The idea of modifying genes is heralded by some as holding the potential for new therapies addressing rare, genetic diseases, or producing agricultural products with certain desirable characteristics. Precision BioSciences believes that its technology can beat out other emerging gene-editing technologies and it has closed on $25.6 million to prove it.
The Durham, NC, company’s oversubscribed Series A round was led by venBio, joined by Fidelity Biosciences, Amgen Ventures, Baxter Ventures, Osage University Partners, and The Longevity Fund. Precision Bio says the round also included two undisclosed “well-known public market investors.”
With the new financing, Precision Bio, which has so far used its technology to advance the research efforts of its biotechnology partners, is now aiming to use its gene-editing technology to develop its own products, CEO Matthew Kane says.
Kane says the company’s technology, called Arcus, offers advantages over two other gene-editing technologies that have not yet entered clinical trials but are attracting research and investor interest: TALEN and CRISPR/Cas9. TALEN stands for Transcription Activator-Like Nucleases. It’s an older technology and French company Cellectis last December signed a deal licensing its TALEN technology to Pfizer (NYSE: PFE) to develop new cancer immunotherapies.
CRISPR is shorthand for Clustered, Regularly Interspaced Palindromic Repeats. The technology uses the Cas9 protein to make precise cuts in the genome, which then allows researchers to cut out or replace genes. Editas Medicine, based in Cambridge, MA, is using a CRISPR-based gene-editing technology to develop new therapies. In January, Novartis (NYSE: NVS) inked an exclusive license for CRISPR/Cas9 gene-editing technology from Intellia Therapeutics, also based in Cambridge.
Kane says that the way Arcus targets genes offers more precision and flexibility compared with CRISPR and TALEN. Arcus roughly translates from Latin for bow and arrow. Flexible (bow), and specific (arrow) is what the company was trying to capture in naming its technology, Kane explains.
He adds that the company’s technology is protected by its own patented R&D, unlike other genome-editing technologies based on intellectual property from third parties. The CRISPR technology is currently embroiled in a patent fight over who invented it. The CRISPR technology, which employs bacteria’s defense mechanism against viruses, is based on modifications made that turn that mechanism into a gene modification tool. While The Broad Institute and MIT were awarded a CRISPR patent for work led by the Broad’s Feng Zhang, University of California, Berkeley, biochemist Jennifer Doudna, is fighting that award claiming her team was the first to invent CRISPR.
Precision Bio has been tangled in its own patent battles, which Kane concedes was a limiting factor in the company’s ability to raise money early on. The company was founded in 2006 based on technology licensed from Duke University. The company developed a gene-editing technology that can modify genes in the cells of mammals or plant cells. This Directed Nuclease Editor technology (DNE) makes precise modifications of a gene without making changes that affect other parts of the genome.
For much of the last five years, Cellectis fought Precision Bio over its DNE patents. Most of that litigation is now settled. But even during the court battles, Precision Bio worked on the gene-editing technology that became Arcus. Kane says that the company is raising money now because the technology is showing promise not just for research, but also for high-value products that are not yet addressed by drug and agbio companies.
“A nine-year path to a Series A—a little different path than others, but it made sense for us,” he says.
Arcus incorporates some of the technology used for its DNE platform, but Kane says it is a separate technology that has additional intellectual property built around it. Compared to DNE, as well as CRISPR and TALEN, Arcus is more precise in the way it can hit a gene target, he explains. The current scientific literature, he says, suggests that while CRISPR and TALEN can target the genes researchers intend to hit, those technologies can also affect other genes. That outcome would be undesirable in applications where specificity is important, such as therapies for genetic diseases.
Precision Bio’s business model so far has been to team up with other companies to develop the therapeutic or agricultural products of its partner. Disclosed partners include Medford, MA-based agbio startup Agrivida, which is using Precision Bio’s DNE technology to improve dairy and beef nutrition. In April, Precision Bio disclosed that Syngenta (NYSE: SYT) used the Arcus technology to insert “genes of interest” into particular locations of the corn genome. But the companies did not say what kinds of agricultural traits or characteristics they were pursuing with Precision Bio’s gene-editing technology.
Besides uses in therapeutics and agriculture, the company says the technology could have applications in energy, as well as industrial materials. For now, Kane is staying tight-lipped on product opportunities the company is pursuing with Arcus. But he says the funding allows the company to move beyond quietly developing the technology platform, and now pursue development of a product.