An epic legal battle over CRISPR-Cas9 genome editing ended last year. But another one, smaller in scope and involving two long-time CRISPR allies, has quietly begun.
Last October, Intellia Therapeutics (NASDAQ: NTLA) began an arbitration proceeding against Caribou Biosciences, alleging in a recent regulatory filing that its longstanding partner had broken the terms of a key license between the two companies.
Caribou, of Berkeley, CA, was founded in 2011 to house the CRISPR-Cas9 intellectual property generated in the University of California, Berkeley, lab of Jennifer Doudna. The researcher and her colleagues helped turn an obscure bacterial defense system into a revolutionary—and easy-to-use—lab tool able to modify the genes of practically any organism on Earth, including the embryos of humans. The revolutionary advance resulted in last fall’s world-shaking claims of the birth of the first gene-edited babies in China, recently confirmed by a government investigation.
Last fall also brought big legal news. A federal court upheld a landmark CRISPR-Cas9 patent ruling in favor of the Broad Institute of MIT and Harvard and against the Berkeley-led camp. During the years-long fight, however, Caribou has been building upon Doudna’s work and licensing it as an R&D toolkit for various uses: human and animal medicine, agriculture, and industrial processes. For human therapeutic use, it chose to license the technology to Intellia, based in Cambridge, MA. When Intellia emerged from stealth in 2014, the companies announced an exclusive license to Caribou’s platform “for the discovery, development, and commercialization of human gene and cell therapies.”
COMPETITORS FOR THE FIRST TIME
It was no run-of-the-mill biotech license deal. Caribou said it had provided a guiding hand in founding Intellia and, accordingly, owned a chunk of the startup. In the second half of 2018, however, that stake shrank from 9.2 percent on June 30 to 5.8 percent at the end of the year, according to regulatory filings.
The divestment roughly coincides with the companies’ relationship going sideways. In a regulatory filing last Oct. 31, Intellia disclosed it had triggered arbitration with Caribou two weeks previously, alleging that Caribou had violated the 2014 license. Three months before that, in a separate filing, Intellia counted Caribou among its gene-editing competitors for the first time.
Officials from both companies have confirmed the arbitration is ongoing.
Less clear, however, is what they’re fighting about. When announced in 2014, the companies’ description of the license centered on human gene and cell therapies. That is narrower than the language used in Intellia’s recent SEC filing: “Caribou granted to the Company a worldwide, exclusive license to all of Caribou’s intellectual property relating to CRISPR/Cas9 technology for all therapeutic, prophylactic and palliative uses and applications for any or all diseases and conditions in humans, with the sole exceptions of anti-microbial and/or anti-fungal applications.”
When asked which description takes precedence, Caribou CEO Rachel Haurwitz replied via e-mail but did not specifically address the discrepancy: “Caribou utilizes a number of different gene editing technologies (various types of CRISPR and non-CRISPR systems). Caribou’s license to Intellia is specific to one CRISPR technology and does not include other gene editing technologies. Intellia has rights from Caribou to the foundational CRISPR-Cas9 IP invented by Jennifer Doudna and her colleagues.”
(Through late 2016, Haurwitz was on Intellia’s board of directors. She informed Intellia of her resignation on November 1 of that year. “Her decision did not result from any disagreement with [Intellia] on any matter relating to [Intellia’s] operations, policies or practices,” according to an Intellia filing. She is now listed as a founder, as is Doudna.)
An Intellia spokeswoman confirmed the arbitration but otherwise declined to comment.
In its filing, Intellia alleges that Caribou is violating the 2014 license “as well as other contractual and legal rights, by using and seeking to license to third parties two patent families relating to specific structural or chemical modifications of guide RNAs, that were purportedly invented or controlled by Caribou, in our exclusive human therapeutic field.”
That’s a lot to unpack. It’s not immediately clear which patents or modifications Intellia is referring to, or with which third parties Caribou has been doing business and allegedly breaking the Intellia license.
In the world of CRISPR-Cas9 genome editing, two main components are synthesized in a lab, packaged together, and sent into cells. The “guide RNAs” are the short strands of biological code that match up with the right strand of target DNA. When a guide RNA finds its match, the accompanying Cas9 enzyme cuts that strand of DNA. In human therapeutics, still in the early experimental phase, this cut might either disable a disease-causing gene or create space for a healthy replacement.
In its regulatory filing, Intellia noted Caribou’s response to its claims: “Caribou has asserted that the two families of intellectual property are outside the scope of our license.”
The companies are supposed to resolve disputes on their own “in good faith,” according to their original license contract. Only when that fails does arbitration become an option. The process is confidential, unlike a lawsuit. Neither side would say how long the arbitration might last.
The dispute is surfacing during a major change for Caribou, from a “platform” company—one content to help other companies develop medicines and other products—to a product company itself. It’s a transition that legions of biotech firms have tried to make, aiming for a riskier but far more lucrative business.
Last week, speaking at the University of California, San Francisco, company founder Doudna put a timeline on Caribou’s ambitions: It aims to file an IND—that is, ask the FDA for permission to start testing an experimental medicine in humans—within 18 months. Haurwitz confirmed to Xconomy that Caribou’s first program is a so-called off-the-shelf CAR-T cell therapy, produced from the blood of healthy donors, that targets blood-borne cancers. For its therapeutic work, Caribou is using “a number of different gene editing technologies” that are not licensed to Intellia, Haurwitz said.
Doudna is one of Caribou’s two scientific advisors; the other is Martin Jinek, a former member of Doudna’s lab and co-author of the seminal 2012 paper, with Doudna and French microbiologist Emmanuelle Charpentier, that describes the work they did to turn CRISPR-Cas9 into a gene-editing tool.
Off-the-shelf, or allogeneic, CAR-T refers to cell-based therapies that use blood-based T cells from healthy donors. Genetic alterations turn the T cells into revved-up cancer killers that, when given to a cancer patient, attack the patient’s tumor but don’t trigger a dangerous immune rejection. That’s the goal, at least. Two CAR-T medicines derived from a patient’s own cells have been approved in the U.S., but the first off-the-shelf CAR-Ts have only begun human testing recently. Caribou will face much larger competitors, in particular the well-funded Allogene (NASDAQ: ALLO).
For years, Caribou has signaled its intent to develop its own cell therapies, hiring biopharma veterans for its executive ranks. Announcing the 2017 arrival of current chief scientific officer Steven Kanner—previously of Bristol-Myers Squibb, Arrowhead Pharmaceuticals, and other firms—a press release included this quote from Haurwitz: “He will also be an important leader in generating opportunities for our rapidly emerging pipeline of off-the-shelf CAR-T candidates and microbiome-based therapies.”
Beyond what UC Berkeley transferred from Doudna’s lab, Caribou has amassed its own patent portfolio, both from its internal work and from other industrial and academic entities such as Dupont.
Caribou now has 55 employees and has raised more than $40 million in private investment. Despite the unprecedented IPO biotech boom in the past five years, the firm has stayed private.
Asked about that last week, Doudna said, “Maybe it would’ve been better to be bigger and go public.”
Then again, the Intellia stake has given Caribou resources it wouldn’t otherwise have, Doudna said. The firm’s evolution has required a team that’s “good at cell-based therapy, or any clinical application,” that can put together labs for animal studies, and think about manufacturing and pricing—skills required for a biotech pushing its own products into clinical trials and eventually toward the market. Without public shareholder pressure, that team has also been free to pursue more cutting-edge projects, such as editing microbial DNA. “They can take that risk,” she said.