were to license CRISPR tech to help make some aspects of the process more efficient, any cost reduction gained is unlikely to be significant enough to lessen the need for an exclusivity period.
“For that reason, a CRISPR patent pool that limited exclusivity over downstream products would likely not be viable,” he says.
Pharmaceutical and biotech firms normally buy exclusive rights to ensure that they have a monopoly on a given therapeutic product and can get the necessary ROI. But that necessity goes against the point of a patent pool, which requires that rights are licensed on a non-exclusive basis – either because that is the only way they can be workable or because it is required by law.
The only way that businesses would enter a CRISPR patent pool is if they could be reasonably sure that they could get a good ROI without exclusivity. But sources say that they’re not certain of whether they could make a healthy profit through such a system.
“Essentially, patent pools can only be successful for non-exclusive licences – which could work well in the agricultural sector because of its consolidation and you imagine could work for research and industrial biotech as well,” says Iserentant at Celyad. “But I don’t know of any example of a successful patent pool in human therapeutics, because the kind of investment you need to make typically entails that you want at least some exclusivity.”
The associate general counsel of a UK-based pharmaceuticals company says that the problem of the division of royalties from a pool makes the establishment of a CRISPR-Cas9 one-stop shop very difficult. With the patent battles going on, she adds, and the amount of money invested at this point, along with the potential of very large revenue, it is unlikely that the relevant parties will come together.
The Californian biotech VP of IP points out that for a non-exclusive licensing model to work now, there would need to be a rollback of the exclusive licences that have already been granted. The Broad Institute, for example, has licensed a lot of its CRISPR IP on an exclusive basis to Editas – a company that specialises in developing CRISPR-Cas9 technologies – and a patent pool is unlikely to work without these patents.
The bee’s genes?
With all the barriers blocking the path to a successful commercial CRISPR-Cas9 patent pool, businesses are reluctant to put their weight behind one when they are still not certain whether the technology will be as revolutionary as many have touted.
“CRISPR is fairly early in its development and we need a bit more time to see if it is what people think it is,” says the Californian biotech VP of IP. “There are already publications on other CRISPR systems that reportedly function better and do not have some side effects.” She adds that the current assumption is that Cas9 will be fundamental to developments in gene-editing, but it may not turn out to be.
The California-based biotech IP director agrees with this point, and adds that a lot of people in the field are now looking at other enzymes such as Cas12. Businesses may even choose to invest more heavily in these enzymes, he adds, as a way to avoid the current uncertainty in the Cas9 landscape.
Salsberg at Novartis agrees, adding that given the significant effort and transaction costs of setting up a patent pool, a key consideration for any pool would be whether the technology in it would remain essential long enough, or be kept sufficiently up to date, to justify the effort.
“As one of the first CRISPR enzymes to be explored, there is no doubt that Cas9 is of value today, but there are already other approaches that could conceivably compete with or displace Cas9 in the future.”
A CRISPR-Cas9 patent pool could be a good thing for the commercial human therapeutics world, but a successful platform is just not likely to emerge any time soon. Pharma and biotech firms don’t know whether patent owners would be interested in such a pool or – even if they were – whether it would cater to their financial needs.