Editas Medicine Inc. (EDIT) continues its bull run following a recent verdict by the U.S. Patent and Trademark Office (USPTO) regarding the long-running patent battle over the CRISPR-Cas9 gene editing technology. (See also, CRISPR Patent Lawsuit Heads to Court.)

The matter relates to CRISPR-Cas9 system, which is a combination of protein and ribonucleic acid, capable of modifying faulty genes in disease-affected cells and substituting them with healthy replacements. By 2020, the CRISPR gene-editing technology market is expected to grow to $5.5 billion. (For more, see The Gene-Editing Revolution: What Is CRISPR-Cas9?)

UC Berkeley Suffers Setback Against MIT and Harvard

The two parties involved in the patent dispute are University of California at Berkeley and the Broad Institute of MIT and Harvard. Both parties lay a claim on CRISPR-Cas9 systems and the methods of using them. The USPTO believed that none of their claims are identical.

In its verdict, the U.S. Patent and Trademark Office concluded that the inventions claimed by the University of California and the Broad Institute are different. It found that the patents held by Broad Institute relate to the use of CRISPR-Cas9 technology in the human cells and other eukaryotes, which is an organism having a complex cell or cells.

The UC Berkeley patents cover use of the gene-editing approach in a more general form, which is different from Broad’s usage. Due to the distinction, it ruled that Broad Institute’s usage is separately patentable from UC Berkeley’s patents.

While UC Berkeley presented arguments that the use in eukaryotes was a natural extension of its work, the patent board disagreed and sided with the Broad Institute.

Market Reaction and the Way Forward

While UC Berkeley may appeal further, the associated company stocks are showing wide swings. Following the verdict, the shares price of Editas Medicine, which has licenses to the Broad’s patents, increased to hit high of $26.98 per share on Thursday, building upon its earlier run of around 30% on the previous day. On the other hand, share price of CRISPR Therapeutics AG (CRSP) and Intellia Therapeutics Inc. (NTLA), which have based their work on UC Berkeley’s findings, tanked instantly by around 30% and 20% respectively, on Wednesday afternoon.

Market analysts believe that the patent dispute will conclude in the most common way observed in the past cases – both parties can agree on a licensing agreement. “We see cross-licensing likely to be the eventual path taken by both parties,” FierceBiotech quotes Jefferies analyst Gena Wang, who expects mid-single-digit royalties.

While CRISPR and Intellia could benefit by licensing CRISPR for use in eukaryotes from Editas, and in return Editas could get to use single-guide and tracrRNA from the UC Berkeley. (See also, CRISPR IPO Raises $56 Million, Below Target.)

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